In a challenging economic climate, UK employers are reducing graduate hires significantly, leading to potential skill gaps.
- 57% of UK companies have reported hiring fewer graduates than last year, as reported by Adzuna.
- This decline aligns with shrinking entry-level job availability, with a contraction twice that of overall job vacancies.
- Economic challenges result in 58% of graduates finding their job searches extremely difficult, with many unable to secure related professional roles.
- Employers face risks of future talent shortages by neglecting robust graduate hiring strategies.
The job market for recent graduates in the UK is notably contracting, with 57% of employers reducing their intake of newly graduated individuals. This trend is underscored by data from Adzuna, showcasing a near one-third drop in graduate positions across the nation, which is double the decline seen in general job vacancies. This contraction compounds existing issues of low entry-level pay reported previously.
Habiba Khatoon, Director of Robert Walters UK, highlights the profound challenges graduates face due to tightened economic conditions. Khatoon remarks, “Graduates across the UK are experiencing considerable roadblocks when looking for jobs right now – when economic conditions get tighter, company’s graduate intakes will inevitably reduce or in some cases be put on-hold altogether.” There is a risk, as she warns, of future talent bottlenecks, potentially increasing competition and costs for specific roles, especially evident in sectors like accountancy and legal services post-COVID.
The anticipated rise of Gen-Z, projected to constitute over a quarter of the global workforce by next year, does not seem to alleviate current hiring reductions. Surprisingly, 31% of businesses claim to be hiring ‘a lot less’ and 26% ‘a little less’. Reasons for this reduction include 39% of employers citing limited hiring budgets, 25% lacking capacity for training or upskilling, and 22% shifting focus to hiring more senior talent. Such shifts could exacerbate future skills gaps, particularly if senior employees begin retiring early without successors from graduate pools.
The struggle for employment among recent graduates is stark; 58% describe their job search as extremely difficult, with a significant portion still jobless months after graduation. The economic stagnation has led to fewer vacancies, while starting salaries experience minimal growth, according to Khatoon. She states, “With the economy still sluggish, many employers are holding onto their existing workforce – but students are continuing to graduate at the same pace – leading to a consistent funnel of graduates vying over a drought of positions.”
Employers are escalating their demands for entry-level roles, with StandOutCV finding over half now requiring an average of 2.7 years of experience. The highest priority for employers remains a willingness to learn, according to 72% of respondents in a Robert Walters poll. Habiba Khatoon emphasizes that, despite the tougher demands, graduates represent the future labor market, and maintaining stringent requirements could deter the cultivation of a competent future workforce.
With current hiring constraints, strategic focus on graduate recruitment is critical to avoid long-term skill shortages.
