01/11/2024
New data reveals a fiercely competitive early careers labour market and a slowdown in hiring growth. Stephen Isherwood, joint CEO at the Institute of Student Employers, explores the key trends HR professionals need to know.
The early careers labour market typically mirrors the current economic landscape, and this past year is no different.
This year’s Student Recruitment Survey from the Institute of Student Employers (ISE) reveals competition for jobs has reached new heights as employers hiring growth rates slow down. At the same time, student application volumes have shot up as employers reduce barriers to applications while candidates embrace AI in applications.
You can download the top ten trends, in the meantime let’s further explore how employers are responding to economic trends and what the future may hold.
Hiring under pressure
In a year when the UK economy has experienced occasional contraction and limited growth, we are pleased to see that both graduate and school and college leaver levels of recruitment have risen.
But growth rates have slowed and are in single digits. While the graduate market has seen a modest 4% growth over the past year compared to 6% in the previous year, school leaver hiring grew 9%, compared to 20% last year.
For the coming year, employers are now forecasting just 1% and 7% growth in graduate and school leaver vacancies respectively.
If the economy isn’t growing neither are employers and budgets are under pressure. ISE members tell us they are expected to achieve the same outputs or greater with reduced resources.
Student hiring levels come under pressure for two reasons in a tough economic climate: growing businesses generally need more people but when growth is restricted organisations need lower numbers of new hires. When an organisation is attempting to control its cost base by reducing overall headcount, it can be difficult to simultaneously justify entry-level hiring.
Long-term goals
Here at ISE we have always encouraged employers to look at their long-term talent requirements. And in the long term, employers face two significant labour market challenges: declining birth rates and the increased need for highly skilled people.
Our view is that employers are currently shielded from these two pressures because of poor economic growth. But once growth returns, we expect them to face significant shortages of available talent. The post-pandemic hiring crisis demonstrated just how quickly labour markets can tighten.
Predicting future resource needs is difficult – many employers find setting hiring targets 12 months ahead difficult enough (the typical student recruitment cycle still runs from September to September). Student development programmes run over an even longer time frame and are often two to three years long.
The organisation that cuts hiring numbers this year may not see an impact until they realise they have a shortage of newly qualified people or junior managers in a few years’ time.
And over the next three to four years, we can expect growth rates to pick up (the OECD predict the UK economy will grow 1.2% in 2025). This is why we always recommend that budget holders and workforce planners hold their nerve when it comes to student recruitment and development. Today’s hires are tomorrow’s leaders.
Original Article: PersonnelToday
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