Data and experience provide an insightful view to what is likely to happen in the graduate labour market in 2023. Charlie Ball, head of labour market intelligence for Prospects at Jisc, offers three predictions.
I don’t agree that you can predict the future, but we can take an educated guess. Here are three things I expect will happen in the graduate labour market that will impact recruiters in 2023.
1. There’s a recession, but not as we know it
We’re in recession, and while some of the drivers are easing, we’re likely in this for the year. Business confidence will dip, so investment in recruitment and development could also fall. There may also be redundancies.
At this point in the season, you’d already expect to see this taking place, but, so far, outside some of the big tech firms, this isn’t that evident in the graduate labour market – at the moment.
The current labour shortage is the reason graduate recruitment hasn’t yet faltered. Those industries that employ big numbers of graduates – such as IT, professional services, healthcare and engineering – have struggled to meet business demand for some time. Many organisations have less than ideal levels of staff. This puts pressure on existing employees and can impact productivity.
Even as we move further into recession, I doubt graduate recruitment will reduce significantly. Many graduate recruiters have learned that making short-term cuts to programmes only harms them when recovery eventually comes around.
There is one thing that is for sure. Graduates will be in a better position than those without a degree. The downside is that diversity and inclusion strategies will have a bigger role to play as the more advantaged will also have it easier. Some groups will find it particularly difficult and will need support, such as those workers with disabilities.
2. Retention woes will impact graduate packages
One slightly counter-intuitive consequence of recession and cost-of-living crisis has been the reduction in the willingness of workers to take risks. Quitting and starting a new job is an unknown quantity and a risk many people aren’t keen to take right now.
In theory, this is great for employers, but we also have to remember the labour shortage. One lesser-known trend of the last couple of years is that businesses that are in a position to offer high wages have been steadily attracting people from organisations who can’t keep up. SMEs and public sector organisations are among the casualties.
These people are hard to replace. And they may be even harder to replace in 2023. There are costs to losing employees at the best of times, but losing your key coder or a crucial team leader in 2023 could be very hard for some organisations to manage.
This has an impact on what employers are prepared to offer graduates. This means that we’re going to see even more concessions from business towards more flexibility and better benefits, amongst other things
3. More recruiters will be pragmatic about entry requirements
Grades are becoming less interesting to employers. ISE data shows that this year the number of employers stipulating a 2:1 degree as minimum entry criteria for graduate jobs has fallen to below half for the first time.
Even as I’d started writing this, Santander announced they’d no longer be specifying a 2:1 for graduate entry. They won’t be the last this year. Anouska Ramsay, Santander’s HR Director is quoted as saying:
“Academic achievement is important, but it is only one of many factors we look at when searching for new talent. We believe potential can be found anywhere and this move reinforces our commitment to finding the best candidates from a wide range of backgrounds.”
This is a neat encapsulation of the reasons some businesses are setting aside this kind of entry requirement – the realisation that they’ve been missing talent.
Despite recession, equity, diversity and inclusion will continue to be a focus in 2023 as businesses have realised not only does it help maintain a balanced talent pool, but also current employees take diversity seriously.
Indeed and Glassdoor report, 72% of workers aged 18-34 said they would consider turning down a job offer or leaving a company if they did not think that their manager (or potential manager) supported EDI initiatives.
Read more data and insight on the graduate labour market