The job market is a battleground, and the latest research reveals a shift in strategy for employers. With graduate hiring on the decline, companies are turning to apprenticeships as a viable alternative. But here's where it gets controversial: is this a smart move, or a risky one? Let's dive in.
Economic pressures have led to a challenging landscape for university leavers, with employers cutting back on graduate intake for the second year in a row. According to the Institute of Student Employers (ISE), graduate hiring has dropped by a significant 8% year-on-year. However, there's a silver lining: apprenticeship recruitment has seen a remarkable 8% increase.
Despite this growth, the overall entry-level job market has taken a hit, with a 5% decrease in opportunities. A concerning 42% of employers have reduced graduate hiring, and 40% have cut back on school and college leaver recruitment. This has led to a record low in graduate job openings, with research revealing a seven-year dip.
But why are employers favoring apprenticeships over graduates? Stephen Isherwood, joint CEO of ISE, sheds some light on this. He acknowledges the tough market for those leaving education but emphasizes that companies are still hiring entry-level talent. Isherwood believes the shift in balance between graduate and apprentice hiring is a strategic move by employers to diversify their talent acquisition and address skills shortages.
Jack Jarrett, former international resourcing business partner at Amnesty International, agrees. He attributes the change in strategy to the increased demand for practical skills. With routine tasks being automated by AI, companies are seeking talent with hands-on experience.
However, graduates face a particularly challenging market. Indeed reported in June that graduate roles had hit their lowest level since 2018. Even the big four accountancy firms have cut back on graduate hiring, with KPMG reducing its cohort by a staggering 29%.
David Morel, CEO of Tiger Recruitment, explains that these statistics reflect a broader trend of caution in hiring due to economic uncertainty. He highlights the fierce competition for roles, with employers pulling back on recruitment.
Jarrett believes AI adoption is also a factor. He argues that AI is taking over the routine tasks that traditionally served as training grounds for graduates, leaving a gap in practical experience.
The long-term implications are concerning, according to Morel. He warns of future talent shortages and organizations struggling to maintain a skilled workforce. Jarrett adds that employers risk demoralizing the next generation and increasing workload pressures on existing staff.
Graduate schemes are often the initial stage of an organization's talent pipeline. Cutting these consistently, Jarrett explains, creates a leadership vacuum that will be difficult and expensive to fill later. Without fresh talent, organizations risk stagnation and reduced innovation.
Despite the cuts, graduate applicants are on the rise. The ISE reports that the average number of applications per graduate vacancy has more than tripled since 2002-03, from 38 to a staggering 140. In 2023, over 1.2 million applications were submitted for just under 17,000 graduate vacancies.
The ISE attributes this rise to candidates using AI to write CVs and cover letters more efficiently. However, this increase in applications, coupled with fewer graduate opportunities, has heightened competition, leaving talented graduates frustrated.
So, what's the verdict? Is this a temporary shift or a long-term strategy? Are apprenticeships the future of talent acquisition? And what does this mean for graduates and the job market as a whole? We'd love to hear your thoughts in the comments below!
