Long reads

What’s the point of graduate recruitment?

25 Jan 2017 By Emily Burt

Why the ‘monoculture’ of the milkround has had its day – and how employers are rethinking their models before the apprenticeship levy forces their hands

If you’re selective about the statistics, there has never been a better time to be a student in the UK. A record 420,000 individuals were accepted by UK universities and colleges in 2016 – up 3 per cent on the previous year. And if you get the results, and a bit of luck, the rewards are plentiful: even budget supermarket Aldi offers a starting graduate salary of £42,000, while a 2016 survey of one million vacancies by jobs website Adzuna found graduates were likely to earn £12,000 a year more than non-degree educated jobseekers, amounting to a pay gap of more than £500,000 over the course of an average working life.

However, you don’t need to have turned up hungover for a lecture recently to know the reality isn’t quite so rosy. The graduate jobs market shrank by 8 per cent during 2016, according to data from the Association of Graduate Recruiters, while the Higher Education Statistics Agency reported that, six months out of university, more than 50,000 heavily indebted recent graduates were working in non-graduate roles such as lollipop ladies, factory workers and hospital porters in 2016.

Although there are, on average, 3.98 applicants for each graduate post in the UK – rising to more than 35 per role in London and the south east – the Association of Graduate Recruiters (AGR) found that 52 per cent of employers did not fill all their graduate vacancies last year, as many candidates reneged on their offers at the last minute in favour of more attractive jobs.

In the face of such imbalances, and an increasingly complex UK labour market, too many recruiters have failed to fundamentally shift their models. Even if they embrace social media or innovate in their marketing, a huge number remain wedded to the traditional graduate milkround, which began life in the 1960s and has changed little since. With a huge oversupply of candidates, and a growing realisation that non-graduate routes into employment are far from a second-class option, many are questioning whether the nature (or even the entire existence) of a graduate recruitment model needs to be rethought.

The milkround is good for selecting the most academically talented individuals from the most prestigious universities. But that is a long way from the reality of what organisations require. In 2014, a report from consultancy firm CEB said graduates were trapped in a “vicious circle”, with employers repeatedly overlooking the most suitable talent.

“There’s clearly something missing in the recruitment process,” says Eugene Burke, talent manager and analytics adviser at CEB and the report’s co-author. “Employers are still investing in graduates, and there’s no issue on the supply side – so part of the problem may well be the disconnect between recruitment as an activity, and the actual employment of a graduate.”

An October 2016 CIPD report, Alternative pathways into the labour market, found that UK graduates continue to report some of the highest levels of overqualification in Europe; nearly one-third (30 per cent) of all job roles that didn’t previously have degree-level requirements are now held by graduates. Comparative studies in the US suggest the figure there is 44 per cent, with the end result that applicants for a job as a ‘sandwich artist’ at Subway are told a college degree is “preferred”.

“Over the last 20-30 years there has been a rapid increase in the number of people graduating from university, and a growing proportion are now ending up in non-graduate roles that previously would have been filled by people with qualifications below graduate level,” says Elizabeth Crowley, skills policy adviser at the CIPD. “There is a degree monoculture in the UK, with a university-level qualification acting as the only established route into employment for young people trying to get a good start in the labour market.”

Smart organisations are moving away from targeting restricted talent pools – often students at Russell Group institutions, an elite of just 24 universities, with at least a 2:1 classification – and turning their attention not only to the top-performers-in-waiting at the other 126 UK universities, but also to school leavers and the hidden talent already lurking in the labour market.

Scrapping the degree requirement has been a popular first step. Publisher Penguin Random House removed the ‘degree filter’ from its hiring process at the beginning of 2016 – a strategy that applies to all new jobs it advertises. Finance and professional services firms Barclays, EY and PwC have also followed suit and scrapped the minimum requirement of a 2:1 degree.

“We removed A-level results and the UCAS tariff from our process because there’s a big pool of people who are academically disadvantaged at school, but go on to shine at university,” says Richard Irwin, head of student recruitment at PwC. “Employers have a responsibility to level the playing field at a much earlier stage and allow people to compete on their merits, contemporaneously at the point of who they are today.”

Ditching the milkround in favour of alternative techniques for reaching applicants also helps small organisations punch above their weight in the quest for talent, says Irwin. “Most employers can’t afford to do milkround presentations at 120 universities. We can extend our reach if we do things differently, such as conducting recruitment sessions onsite, providing employability training and offering help with interview and assessment techniques to anyone who wants to access them.”

Another popular tactic is ‘blind CV’ recruitment – one that many organisations are turning to in a bid to improve the gender, ethnic and social diversity of their workforces. The BBC trialled this technique last year, replacing conventional interviews with a ‘talent show’ format. “We scrapped the use of CVs and set all candidates a challenge instead, to prove they have the ‘deal breaker’ skills for the job they’re applying for,” says BBC diversity and inclusion manager Toby Mildon.

“Managers examine the quality of work supplied by the candidate without knowing anything else about them, and only when they deem a candidate’s work worthy of an interview do we reveal their identity. We have seen a dramatic increase in the diversity of candidates shortlisted for interview since piloting this system.”

Advertising firm J Walter Thompson (JWT) has brought the two ideas together, introducing not only CV-blind recruitment but also scrapping the degree requirement in an effort to end its reliance on university leavers as the default source of talent. “We’re looking beyond graduate hiring to the wider talent available,” says JWT’s co-director of talent, Kate Bruges. “This includes people who might have graduated years ago and worked in another area but are seeking a change, or school leavers who have great specialisations in areas like coding and want to get straight to work.”

The revamped recruitment process asks candidates to answer five questions alongside their CV submission; these answers alone help the recruiting panel narrow down an annual pool of applications from around 800 to nearer 200. CVs are only referred to as a last resort if the final decision between candidates is close.

“It’s harder work to get through that initial sifting process without the shorthand of the CV, but I think it’s worth doing,” Bruges says. “We’re not saying that we don’t want graduates – but we want to work hard at that initial stage to put everyone on a level playing field, in the hope that we will end up with a more diverse group of applicants by the interview stage.”

Recruitment company Brightsparks also disregards candidates’ CVs and qualifications until late on in the hiring process, says its CEO, James Herbert, preferring to focus on interviews and role-playing scenarios. “What people study at university is far less relevant than their transferable skills, their values, how they behave and work with others, their punctuality, and their management and communication skills.”

While so far only a small number of forward-thinking employers have fundamentally changed how they recruit younger workers, the apprenticeship levy – which comes into effect in April – may force the hand of others. Because it will require a financial commitment towards the recruitment of apprentices, organisations that have neglected this area will have to justify their future hiring decisions in the context of the levy, and may find senior leaders begin to question the underlying logic of graduate recruitment.

“The levy should force more employers to think about broader strategies for graduates, school leavers and apprentices,” says Stephen Isherwood, CEO of the AGR, which is proposing changing its name to the Institute of Student Employers to reflect these realities.

“The first thing employers need to think about is how these different routes might look, and they also have to consider the fact that there are 6,000 schools in the UK, as opposed to 150 universities, so they will have to use different mechanisms to reach these schools to promote the apprenticeship route. That is where employers are feeling the most pain at the moment.”

While the levy has the potential to open access to employment up to a different talent pool, some are worried that organisations will attempt to ‘game’ the system and recruit the same type of candidate they previously targeted through graduate recruitment routes.

“There are employers out there using graduate apprenticeships to shape the graduate recruitment programme and support bright A-level students in obtaining a degree while working, which is excellent practice,” Crowley says. “But we are really concerned that in an attempt to recoup the apprenticeship levy money, employers may seek to ‘cannibalise’ existing schemes and professional development programmes, and rebadge them as apprenticeships – which could severely devalue the apprenticeship brand as a whole.”

Alternative routes into the labour market – and alternative ways of sourcing talent – are unlikely to grow in popularity without a concerted publicity effort from employers. “People think our recruitment agenda is far less diverse than it is in reality, which is a real problem for us because it leaves young people who could be right for the company deselecting themselves from the process,” says Irwin. Less than 10 per cent of PwC’s 1,500 graduate applications each year are from Oxbridge, he says, and around 60 per cent studied at Russell Group institutions.

Parents, too, might take some convincing about the value of vocational courses that prepare young people for careers such as accountancy, nursing and policing just as well (or, some might say, better) than a degree. “Until we reach a point where a middle-class parent whose child might have gone to Oxford or Cambridge decides it’s just as good for that young person to study a degree-level apprenticeship, we won’t have parity of access across employment routes,” says Crowley. “Hopefully, we will start to see a mix of pathways in the future – but given the longstanding kudos of a degree in the UK, it could be some time before we see any real change.”

Ultimately, it will be employers that make change a reality – and that will mean taking a long, hard look at the structure of their recruitment teams and the mindsets of their recruiters. “There will always be a huge value in going to university,” says Irwin. “But I think if we could get back to a point where no one had to do a degree to get a job that didn’t require it, then we would be in a really good place.”

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