The number of graduate jobs dropped by 12% in 2020 with the majority of employers anticipating further decline next year, reports Institute of Student Employers (ISE).
ISE Student Recruitment Survey 2020 reports that this is the largest fall in graduate recruitment since 2008/9 when the market contracted by 25%1. While patterns evident in the last financial crash are emerging, it is not straightforward repetition.
Mirroring 2008/9, some sectors have reduced hiring considerably while others such as the charitable and public sector has increased hiring (4%). Graduate jobs in retail and FMCG have seen the largest cut at 45%.
IT and engineering continue to struggle to source the talent they need. Nearly half (42%) of employers found it difficult to fill IT jobs in programming and development and 35% struggled to recruit engineers. Heavy competition and a lack of graduates with the necessary skills were the most common reasons.
The data also shows the significant increased competition for jobs as seen in 2008/9. This year employers received 14% more applications for graduate roles and 9% more for internships and placements. Applications for school and college leaver roles also increased – by 8%.
The nature of the pandemic has meant that employers have had to make significant, and unprecedented, adjustments to their student recruitment. As offices closed, employers moved attraction, selection and development as well as the delivery of internships online.
Many have been forced to significantly reduce internships and placement opportunities this year – 29% and 25% respectively – the largest drop since ISE started collecting this data in 2010.
Employers also have a broader range of entry-level opportunities to manage due to the Apprenticeship Levy.
As a result the opportunities for school and college leavers (largely apprenticeships) have been relatively stable this year, increasing by 6%.
Similarly to graduate roles, employers found it difficult to recruit school and college leavers into IT programming as well as in more skilled trades. This was mainly due to the location of job opportunities and that school and college leavers find it difficult to travel or relocate to take them up.
Saffery Champness LLP
Saffery Champness LLP is increasingly recruiting more school leavers. The balance is currently split at around 80% graduates and 20% school leavers. This year Saffery Champness LLP has maintained school leaver recruitment. They honoured all of the 40 graduate offers they had made up until March, but had to reduce the overall number that they intended to hire this year by 10-15%. All of their internships were put on hold and reoffered to successful candidates for 2021.
Ian Williams, Recruitment Manager at Saffery Champness LLP said: “It is important that we protect our current staff as well as new people moving in, so our approach to recruitment has been cautiously optimistic this year. We didn’t want to over hire or be in a position where we had to withdraw offers. While, like many other professional firms, we took the decision to reduce the number of graduate jobs this year this was only by a small amount, and we made sure that we could fulfil our obligations on offers that we had already made and maintained school leaver recruitment.
“Our appetite to recruit school leavers over a longer period is increasing. Partly due to commercial reasons, but also to help build a more diverse and inclusive team. Not everyone can afford to go to university, lots of people are opting for alternative routes and the calibre of those people is increasing.”
This year Fidelity International’s UK entry-level programmes were made up of 31% apprenticeships, 35% graduate schemes and 34% internship/placement programmes.
Recruitment has been stable overall with 2% fall in graduate recruitment, 2% increase in school leaver hiring and 3% more internships than the previous year.
Gemma Elsen, Global Head of Early Careers atFidelity International explained: “We have been really lucky that all of our entry-level recruitment has been relatively stable this year. School leaver hiring has gone up slightly while we have slightly reduced our graduate numbers. This reflects our appetite to bring more school leavers into the business, particularly in operations and technology as well as the investment management space, which has been dominated by graduates. We have also been more successful in converting our placement students into graduate hires this year. Next year we hope to take on more interns than graduates, so they can be an even more effective talent pipeline.
“There is recognition at a senior level that we need junior talent. Regardless of what’s happening economically, we covet young people as they will be our future leaders. They also offer us a fresh perspective. We’re investing in diversity and we know we can turn the dial from a bottom-up approach, particularly with our interns and apprentices.”
This year Severn Trent’s entry-level programmes were made up of 60% apprenticeships, 20% graduate schemes and 20% placement programmes. Despite Covid-19, these programmes have continued. Apprenticeships have increased by 30% and graduate numbers have dropped by the same proportion as programmes are realigned to the company’s skills needs for the future.
Jade Pearson, New Talent Programme Manager at Severn Trent explained: “We’re very fortunate that it’s been business as usual for us since the pandemic. We’ve just entered a new Asset Management Plan cycle, which enables us to identify the core skills and capabilities we’re going to need to be successful over the next five years. We’ve invested in our graduate engineering programme over the last few years whilst also introducing new apprenticeships in a range of occupations.
“Our recruitment strategy this year reflected all of this with a slight reduction in graduate numbers and an increase in apprenticeships. Despite lockdown we’re really proud to continue with our placements as the work is mainly office based and we were able to get onsite when necessary, in a covid-secure way.
“We’re always looking for new ways we can create opportunities for future generations irrespective of background through initiatives such as the Kickstart Scheme and our new talent programmes. We’re seeing a real kick-up in interest in apprenticeships across the business.”
1 The graduate labour market 2000-2020 (ISE data)