What does the graduate jobs market look like right now?

Employers are seeing a record-breaking average of 140 applicants per graduate job – a significant 59 per cent increase compared to the previous year, according to the Institute of Student Employers (ISE) latest annual Student Recruitment Survey. The survey draws together the insights of 145 employers who recruited over 40,000 new student hires over the last year.

The graduate jobs market is always competitive. But this surge in applications is the highest recorded in over three decades, demonstrating the challenges graduates face when entering the labour market today.

What’s driving the change?

Several factors are contributing to this heightened competition. The first is the slowdown in jobs growth: the graduate market has seen a modest four per cent growth over the past year compared to six per cent in the previous year.

And employers are now forecasting just one per cent growth in graduate vacancies for the coming year. If the economy isn’t growing, neither are employers.

The second factor is the change in job application processes. Employers are much less likely to set a minimum UCAS tariff criteria for applications. This shift is a deliberate strategy to increase diversity within their workforce, allowing more students from different academic and socioeconomic backgrounds to compete for graduate roles.

Only 13 per cent of employers now stipulate minimum A level requirements, compared to over 40 per cent a decade ago. Instead, they are more likely to deploy bespoke online tests at an early stage – only 21 per cent put candidates through interviews after the application form.

On the one hand, this removal of barriers to applicants should be praised. As a former ”Big Four” recruiter, I used to be continually challenged on why we required at least AAB at A level. But the flip side is that more students from a greater diversity of backgrounds can apply, and are applying, to the vacancies out there.

More applications in a stagnant market equals more rejection messages. Twenty employers in our survey received more than 20,000 graduate applications in the past year. I’ve estimated that graduate recruiters are sending out at least three million rejection messages a year.

Tempered growth, combined with a broader pool of applicants due to lowered entry criteria, has driven up the ratio of applications to vacancies.

Isn’t AI doing all the work?

Another factor is the rise in the use of AI during the job application process. AI tools have made it easier for graduates to submit applications quickly and at scale. However, this ease of application can often lead to a vicious cycle: as AI helps students apply to more jobs, the quality of their applications can drop, resulting in more rejections. This, in turn, can discourage graduates from applying for jobs in the first place.

Interestingly, the use of AI in recruitment has sparked mixed reactions from employers. While one third recommend against the use of AI in applications, nearly half are comfortable with it, particularly when used for tasks like writing cover letters and CVs.

Whatever the case, employers stress the importance of authenticity, warning that relying too heavily on AI might lead candidates to come across a less authentic.

Tougher for international students

International students are feeling the brunt of recent changes to UK immigration rules. Although most employers continue to recruit international talent, 18 per cent have rescinded job offers due to changes in visa regulations.

Although not all the international graduates hired had studied in the UK, 89 per cent had graduated from UK institutions. Most of these international hires were recruited under the Graduate visa (48 per cent) and Skilled Worker visa (47 per cent) categories. Compared to last year (51 per cent), the proportion of international hires recruited via the Skilled Worker visa route had slightly dropped.

The Graduate visa may help initial hiring – but most employers are recruiting for the long term, so the salary thresholds now applied to the Skilled Worker visa have effectively made some roles inaccessible to international students.

A complex but navigable job market

While the graduate job market is undeniably tough, students should avoid the trap of believing the job market is impossible to navigate. Despite the challenges, employer commitment to hiring graduates remains strong – the graduate market isn’t shrinking and opportunities are still out there.

And the ISE is highlighting the importance to employers of being transparent and offering feedback where possible as part of the selection process, as sensitively as possible. Rejection notices can have a significant emotional toll on job seekers.

To increase their chances of success, students should treat their job search as a job in itself and focus their applications on roles they truly want and are suited to. By focusing on quality applications, gaining skills, and adapting to new recruitment technologies, graduates can successfully navigate the complexities of today’s job market.