The future looks brighter for graduate recruits

Demand for new graduates is set to increase during 2004/05 according to the latest graduate recruitment study issued by IRS Employment Review, published by LexisNexis. In the year to September 2004, most graduate recruiters (41.0%) either increased their previous demand for new graduates or sustained it (33.7%).

After lagging behind in the national labour market recovery, graduates can look forward to jobs with an average forecast starting salary of 20,144 in 2004/05. Half of all employers will be offering starting salaries between 18,000 and 21,700.

The full survey, which examines graduate recruitment in depth, is now in its 13th year, and is available in the new issue (811) of IRS Employment Review (www.irsemploymentreview.com). The findings are based on extensive feedback, in mid-September 2004, from 117 employers who usually recruit new graduates.

Key findings

A significant minority of employers experience difficulties in filling all their graduate vacancies but most do not attempt to address their problems.

Graduate recruitment peaks twice: in October and November and then in January to March. The most effective recruitment methods are sponsoring undergraduates, advertising in national newspapers and former work-placement students.

The most effective selection methods are considered to be assessment centres and face-to-face interviewing. The surveyís findings show that more than half of all employers recruiting new graduates use at least five different selection methods. Interviews are more or less universal, and more than six in 10 use electronic application forms. More than half also use CVs, assessment centres and literacy / numeracy tests.

More than three-quarters of recruiters (77.0%) advertise vacancies on their own websites. One-third (32.7%) conduct online recruitment via an external providerís website. In total, more than one in three recruiters advertise on their own websites and also use commercial job boards.

More than seven in 10 (71.4%) of the largest employers have contracted out some aspects of their recruitment and selection of new graduates. The impact of outsourcing increases significantly as workforce size expands. Fewer than a third (30%) of smaller employers have outsourced.

More than four in 10 (43.4%) employers who hire new graduates recruit at least some of them from among students who have undertaken work experience with their organisation. Recruiters report that, in their experience, former placement students constitute one of the top three ways of finding quality applicants.

Most organisations offer work experience placements for undergraduates, but only a minority provide sponsorship arrangements. There are also indications, from the surveyís matched samples, that decreasing numbers of organisations are willing to offer sponsorships. Only one in five employers (19.1%) provide sponsorships, ranging from 4.0% of private sector services firms to 35.4% of manufacturing and production companies.

Seven in 10 (72.9%) organisations that recruit new graduates offer work experience. Firms in the manufacturing and production sector are more likely to host work placements than private sector services employers (75.6% against 66.7%). Larger graduate recruiters are much more likely to do so (75% to 85%) than smaller employers (52.7%) with fewer than 250 staff.

More than eight in 10 new graduates recruited into graduate-type roles are covered by a formal development programme, typically lasting two years.

IRS Employment Review Recruitment and Retention editor, Neil Rankin said:

îThe graduate labour market is distinct in many ways from other areas of employersí hiring practices. There are few other examples where employers can create opportunities to preview potential candidates months, sometimes years, before hiring them. However, being reliant on an essentially single source - the UKís state-run higher education sector - it is unusually exposed to the impact of changes in government policy.

ìIf we look ahead, the new graduate recruitment round is also likely to be more affected than any other aspect of employersí hiring practices by the introduction of age discrimination legislation. This will take effect in two yearsí time. To date, the government has not issued any proposals for the nature of this legislation. But taking the example of sex and race discrimination, this is likely to affect the content and style of graduate recruitment advertising, usually designed to appeal to a young audience; age limits on eligibility for access to fast-track management development programmes, and any hiring practices that treat mature graduates less favourably than younger ones.î