In times of economic hardship, companies meticulously review their policies and procedures, looking for cost cutting opportunities. Many organisations choose to cut back or eliminate their graduate recruitment plan, which, on the surface, offers a money saving opportunity that produces immediate, short-term results. While investing in recruitment in uncertain times may seem counter intuitive, employers who abandon their graduate recruitment programmes run the risk of having an insufficient number of candidates in their pipeline to prosper when the economy improves. Evidence of this can be seen in previous economic downturns when accounting firms cut their graduate intake by up to 50%. When the economy eventually improved the result was a worldwide shortage of qualified accountants and a “war for talent” arose as companies fought to secure recruits from a reduced pool of talent.
Recessions are cyclical, there will be an upturn, and those companies that have recruited and retained stellar employees will be in a much better position to take advantage of an economic upswing. According to Gerwyn Davies, policy adviser at the Chartered Institute of Personnel Development: “Those firms that have abandoned their graduate recruitment programmes are less well placed to prosper when the economy does get back on an even keel.”
Maintaining graduate recruitment policies is important for a number of reasons; firstly as mentioned above, they provide vital future talent pipelines. Secondly, terminating graduate recruitment programmes entirely, or even suspending them for a year or two, can send out a negative message that is detrimental to the employer’s brand and the graduate job market as a whole. In the past, organisations that chose to go this route have discovered that when they re-entered the graduate market, they had to re-establish their employer brand to their target audience, which invariably is a costly undertaking. On the flipside, maintaining recruitment levels sends out a strong, positive message to graduates, your existing employees and your competitors. Thirdly, notwithstanding the fact that graduates do require a significant amount of investment in terms of both time and money, they provide new ideas and a fresh approach which may prove invaluable. Managing graduate recruitment ensures that companies have the right people in place to offer the best services to clients and to take the firm forward in the future.
Other considerations for maintaining a graduate recruitment programme include the availability of talented graduates. For years, graduate recruiters had to fight amongst themselves, launching expensive marketing campaigns to attract the most talented and educated elite. Today, the number of graduates available has significantly increased. In the 1996 – 1997 academic year, there were 1.75 million UK students in higher education institutions, but by 2007 – 08, this number had increased to 2.3 million. There are also greater numbers of graduates from prior years who are still applying for graduate schemes. Coupled with this increase in supply, vacancies have been reduced by a quarter. As the term “war for talent” becomes a quickly forgotten phrase, graduates are now willing to search further afield for employment opportunities, accepting lower salaries, reduced benefits and positions within smaller companies. As there are fewer graduate recruiters on campus, there is a larger pool of high calibre candidates for companies to choose from.
All of this is having a direct impact on recruiters. PricewaterhouseCoopers in the UK is one of that country’s largest private sector recruiters of graduates and one of the few to maintain recruitment at last year’s levels. Richard Irvine, a Senior Manager at the Recruitment Centre of Expertise at PWC advises that they have “learnt the lessons from past recessions”. He states, “Sometimes graduate recruitment is seen as the easiest thing to turn off, and considered better than releasing existing staff. But for us it’s a no brainer – we’re recruiting for recovery.”
For those companies that have decided to cut their budget for graduate programmes there are other options available such as unpaid internships. Unpaid internships are becoming more popular in the current economic climate. The benefits include showing a company’s commitment and helping young graduates gain experience and develop employability skills. John McGurk, CIPD Adviser says the issue is clear cut, “Employers who complain about students’ skills have a responsibility to offer students opportunities to learn them. Internships are the key way to do this.”
Organisations have a responsibility to look at talent throughout their entire business, right from their roots through to the top of the tree. Having a positive attitude towards young people coming in at the roots is part of growing a long-term sustainable business.
When the war for talent re-emerges in the future, it will be the current actions taken by your business that ensures you have the necessary talent available to benefit from the upturn. Allocating funds for graduate recruitment now will produce greater growth opportunities for your company in the long term.