Robust yet competitive graduate labour market

Oct 31, 2023 | Home Featured, Research, Sector & policy

ISE’s annual Student Recruitment survey launches with a cautiously optimistic outlook.

ISE’s Student Recruitment Survey 2023 has launched, it reveals a robust graduate labour market despite economic woes, but competition for jobs has surged.

This year’s survey ran during July and August 2023, receiving 169 responses from student employers in a range of sectors and organisation sizes. They hired 42,846 graduates and school leavers in the 2022/23 season.

Graduate jobs market

Despite a cooling jobs market and economic uncertainty, graduate vacancies grew 6% in 2022/23, which is higher than predicted (2%). Jobs are forecast to grow by a similar rate (5%) in 2023/2024.

Graduates who have IT, engineering or finance skills are particularly sought after with employers citing shortages in these areas.

The survey also reported increasing competition for graduate jobs with the average organisation receiving 86 applications per vacancy (up 23% on last year).

Jobs in retail, FMCG and tourism as well as financial and professional services are the most competitive while roles in charities, the public sector and built environment are currently the least competitive.

Despite the shift to remote working, the majority of graduates are hired to work in London and the South East (56%). Just 3% of graduates were not based in a particular region, so are fully remote.

Less reliance on qualifications

Employers continue to be less reliant on grade as a means of assessing a graduate’s suitability for a role.

For the first time, less than 1 in 10 employers (9%) set minimum UCAS A-level grade requirements.

Last year we reported that less than half of graduate employers stipulated a 2:1 degree for the first time. This year we see even fewer with those requiring a 2:1 hitting a new low at 44%.

A decade ago, the proportion was 40% and 76% for A-levels and 2:1s respectively.

Cautious optimism

ISE’s annual survey indicated cautious optimism among graduate employers. While vacancies remain up, employers spent £439 less on recruiting each graduate (£4,319).

Despite the high cost of living, we also saw little movement on salaries, which are either just in-line with inflation or falling in real terms.

The median salary for a graduate is £32,000, which is a 3% rise on last year, but worth £1,760 less than it was 10 years ago.

What does this mean?

ISE Joint CEO Stephen Isherwood explains:

“Cost per hire has fallen so employers are cautious with budgets, but they’re not cutting back early talent hiring. The UK needs more skilled workers and employers from all sectors need a strong pipeline of trainee talent to meet their future business needs.

“Students will no doubt be relieved to hear that there are plenty of jobs around, however there is a lot of competition. The big jump in applications could signal that the rising cost of living and high inflation are creating anxiety among students about finding a job and so they are applying for multiple roles. It’s important that students apply early and tailor their applications to reflect the organisation and role.

“While businesses continue to invest in graduates as the workforce of the future, they continue to reduce reliance on minimum academic cut-offs for applicants. This is a positive trend for social mobility. By reducing focus on grades, fewer young people are being filtered out of the opportunity to access a good job on the basis of their performance at school.”

We will be dissecting some of the findings on Insights over the coming weeks. You can download the ISE Student Recruitment Survey 2023 in full.

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