New graduate employees remain loyal to their employer

Citation

(2003), "New graduate employees remain loyal to their employer", Education + Training, Vol. 45 No. 8/9. https://doi.org/10.1108/et.2003.00445hab.005

New graduate employees remain loyal to their employer

New graduate employees remain loyal to their employer

Despite concerns among graduate recruiters, loyalty levels among new graduate employees are high, according to a report from the Institute for Employment Studies (IES). A survey of 362 employers, employing more than 7,500 new graduates, showed that most new graduates stay with their employer for at least three years, with an average retention rate of 86 per cent after three years. One-third of organizations had retained 100 per cent of new graduates after three years. The highest retention rates are in the public and not-for-profit sectors, and the lowest in consumer services.

In their report, “Measuring up: benchmarking graduate retention”, IES researchers Claire Tyers, Sarah Perryman and Linda Barber reveal that planned long-term development is the key to protecting investment in new graduates. Retention is lower among graduates who take on more general roles rather than those linked to a ladder of professional training.

The report reveals that:

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  90 per cent of employers used training and development as a means of keeping new graduates;

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  80 per cent used mentoring or coaching;

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  66 per cent career or salary progression;

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  48 per cent flexible working;

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  46 per cent accelerated promotion; and

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  15 per cent offered loyalty bonuses.

New graduate recruits are highly valued, with 56 per cent of employers admitting they had some new graduates they “could not afford to lose”. But there is no real sense of a shortage of graduate talent, with only 30 per cent of employers agreeing they had to “fight with competitors over a small pool of good new graduates”. Report author and IES research fellow Claire Tyers said: “Students increasingly see themselves as consumers; they want a fast return on the investment they make in getting a degree. For employers, the main retention difficulties seem to occur at the lower end of the job market. Where structured career paths or professional training is part of the package, graduates are more loyal. Employers need to show graduates that the opportunities they want are available internally and that they do not need to leave in order to get where they want to go”.

The organizations surveyed believe that most new graduates leave because they:

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  are unhappy with the job or the employer itself (45 per cent);

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  are unhappy with salary (30 per cent);

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  lack work-life balance (27 per cent);

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  have found a new opportunity in a different kind of role (18 per cent); or

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  have found a better job in a similar role (14 per cent).

Only 8 per cent leave because of a performance issue. Support from line managers does appear to be a challenge, however, with only 37 per cent believing they had managers who were “good” at developing new graduates.