Insights into the recovery - Dennis Turner, Chief Economist HSBC
The first key note speaker of this year’s Annual Graduate Recruitment conference was Dennis Turner, the Chief Economist at HSBC, who kick-started our Monday morning by confidently announcing that the recession is over.
Echoes of “phew” could be heard throughout the grand hall, closely followed by.. “really?” (myself included). It seems to me that every morning, BBC news is telling me that another of our favourite high-street stores has been forced into administration, surely a sign that consumer spending is still far lower three years ago. Consumer spending is the driving force of our economy (even I knew that; one take-away, at least, from my first year economics module), so surely then with the negative growth we experienced at the end of 2010 the recession can’t be over?
Not so, Dennis proclaimed. Not, in any recession since 1945, has a period of recovery gone without any negative growth. Undoubtedly, consumer confidence is still fragile, but does still account for two-thirds of all spending in our economy. There will not be a double-dipp recession, and there certainly won’t be an ‘L-shaped’ recession, Dennis told us knowingly, and his insights were to set the tone of the following speeches and discussions about how this maps into the UK’s graduate recruitment. The AGR results mirror Dennis’ outlook, with an increase in vacancies available to graduates predicted, as well as a small increase in graduate salary, despite a two year stagnation. It’s worth noting here that the AGR found the retail sector remains the 2nd largest recruiter of graduates this year, suggesting that consumer spending is indeed back on track.
Emily Gasche is a consultant on the FreshMinds Talent Graduate team
Social Mobility - The buzz words of 2011’s AGR
This has been a hot topic at FreshMinds Talent since our very own Soraya Pugh, Head of FreshMinds Talent Graduate team, appeared on Sky news back in March to discuss the GSK initiative to fund their graduate intake through University.
I was, therefore, interested to hear what the view of KPMG, McDonalds and Network Rail was towards this, and to learn about how they are adapting to what is undoubtedly a changing Higher Education landscape, something that Ian McLaughlin of KPMG opportunistically describes as a “chance to innovate”.
And innovate they have. KPMG have developed a ‘School Leavers Programme’, aimed at widening their talent pool by attracting (you guessed it), School Leavers. This scheme offers a degree, an ACA qualification and precious commercial experience. Network Rail, in their response to the changing graduate population and their expectations, are offering apprenticeships to school leavers who could ultimately wind up with an MSc from UCL or Warwick debt-free. McDonalds are expecting 50 of their Management students to graduate this year, alongside other Manchester Metropolitan graduates. Last year they funded just 10.
This has been the talking point of the day, as graduate recruiters agree that students are becoming smarter consumers of education. It is without doubt that social mobility and diversity are now crucial factors that recruiters need to consider, as their usual graduate pool is set to become narrower.
Emily Gasche is a consultant on the FreshMinds Talent Graduate Team
Top of the pops - are graduate employer rankings an accurate measure of success?
The AGR seminars kicked off in style this morning with an interesting debate into the merit of graduate employer ranking surveys and how much emphasis should really be placed on the accuracy of their results as a true reflection of the graduate employer market.
With input from some of the biggest names in the industry including Barclays Capital, the FSA and Linklaters, the panel debated how accurate these surveys are and what really matters to them when marketing their employer brand.
Whilst representatives from Linklaters and Thales Group argued that graduate rankings such as The Times Top 100 High Fliers, Rate My Placement and GTI/Trendence 300 are an excellent way to measure KPI’s and benchmark against their competitors, it seemed the overriding thought trail was that the research conducted is not always an accurate perception of graduates’ preferred employers.
Do they really understand the what e-rankings mean and are they even of importance to them when making career decisions? Take, for example, the results of some 4000 students surveyed. When asked if they understand how the results are compiled, a whopping 75% answered no.
By the end of the seminar it became clear that, for employers, the ranking of their company was more important in terms of their internal branding and how the rest of the company view the job that they are doing. Only a minority of the panel actually agreed that rankings are a true perception of employer brands and are more about budgets and number of graduates hired than how strong an employer is.
Which certainly rings true for FreshMinds Talent. Some of the most exciting clients we work with are boutique firms who offer fantastic training and unrivalled career progression. We believe it’s not about your position in a graduate employer ranking and more about what you have to offer your graduates once they arrive.
Elsie Rutterford is a consultant on the FreshMinds Talent Graduate team
The results are in…
The most eagerly awaited part of the annual AGR conference is by far the results of the AGR graduate recruitment survey. The longest running survey of its kind, it is held biannually and provides members of the AGR, and graduate recruitment community, invaluable benchmarking and market insight into the latest statistics.
Controversially, the results were released a week early this year to an impatient UK press, provoking some mixed reviews and eager criticism in light of the recent graduate market and changes to higher education funding moving forward.
With a total of 202 participants to the survey this year, the first stat to be announced was positive: 21507 vacancies listed for the 2010-2011 period. Not a bad figure considering the scaremongering that’s been apparent in the media, leading people to believe that there are ‘no jobs out there’.
All sectors demonstrated an increase in number of vacancies when compared to last year, with Consulting coming in at a massive 149.3% rise, Retail 76.6% and Insurance 53%. Slightly lower in the rankings, surprisingly, was the Accounting and professional services sector which came in at a 14% increase. This did nothing to effect the sector’s stake in the overall percentage of vacancies however, Accounting was still leading the way with 20.6% of the total vacancies listed, followed by retail at 12.7%.
Let’s talk money. After two whole years of almost no increase in the average graduate salary, at last there is some movement in line with our slowly improving economy. The average salary is up 2% on last year from £25000 to £25500. Again, accounting leads the way with the largest increase percentage of 7.1%, with banking and financial services at 1.7% and no change in the retail sector.
Average sector salaries are no surprise this year with Law offering the most generous amount of £37,000, closely followed by Investment Banking at £36,500 and other industries staying in the mid to high £20,000’s. There was strong discussion around salaries and how they may look to change in light of the new higher education funding. With tuition fees soaring to a maximum of £9,000 a year and graduates consequently leaving university with a largely increased student debt, it is predicted that the demand for higher salaries in order to pay off these debts will call for employers to revise the amount they offer their graduates.
The application and selection section to the survey results was what the media really homed in. There was a huge increase in number of applications per vacancy this year – totalling 83.3 on average. This has almost doubled since 2008-2009 where the average number was 48.8, and is still a large increase on last year which was 68.8.
So why the huge increase? Are there really no jobs and too many graduates? No, the panel decided. The rise in applications per vacancy is, in their opinion, down to the fact that graduates have been ‘blanket applying’ this year to ensure they secure a role post graduation.
Despite this sharp rise in applications, the great news is that quality hasn’t been compromised. 57.4% of respondents agreed that the quality this year matched that of last year.
Predictably, there are still specific sectors leading the way with number of applications and it is far from equal across the board. Investment banking heads up the table with a huge 232.5 applications per vacancy, followed by Energy at 187.8, FMCG at 137.5 and trailing behind was Consulting at 31.3.
A promising number with regards to internships and placements – 95.8% of organisations paid their interns last year, which was up from the year before at 84%. It was noted that internships are increasingly becoming a reliable pipeline for graduate sourcing with 63% of firms offering an internship programme and, of this, 32% will convert to permanent graduate places. It’s thought that this is likely to increase next year as organisations continue to bring in interns.
Overall then, a truly positive looking set of results that suggest that things are on the up for the graduate market. As Carl Gilliard, Cheif Exec of the AGR put it – “I am cautiously optimistic about [the survey’s] findings, which provide a welcome indication that the graduate recruitment market is beginning to overcome the impact of the recession.”
Elsie Rutterford is a consultant on the FreshMinds Talent Graduate Team
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