Valuable talent “being lost to the system”

Citation

(2005), "Valuable talent “being lost to the system”", Education + Training, Vol. 47 No. 8/9. https://doi.org/10.1108/et.2005.00447hab.001

Valuable talent “being lost to the system”

For all the efforts and money put into graduate recruitment, valuable talent is being “lost in the system”. This is one of the messages revealed by research on corporate graduate recruitment, by the Institute for Employment Studies and the Council for Industry and Higher Education (CIHE), which examined the practices of leading UK employers for evidence that their graduate recruitment is meeting their business needs, is fair in selection, and is encouraging diversity.

The internet is a tool for attracting talent to organisations, and employers have benefited from its processing efficiencies. Most open their doors to all graduates through their websites and then let selection processes reduce the volume to find the “right” number of the “right” quality. But the online selection process may be excluding a diversity of talent beyond that indicated by fairly crude measures such as A-level scores and degree class. And a growing number of other graduates are entering outside of these, through general recruitment routes.

Linda Barber, IES research consultant and lead author of the report, said: “Paradoxically, the power that technology offers has not been harnessed to explain or track the full range of graduate employment opportunities within organisations, outside centralised corporate schemes, such as at business unit level. Graduates who enter jobs at local level typically remain “hidden”, and run the risk of being under-used. We found that, at this level, employers do not collect graduate tracking data in any meaningful way, and so have nothing to analyse on their progress or potential contribution.”

This lack of tracking is also a weakness downstream for tracking graduates emerging from corporate schemes into the wider workforce. Data are seldom collected, so they also risk becoming “hidden”. This raises not only the question of measuring the returns on investing in graduate schemes, which are expensive to run, but also on what basis employers recruit new intakes, given the lack of rigorous monitoring systems.

The big challenge for employers is how to screen high volumes of applications fairly. Major employers use a competence-based approach to selection for their graduate schemes, and again technology offers the potential to be fair and cost-effective.

Helen Connor, CIHE associate director, said: “Businesses are increasingly recruiting online. This helps them to reach a broader range of graduates. If they can give more information on the capabilities they are looking for, and help candidates to self-assess their suitability, they will be doing themselves and graduates a good turn. Too many graduates waste their own and employers’ time, and clearer guidance can help everyone.”

The focus needs to be on the actual competencies and general cognitive abilities needed by the business, not crude proxies for competence, such as degree class or UCAS points. These can exclude graduates who entered higher education through non-traditional routes, and who remain “hidden”: either put off from applying, or “lost” at the initial sifting stage. This may risk compromising initiatives to increase workforce diversity, and potentially is a lost business opportunity for securing talent. Importantly also, employers do not send out the right signals to students from these wider backgrounds, more of whom are currently being encouraged to aspire to higher education. In addition, reliance on the internet and technology removes the personal touch, which was found to be instrumental in enhancing employers’ reputation and brand in the graduate marketplace. The report urges employers to form stronger and wider links with universities and careers advisers rather than abandon such long-standing relationships to rely solely on the internet.

The research involved 40 interviews in ten case-study organisations and an audit of 100 graduate employers’ web sites. The study covered both strategic and operational viewpoints, from HR and a business-management perspective, in each of the case-study organisations.

Meanwhile, employers report an increase in both salaries and vacancies for graduates, according to research by the Association of Graduate Recruiters (AGR). The AGR Graduate Recruitment Survey 2005 – a survey of some of the UK’s leading employers – reveals that graduate vacancies have risen for the second year running, with the number of positions for graduates leaving university this summer up by 11.3 per cent on last year. This rise in vacancies is reflected in a fall in applications per vacancy. Employers received an average of 32.9 applications for every vacancy during the 2004-2005 recruitment year, compared with 37.6 applications per vacancy in 2003-2004.

Graduate starting salaries also continue to rise. AGR employers are paying this year’s new graduates a median starting salary of £22,000 compared with £21,000 last year, a year-on-year increase of 4.8 per cent. This is the largest increase in salaries for more than five years and the third consecutive year that salaries have risen by more than the cost of living.

The survey is based on the responses of AGR members – many of the UK’s largest graduate recruiters in both public and private sectors.

Carl Gilleard, AGR chief executive, said: “It is good news for graduates, with our survey indicating that the market is continuing to grow. Graduate vacancies have risen by more than 20 per cent since 2003 and there have been consistent above-the-rate-of-inflation rises in salaries for three consecutive years. This suggests that employers do value graduates who can offer the right skills and experience. The results show that there has been growth across the board, but particularly in the IT and investment banking sectors, where there has been a degree of catch-up following a couple of lean years. A closer look at the statistics suggests that there may be some mismatch between graduate aspirations and market conditions. For example, accountancy and professional-services firms report one of the largest increases in vacancies but the smallest number of applications.”

In total, AGR employers have increased the number of vacancies on offer to graduates by 11.3 per cent in 2005. This is the second year of increased vacancy levels for graduate jobs – in 2004 employers recorded a 15.5 per cent rise in vacancies. The number of graduate jobs has increased by more than 20 per cent since 2003. The largest increases in vacancy levels in 2005 were reported by IT companies (47 per cent), accountancy and professional-services firms (20 per cent), investment banks (17 per cent), and retailers (9 per cent). By region, the largest numbers of vacancies were in London (45 per cent of the total). Most parts of the UK showed a growth in vacancies, particularly the north west of England (29 per cent), south east (24 per cent) and south west (20 per cent).

The median starting salary for graduate-level jobs across all sectors is £22,000, which represents a rise of 4.8 per cent on last year. Graduate starting salaries are highest in London (£26,500) and the south east (£22,000) and lowest in Wales (£18,800) and Northern Ireland (£18,500). Investment banks remain the most generous, with starting salaries of £35,000, followed by consulting firms (£28,500) and law firms (£28,000), although salaries in these areas have now remained unchanged for three years. The three sectors with the largest increases in starting salaries are accountancy and professional services firms (up 10 per cent to £22,000), the public sector (up 7 per cent to £22,000) and IT companies (up 5 per cent to £22,000).

On average, AGR employers received 32.9 applications per vacancy for their 2005 intake, a decrease on the 39.7 applications per vacancy received last year. The most popular employers were fast-moving consumer goods companies, which reported an average of 122 applications per vacancy, and investment banks, which received 42. The lowest number of applications per vacancy was reported by accountancy and professional-services firms – 16 applications per vacancy – largely because of the huge numbers being recruited to this sector.