If you were to keep half an eye on the news coverage surrounding graduate recruitment in the UK you may be forgiven for being a little confused.  There are in equal amounts reports of graduate numbers rising and of graduate programme intakes on the increase and decrease.  But what are the true current issues surrounding graduate recruitment?

UCAS (the Universities & Colleges Admissions Service) recently reported that applications to UK undergraduate courses were up by 11.6% on the number of applications in 2009.  Some 660,953 students have now applied for full-time courses at higher education institutes starting in the autumn of 2010.

The last Labour government would probably find these UCAS statistics most encouraging having set a target of getting 50% of young people to go to university.  The target received a lot of criticism both at the time and still today with many labelling it ‘unrealistic’ or ‘artificial’.  Perhaps this was an admiral aspiration in its purest form, but the rate of graduate vacancies is not increasing at the same rate as university intakes.

So why are record numbers of students applying to university? Is it to delay entry into employment or that there aren’t any other choices? “With nearly 2.5million unemployed persons currently in the UK, it isn’t surprising some students are entering University now in the hope that the graduate employment market will have improved in the next 3 or 4 years.  This seems to be a risk some students are willing to take despite the fact they will most likely leave university with a mortgage-like debt” commented Cynthia Bostock, Managing Director at GradWeb (one of the UK’s leading providers of products & services to the Graduate Recruitment Industry).

Is it all doom and gloom for graduates?  Certainly so if the press are to be believed – after the July launch of the AGR’s (Association of Graduate Recruiters) Annual Survey one particular statistic became the focus; Applications to graduate programmes are now over double what they were just 2 years ago, an average of 68.8 applications are received for each graduate vacancy (30.7 in 2008).  What followed were headlines like “are university degrees worth the effort?” and “cuts could lead to record graduate unemployment” and many others which included a peppering of the words ‘challenging’ and ‘troubling times’.  Certainly, if you were a graduate no-one could blame you for mild panic!  Fear and competition surrounding graduate vacancies seems to have encouraged applicants to take a ‘broader’ or some might say ‘scatter gun’ approach to vacancies – for many, any graduate programme will do.

You would be entitled to ask the question ‘What, if anything, is the government doing to positively impact the situation?’  Well, the new coalition government is introducing new plans to expand the number of available apprenticeships by 20% and improve vocational training opportunities for school leavers, thus giving students an alternative to the traditional route to higher education.

Any initiative devised to provide greater alternatives to students and alleviate this unbalance in the graduate market will surely be widely welcomed.  However another possible forthcoming edict is expected to receive a more luke warm response.  The outcome of a review into university funding, led by Lord Browne, is due to provide its findings and recommendations this autumn.  It is expected that universities tuition fees will be allowed to rise, a move which could “result in only the most privileged being able to cope with the costs of a university education” according to Aaron Porter, President of the National Union of Students.  “Employers want graduates joining their organisation who can demonstrate future potential through intelligence, knowledge, skill or experience.  It would be lamentable if UK organisations could not fill their talent pipelines with suitable individuals because they simply couldn’t navigate a reasonable route into higher education” stated Michelle Smith, GradWeb’s Campaign Director.

There is life in graduate recruitment yet.  However Michelle Smith believes that there are still opportunities for good graduates in the current market “the headlines have been particularly negative but we certainly wouldn’t consider them wholly reflective of the graduate recruitment market from our own experience.  Negative press has very much overshadowed any positive news headlines like “Half of employers still have graduate vacancies to fill” and “Top employers increase graduate vacancies by 18%” these get totally overlooked’.

It is important to remember that whilst the AGR is the professional body for the graduate recruitment industry the survey is completed only by some of its members.  There are a lot of other organisations, SME’s in particular, that will look to recruit graduates each year and will not be represented in these statistics.  “I can think of 4 or 5 clients with whom we’re working with right now to fill their September vacancies, some very large blue-chip organisations that are now coming back into the market after a few years absence and we are also talking to a few organisations who are launching new graduate programmes on a global level this year”.

Depending on degree choice and future goals, not every graduate will have to compete with nearly 70 peers for each vacancy. Some sectors and professions are more popular than others.  For example FMCG organisations receive on average 205 applications per vacancy whereas accountancy/professional services firms get on average 21.

There are signs of optimism as certain sectors are beginning to experience some economic recovery.  Many organisations, in particular in the Banking, Accountancy and Investment Bank sectors, are increasing the number of placements on their graduate programmes, or in fact where some had previously suspended or cut back their programmes they are now re-instating them, recognising the need to build a talent pipeline for the future.  In the past six weeks alone Kia have announced a new graduate programme, as have interactive telecoms and Softcat as well as organisations such as Tesco, Tata and Deloitte reporting an increased intake for their 2010 graduate programmes.

With the number of job-seeking graduates outpacing the number of graduate vacancies, how can employers manage their potential applications?  Firstly, being clear about the sort of opportunity that is on offer may turn-off some graduates.  Companies shouldn’t fear advertising desk-bound roles as any candidate that applied thinking they could get a 6 month placement in  an exotic overseas office will surely become natural wastage further down the line; be that during the application and selection process or, a worse scenario, once they had accepted a position.  Getting carried away with an idea from an award winning advertising agency is easily done, but in the long run, is ineffective.  Taking a more intelligent approach to attraction will help to target potential applicants more specifically i.e. by gaining a greater understanding of the motivations of an organisation’s existing talent, the focus of an attraction campaign can be narrowed to attract a smaller but more appropriate candidate pool.

How can you select effectively the most appropriate candidates for your organisation?  Comparing CV applications is lengthy and not particularly cost or time efficient.  Volume applications are better handled through a bespoke application form which forces applicants to respond in a like-for-like format; they can even do some of the work for you.   Many employers use a self selection questionnaire at the outset of the application process which provides insight into the expectations of the programme; by asking a  range of questions candidates can select themselves out of the application process if either they feel they are unsuitable for the graduate programme or the programme is unsuitable for them.

So, this might whittle down a few candidates in the early stages, but more often than not this will still leave a mountain of applications that must be dealt with, these must be sifted and reduced to manageable volumes to progress to the next stage of the process.  At this stage organisations should choose to be savvy about their assessment and selection methods.  The means of assessing and selecting candidates is endless so choosing the right tool which will help identify the skills needed by your future employees is crucial.  It may be appropriate to utilise situational judgement questionnaires, verbal and numeric reasoning are in no way uncommon, or perhaps your organisation is interested in the ‘emotional intelligence’ (the ability/skill to assess, manage and control one’s own emotions or that of others) of an individual?  One particular Southampton company is asking applicants to complete a round of mini golf as part of the selection process to assess skills and temperament!

77.5% of companies surveyed by the AGR use the 2:1 degree classification as a minimum entry requirement.  Alongside the ‘doom and gloom’ headlines about the number of graduates outpacing the number of vacancies was news from the AGR that 77.5% of companies require their graduates to hold a 2:1 degree.  “When we begin to work with a new client and undertake a ‘discovery’ about their business many will specify that candidates must hold a 2:1 degree or higher and we will always ask why” commented GradWeb’s Head of Assessment Services, Julie Perry  “a 2:1 is often seen as reflecting a higher calibre graduate, however, 50% of graduates are now achieving a 2:1 or first and the standard of a 2:1 can differ between universities”.

So the question remains is a 2:1 degree benchmark losing its value?  Increasing in trend are companies that stipulate their graduate vacancies are filled by individuals with more than just a 2:1 degree to offer, over a third of organisations now look outside of the degree and seek applications from candidates that can demonstrate appropriate work experience.  These organisations may well be looking forward to utilise HEAR (Higher Education Achievement Reports) in the future.   HEARs are the product of the findings from the 2007 report ‘Beyond the honours degree classification system’ by Professor Bob Burgess, Vice Chancellor of the University of Leicester.  The report is in response to organisations finding the 2:1 degree classification of less and less value.  18 universities are currently trialling HEARs.  A HEAR will provide a range of additional information such as course marks, extracurricular activities and employability skills, and will be issued to graduates from participating institutions from 2011-12.  The report should enable potential employers to have a more holistic view of each candidate, not only their individual academic and extracurricular achievements, but the standard of the degree itself and the higher education institute from where they have graduated.

But Julie sums it up perfectly “the key to success, no matter what tool you use, is knowing and understanding the culture of the business and what skills and competencies are required not for graduates to just survive but to thrive”.

Surprisingly some organisations are still failing to fill their graduate vacancies despite the plethora of graduates that emerge from UK universities each year.  The applications they receive don’t fully meet their requirements and even in these times of oversupply  some graduate vacancies may remain unfilled. For some employers the answer may be to get engaged earlier with their target audience particularly for specific technical disciplines or areas of short supply.  Employers are strategising to identify and attract their ‘ideal’ candidates to their employer brand, as their thoughts start turning to their higher education goals, some targeting students as early as 11.  Organisations are becoming increasingly involved in University life, influencing both the curriculum and extracurricular activities.

Our thoughts turn to just how much influence should business have on the curriculum of UK graduates.  These are the employers of the future, why shouldn’t they invest in their talent pipeline to ensure they have the future skills required to grow their business? Or perhaps you would argue it isn’t appropriate for organisations to exercise their financial influence over the UK educational system impacting both the immediate output of graduates but also the skill base of the future economy.

Organisations though are getting more involved, one way or another.  60% of organisations say they fill their graduate programmes with candidates they have previously been nurturing through industrial placements, part-time jobs etc…  Tesco and Morrison have just celebrated their first graduation from their own bespoke retail degrees, BAe have partnered with Southampton University to offer a degree programme specific to their needs and Logica too offer a sponsored degree programme – the chance to learn as you earn – but on a course designed to fill a gap in their own needs.  It is not difficult to see how these ‘sponsored’ opportunities are becoming more popular.  A student can, for a small commitment to an organisation, effectively ‘pay’ their way through their university years and minimise their student debts – for some this may be the only way in which they can afford to go to University.

Where does all this leave graduate recruitment?  Whilst there is no doubt that as the economic market is slow to recover different organisations are tackling the issue of graduate recruitment in differing ways – one size does not fit all.  Cynthia Bostock commented “How you handle your graduate recruitment strategy now will have a significant impact in the future.  Companies that have delayed, reduced or cancelled their graduate programmes in previous downturns subsequently found they were missing a ‘layer’ of talent within the organisation.  This is the critical talent ‘pipeline’ for future growth and success will come to those who take a longer term view.