Graduates aren't what they used to be

The higher education system changed dramatically during the 1990s. Hiring managers aged over 40 will remember a very different place to that which exists at the universities we are hiring from today. They will also have experienced a radically different graduate recruitment marketplace, where a far smaller number graduated and were entering elite management fast-track schemes, rather than the large-scale hiring of today. If you've heard someone comment that graduate recruitment isn't what it used to be, they are absolutely right.

It’s bigger. There are:

• Three times as many universities (42 -> 115)
• Four times* as many graduates (68,000 -> 292,000)
• Six times as many enter graduate employment (33,700 -> 180,000)

The gender balance has also changed, from 63% male in 1980 to 54% female today.

Grades have changed too:

• More A Levels are awarded an A grade (9% -> 25%)
• Fewer A Levels are failed (32% -> 2.5%)
• Nearly twice as many get a 2:1 or 1st (35% ->65%)

* To put that in perspective, the largest 14 universities now produce more graduates than the entire system did in 1980.

In this very different world, graduate recruitment was also very different. The fore-runner to today’s Association of Graduate Recruiters was SCOEG - The Standing Conference of Employers of Graduates. It had a strict code of conduct, built on the idea the graduate recruitment should not interfere with the studies of students, including:

• No personal contact during the Michaelmas term (leading to the birth of the graduate employment presentation)
• No second interviews during the Lent term
• Strictly no job offers before Easter (although it’s clear some were already flouting this regulation)

It’s also enlightening to review some of the findings of their annual survey from 1980:

• The hardest areas to recruit were engineering and IT. No change there.
• The highest payers were the manufacturing firms, and the accountancy firms were the lowest payers. “Financial services” was a lowly 10th out of 13 sectors on pay.

Using recent figures from employers, we’ve broken down the jobs available to graduates into a few very broad classifications:

Only 2% of graduates who enter employment, or 1% of all graduates, actually enter an elite graduate programme, but we’d suggest that many graduate recruitment programmes are still based on advertising and systems originally intended for a small elite. Many of today’s programmes are roles which were not historically “graduate jobs”, and this leads to some unfortunate differences between the expectations of employers and graduates.

We surveyed 2,500 students, to understand what their expectations were for entering employment. Only a minority expect to get a place on a recognised graduate scheme and their pessimism grows as they go through university; 40% of those graduating in 2013 expect to do so, versus just 34% of those in their final year and about to graduate.

We defined an elite group of those who do expect to get onto a graduate scheme, also expect to get a 2:1 or 1st, and are graduating within the next three years.

They were extremely realistic – even a little unambitious – on salary, with over half expecting to earn £25,000 or less. Over half also think the top graduate schemes pay £30,000 or more, but only 2% identified that some schemes will pay in excess of £40,000

They also expect to leave fairly rapidly. Although 98% expect to be with you after a year, this drops to 76% after two years, 44% after three, and just 18% after three years. Given that AGR members expect graduates to stay for 6 years, this shows a significant gap between employers and the graduate talent they are hiring.

One of the most interesting aspects of this survey was in exploring career development. It’s a hot issue for those looking for careers, and every employer makes some general promises. But we wanted to understand the speed and pace of that development. We asked:

• How fast do you expect to manage people?
  43% said within a year, rising to 77% within two years.
  AGR employers said 2.5 years.
  
  
• How fast do you expect to manage projects?
  15% said immediately, rising to 57% within a year.
  AGR employers said 2 years.
  
  
• How fast do you expect to manage budgets?
  69% said within two years, rising to 86% within three years.
  AGR employers said 3.3 years
  
  
• How fast do you expect to work autonomously?
  29% said immediately, rising to 66% within a year
  AGR employers said 1.5 years.

The disparity is clear, and employers need to think very carefully about how they manage the expectations of top graduate talent to ensure they are not rapidly disenchanted after joining.

We’d offer six observations from this research:

• There is a gulf of understanding between the “graduate” world of many hiring managers and the graduate world of today. Graduates are, indeed, not what they used to be.
• Graduates’ financial expectations are more realistic than their work expectations.
• Only a tiny minority of today’s graduates will end up in “graduate jobs”, thus questioning further the need for so many university places.
• Many graduate recruitment tools were designed to attract and identify the “elite”, but only 1% of graduates will ever end up joining it
• Employers need to offer more routes to entry, beyond graduate schemes.
• Non-elite graduate recruitment needs to be done differently.

Simon Howard
Simon.howard@workcomms.com
020 7492 0007