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What do employers want from graduates in 2022?

What are employers looking for in current graduates – and how much are they paying them? The Institute of Student Employers' Stephen Isherwood unpacks the latest data
This article is more than 1 year old

Stephen Isherwood is Chief Executive of the Institute of Student Employers (ISE).

Four questions from the higher education sector dominate my inbox.

Are vacancies going to drop? Are employers switching to apprentices instead of graduates? How important is a 2:1? And how do we get employers to hire more of our international students? This year’s Institute of Student Employers Student Recruitment Survey provides some answers.

Should students be worried about the job market?

Global and national economic forces, the political environment, and the changing needs of employers and students directly affect the student labour market.

Levels of recruitment have historically tracked growth and retraction in the UK economy. 2022 was a bumper year with overall recruitment levels up 19 per cent year on year. For 2023, we predict a growth rate of six per cent.

This is still growth, but at a much reduced rate. Our concern is that, should financial pressures on employers increase, they will reduce hiring levels. Students shouldn’t panic, but we do advise them to apply early.

Apprentice routes

According to the DfE’s statistics, the number of under 25s starting apprenticeships has been trending down since 2016. But the ISE’s data shows the opposite with school leaver vacancies up 20 per cent in 2021-22.

Why do our numbers buck the national trend? Firstly, ISE members tend to be larger employers and are likely to have large levy bills. They also have the HR teams and infrastructure to build and run apprentice programmes.

School leaver vacancies account for roughly 25 per cent of all the vacancies we report on – the bulk of hiring is still at the graduate level – so by volume there is much greater increase in graduate hires. There probably is some displacement from graduates to apprentices, but with graduate hiring also up 15 per cent year-on-year, it is difficult to assess by how much.

However, it is easy to generalise about the student recruitment market. Industry and location impact student career preferences. Staff shortages in some sectors continue and around one in ten graduate vacancies go unfilled each year. Forty per cent of employers say they are finding it difficult to fill graduate jobs.

The graduate market is always competitive for students. But employers received fewer applications compared to this time last year, with on average 62 applications per vacancy in 2021-2022, compared to 91 applications per vacancy in 2020-2021.

Do employers care about grades?

Many employers have questioned employers’ use of UCAS tariffs and degree results as selection criteria and the number who do this has declined over a number of years.

For the first time, less than half of employers now stipulate applicants possess a 2:1 degree, and only 13 per cent set a UCAS point minimum. Employers place more trust in sophisticated selection tools than academic thresholds and seek to broaden the universities, colleges and schools they hire from. The arguments about grade inflation are largely irrelevant to most employers.

Global mobility

The ISE actively campaigned for the reintroduction of the graduate visa – many employers hire international students to fill talent needs and aid internal global mobility. The successful drive to expand international student numbers is leading many universities to push employers to hire more of them.

In a typical year international students make up over 10 per cent of our members’ graduate intake, and most tell us that international students are already proactive job seekers. And although the two-year graduate visa opens up opportunities, most large employers are recruiting students for the long term and use the skilled worker route.

My advice to university careers teams is to focus on smaller employers who may not know about the merits of the graduate route. It’s also worth noting that only six per cent of our employers look for a master’s degree.

Are graduate salaries keeping up with inflation?

The question I get asked most, aside from hiring levels, is about salaries. When I reviewed our survey results I was surprised to see that graduate salaries are not keeping up with inflation.

The typical salary for a graduate was £30,921, a rise of only 1.4 per cent from £30,500 last year. With inflation at 8.6 per cent, graduates have effectively taken a 7.3 per cent pay cut from last year.

Many employers include a signing-on bonus or a relocation allowance in starting packages, but we are concerned that graduates are experiencing a real wage decrease. Employers tend to prioritise existing workers over new hires when they review salaries, but graduates entering the workplace often face higher accommodation and travel costs when they start employment.

The last three years have seen our market contract and rapidly bounce back. My cautious prediction is that this will be a challenging year, but employers’ long term need for a higher skilled workforce when lateral hire talent pools are stagnant or declining will increase, not decrease, their focus on the need to develop and retain early talent.

2 responses to “What do employers want from graduates in 2022?

  1. Skills and experience will always trump degree results in the eyes of employers. I’m one of the many with a 3rd class degree but I did an HND beforehand. These 2 qualifications and my 6 years in higher education were enough to open a few doors that let me build my skills base to then go for what I wanted.

    I would suggest to any potential undergraduate that finding a sandwich course, taking a gap year or going to an ‘applied’ institution (ie an old polytechnic) would be advantageous. Even a gap year spent working in a bar or restaurant shows employers you have the workplace experience that someone who has just gone straight through education without a part-time job lacks.

  2. “Should students be worried about the job market?” Possibly, though many employers will be recruiting some are starting to look very hard at just how engaged graduate employees are, the ‘quiet quitting’ (AKA being f’ing lazy b’stards) graduates they’ve already employed seem to be more prone to are now potentially damaging new graduates’ employment prospects.

    “Apprentice routes” Unsurprisingly employers seeing the above issues and the associated lack of loyalty from many graduates are looking seriously at the apprenticeship route as a better option. The graduate dross, who went to Uni because Bliar and those that have followed want as many young people to be indoctrinated and debt burdened for easier control, even though they were not academically minded, who would have done better to have undertaken an apprenticeship will be the ones who suffer most.

    “Do employers care about grades?” YES some employers very much do, but also the University attended, a middling grade from the ‘right’ University trumps a First from a middling University, especially when that University becomes known for giving enhanced grades for DIE reasons, with other graduates from said Universities seeing such biases amongst the first to share the bad news in the workplace about it.

    “Global mobility” A company operating on an Internatinal scale may see benefit in recruiting such graduates, though potential loyalty will often still be a factor, both to the company and to their home nation, such conflicts of interest and longer-term company stability concerns with graduate employee churn may limit options, especially with smaller employers.

    “Are graduate salaries keeping up with inflation?” Is any bodies? Graduates are fooling themselves if they think employers will treat them any differently, those that remain in Academia especially so.

    Cynic or realist? I’m the latter I think, with experience in recruiting staff within and without University, with both a recent graduate and a drop-out who would have done better to undertake an apprenticeship in the immediate family and many contacts in the ‘real world’ of work who have struggled to recruit and retain useful graduates, as against the useless dross, for some time.

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