October 2006 – Graduate recruitment overview

The latest research among graduate recruiters predicts a big rise in vacancies for the third successive year with widespread confidence among many employers that the growth is sustainable.

There are few signs, however, that market buoyancy and competition among recruiters is going to lead to the kind of pay inflation that sent starting salaries spiralling in the late eighties and early 1990s before recruiting was cut back severely in the subsequent economic downturn.

Increasing graduate numbers and rising student debt has ensured that competition for jobs remains fierce. At the same time the value of certain degrees appears to be declining among some recruiters who are becoming highly selective in their choices of candidates.

Academically disciplined, career-focused students who find work experience during their breaks, apply for jobs early in their final year and attain upper second degrees in traditional subjects, will find that the path to a blue chip managerial career has probably never been clearer.

But, just as the largest employers have refined their selection methods around a model of managerial sobriety, there are signs of increasing student disaffection in the traditional recruitment marketplace.

Recruiters are grappling with what has come to be known as the “checkout culture”, where graduates delay their entry in to the jobs market to travel the world and sometimes opt for itinerant work or entrepreneurial ventures in preference to a 50 or 60 hour week on what some regard as a managerial treadmill.

“Some of these people are saying we would rather have a cool job working the hours we choose rather slog it out five days a week in some financial job. Some are looking at the expense of living in the UK and saying to themselves, ‘why not go and work in Australia?’” says Tom Mason, managing direction of Hudson Solutions, part of the Hudson human resources and recruitment group.

The danger for blue chip recruiters, most of which have sophisticated diversity programmes, is that their graduate ranks, in terms of degree status and academic complexion are beginning to look anything but diverse. Russell Group Universities and 2-1 degrees tend to predominate.

Research among 235 graduate employers undertaken by Hobsons’ Planning and Research Division for the Association of Graduate Recruiters’ annual summer review found that 63 per cent of the recruiters expected their graduate applicants to have a 2:1 degree or better.

More than a third was seeking a minimum level of UCAS points (points attached by the Universities & Colleges Admissions Service to A-level and AS-level grades that employers find useful for guidance ahead of degree awards). More than a quarter were insisting that applicants had studied specific degree courses.

“Employers are raising the bar with their selection criteria. Students who just go to their classes and cannot show any evidence of participating in clubs and associations or of working effectively in some area are going to make it harder for themselves when looking for a job,” says Hannah Berry of Hobson’s planning and research division.

Sarah Churchman, director of student recruitment and diversity at PricewaterhouseCoopers agrees. “We’re looking for practical employability skills. One of the key things we look for in candidates is commitment to a career with us so we put a lot of store by them having work experience with us. That always helps,” she says.

As vacancies grow, however, recruiters are noticing that graduates themselves, particularly those that fit the recruiting “ideal” are becoming more selective, discussing recruitment and working experiences among their peer groups in specialist online forums.

Colin Tenwick, chief executive officer of StepStone, the online recruitment company and provider of web-based recruiting technology says that candidates are beginning to rank their recruitment experiences with employers. “It’s possible for people to build up a much more detailed pictured of an employer than it was in the past. Online recruitment sites have needed to respond to this.”

Improvements in online career information are simplifying the work of shopping for jobs. Some companies have responded to demands for more first-hand information by speaking more candidly about the work regime. One advantage of this strategy is to encourage self-selection among candidates since some will decide they are not fitted for a particular role or employer.

Web-based video clips have become increasingly common. Potentialpark Communications, a recruitment consulting company, says the proportion of large European companies using video clips in their online career pages for graduates had risen from 13 per cent in the recruitment season of 2003/2004 to 28 per cent in 2005/2006.

“Students are seeking to look behind the scenes. They want their future colleagues to give them first-hand information about the work, the corporate atmosphere and themselves,” says Torgil Lenning, a partner at Potentialpark. “This way the jobseeker can get the sort of intangible information that cannot be conveyed in a recruitment brochure.”

A visit to the online career section of Leahman Brothers, the investment bank, for example, shows staff who entered as graduate trainees speaking about their jobs and the sort of voluntary work that employees are doing through the company in the broader community.

Ernst & Young, the accounting company, is another employer that has responded to graduate requests for greater frankness and authenticity in employer information. “There is a fine line between informing graduates and selling to them. When we talk to graduates it seems that they have become increasingly allergic to corporate spin and cynical about what employers have to say,” says Emma Judge, Ernst & Young’s head of graduate recruitment in the UK.

“We have removed the corporate speak from all our graduate communications and adopted a more personal dialogue with the students,” she says. “Our objective is to give a clear and open view of what the job will involve - both positives and negatives.”

As vacancies grow and competition for candidates increases among emerging businesses, traditional recruiters will need to respond in ever more inventive ways. There are few signs yet, however, that recruiters are going to inflate salaries in the way they did during the late 1980s.

“At that time the answer to shortages among employers was simply to pay more money,” says Carl Gilleard, chief executive of the AGR. “Graduates grew over confident and began to make excessive demands. Today there are significantly more graduates competing for jobs and salaries are not increasing by large amounts. Nor are businesses lowering their standards to get the people they need.

“Graduates must realise that if they have gaps in their CVs they must try to fill them. If you know you’re lacking something that recruiters are seeking then you must find some way of developing that skill or finding some experience before applying.”