ISE’s Student Development Survey shines light on graduate and apprentice retention rates and why they decide to move on.
Retention is a core commercial aim for development programmes as employers are keen to both retain the talent they have invested in and to continue seeing their early career hires flourish within the organisation.
ISE Student Development Survey 2023 explores how the average proportion of retained graduates and apprentices differs across the first five years of employment.
Graduate and apprentice retention rates
The findings show that a similar proportion of graduates and apprentice cohorts are retained over their first five years of employment.
Averaging across all sectors, 56% of graduates will remain employed with the same firm after five years – less likely than apprentices as 61% of them will remain employed. However, there are considerable differences in retention between sectors.
For example, only 47% of graduates in the legal and retail, FMCG and tourism sectors are likely to be retained by their original employers after five years. This is compared with 78% of graduates in the charity and public sector.
It is important to compare the retention levels between graduates and apprentices in the same sector. Across the sectors, the percentages are similar between graduates and apprentices except the energy, engineering and industry sector. Here, 74% of apprentices are likely to be retained five years after joining, compared to only 59% of graduates.
If we look over time, there seems to be a slightly downward trend on the retention of graduates and apprentices. The retention rate for graduates after three years was 79% in 2011, dropping to70% this year. ISE only started collecting apprentice data in 2019 when the retention rate was 77%, in 2023 this has fallen to 71%.
See the retention rate trends in detail in the ISE Student Development Survey report.
Why staff move on
There is a wide range of reasons why staff move on during their first few years with an organisation.
The most cited reason for leaving the organisation after the development programme was either moving to a similar role in a different company (identified by 62% of employers) or moving to a different sector or occupation (39%).
These common reasons provide insights into where they are going, but not so much about why they are leaving, but the data suggests that common reasons include dissatisfaction with pay (40%) and progression (18%).
These reasons were mainly fairly similar to the reasons given in last year’s survey. However, there were some important differences. There was a significant decrease in the proportion of respondents who reported that staff left their role due to the location (3% in 2023 compared to 40% in 2022). The hybrid work environment and the flexibility that it offers may be the reason for this shift.
Companies were less likely to cite staff being dissatisfied with progression (18% in 2023 compared to 33% in 2022) but more likely to cite staff moving to similar a role in a different company (62% in 2023 compared to 51% in 2022).
While dissatisfaction with pay remains the same from last year (40% in 2023 and 2022), it has increased significantly from 2020 (27%) and 2021 (28%).
The economic fallout and rising cost of living will continue to have an impact on new starters and their career aspirations, and we will need to keep a close eye on this trend.
Diversity, inclusion and retention
Most organisations reported they capture diversity data on their new hires at varying parts of the recruitment and onboarding process. Only 4% of employers did not capture diversity data, whereas 30% captured diversity data as part of their monitoring of longer-term progression.
It was common (40%) to capture diversity information during the induction and onboarding process. There were also a large proportion of employers who captured diversity data during recruitment, but of these 36% were unable to then use the data that they capture to support the ongoing progression of their staff.
Retention is an important indicator of a culture of inclusion within a workplace. Where organisations have less inclusive cultures, they typically experience higher turnover rates from those who experience a lack of belonging in the workplace.
That is why it is essential that employers track the diversity and inclusion data of the student hires that leave their organisation. However, a large proportion of respondents (43%) reported that they did not track diversity in relation to retention.
Around a third of respondents (30%) reported that they do not have any retention issues related to any particular diversity strands, but other employers reported that they find it more difficult to retain Black heritage hires (16%), Asian hires (9%) and women (8%).
Some respondents also pointed out that there were lack of awareness and support mechanisms in diversity in the workplace.
This suggested that more needs to be done to ensure development programmes understand diversity and inclusion in different social categories such as race, class and gender, and how these programmes affect retention or development in the organisation.
Although it is also important to note that training and support in these areas have become increasingly important, so there may be a sense that these changes are still feeding through into the experience of new hires.
Developing and supporting a diverse and inclusive workforce is one of the topics explored at ISE’s forthcoming Student Development Conference.
All respondents reported providing a range of support for early career hires. Most of these forms of support were similar to those provided last year, but there were some significant differences.
Companies were less likely to provide employment advice and support (11 percentage points) and staff association (10 percentage points).
As well as buddy/peer support schemes (99%), the majority of respondents (85%) provided mental health support to early career employees. Respondents perceive that there is an increasing need for support in mental health for student hires.
Explore more trends and industry themes at this year’s ISE Student Development Conference taking place 5 July 2023.
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