ISE’s Student Recruitment survey helps us to better understand the current student labour market and what that means for recruiters.
Against the backdrop of an uncertain economy, political instability, pandemic recovery and changes in higher education, the student labour market has continued to change and shift.
While the worst of the Covid-era may be over, the significant changes to the labour market including hybrid working, how employers connect with graduates, and shifting expectations of workplace skills are important to understand.
Beyond the important and monumental changes to the way student hires are recruited, the impact of a worsening economic situation is impacting every aspect of the student labour market: hiring, reneges and salaries.
This year’s Student Recruitment Survey sets out to understand the pressing changes to student recruitment in a comprehensive way.
Bigger world issues
Multiple pressing and complex bigger world issues are impacting the student labour market and regularly making headlines. For example, climate change is impacting student attraction in unexpected ways. Recently, the University of London announced it would no longer invite oil and gas firms to careers fairs or allow them to advertise their roles to students.
And there are other pressing issues also changing student recruitment.
Decades-long low unemployment (ONS 3.5%) and sustained staff shortages are increasing the difficulty of recruiting students, increasing renege rates, and leading to lower application rates this year.
This year employers reported increased numbers of unfilled vacancies (9% in 2022, vs 3% in 2020). And the highest percentage of reneges from graduates, and school and college leavers, since we started collecting this data in 2017 (12%, up +7% from 2021).
We are currently witnessing high levels of sustained inflation. Earlier in 2022 we found initial indicators that graduate salaries might keep pace with inflation, yet, this prediction was not found in our latest data.
Instead, wages are rising slowly with graduate salaries rising at 1.37% from 2021, school and college leaver salaries rising 0.16%, and placement and intern salaries rising at 4.88% compared to 2021. Due to the current inflation rates in the UK, students are experiencing a real wage decrease.
This year consumer and business confidence has dropped, and the OECD predict that alongside Germany and Italy, the UK will be in recession for most of 2023. We see evidence of this in our data, namely, 53% of employers expect economic recession will lead to a decrease in the number of student vacancies in the coming years.
Hiring continues
Among the turbulent backdrop there is some good news. Despite a period of prolonged economic uncertainty and a slowing of the graduate recruitment market, employers are continuing to increase their numbers of graduates and school and college leavers. However, we do not expect a high level of growth in vacancies for school and college leavers and graduates to continue into 2023.
Other changes occurring in the broader labour market have positive consequences for the student labour market too. Namely, the number of inactive people in the labour market has risen in the UK sharply in the past two years, leading to a reduction in the volume of people able to be hired.
This is leading to some positive, unintended consequences that we found this year. Namely, employers are harnessing virtual and hybrid hiring and working practices to increase the diversity of their graduate and school and college leaver hires to increase worker participation from previously excluded groups of students.
We will dissect some of these trends in more detail over the coming weeks on the Knowledge Hub.
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