Graduate recruitment process reaching breaking point or has it already broken?

I saw a couple of things this week in close succession on the graduate employment market. On Wednesday I attended a webinar with the Institute of Student Employers (image courtesy of their research); last night I watched Newsnight who did a piece on it.

On Newsnight I listened to four seemingly bright graduates, all either out of work, or in a lower paying field of work unrelated to their degree. James Reed, CEO and Chairman of Reed recruitment was also on the show and talked about the sharp decline in graduate roles on his platform, citing a decline from roughly 180,000 4 years ago down to around 50,000 today. This kind of decline is reported by other recruiters and job boards. 

James puts this down to 2 main things:-

1. The automation of roles by Ai - the well-known bottom of the ladder conundrum, where many entry level activities which would normally go to new starters, can be automated with Ai.
2. Increasing employer costs, specifically employer NI causing employers to slow down hiring in general to protect balance sheets, especially smaller firms.

It was also noted that some jobs which would normally go to graduates were going to more experienced applicants and there was increasing competition with the gap in supply and demand between graduates and graduate vacancies 

Aside from the loss of confidence from 100s of rejections, there was a sense of frustration with the complete lack of responses from many applications. One panellist mentioned she only got responses from around half. And the increasing use of Ai is pushing this volume higher. This is in stark contrast to the ISE survey data, where 98% of employers claim to acknowledge unsuccessful applicants.

One panellist mentioned that she'd used Ai to apply for a role because the job application was so long and onerous, she did not have the will to do it herself, given her low expectations on a successful outcome, or even an acknowledgment. It was also noted that some applicants use tricks like, putting key words at the bottom of the CV in hidden ink so they are picked up by Ai screening tools.

The ISE webinar was timely as I had the data to quantify some of the statements made on Newsnight. However, there were two other main additional areas of conflict, other than the stats around acknowledging unsuccessful applications.  

1. According to the employer's surveyed in the ISE graduate recruitment survey, employers claim that Ai is simply changing what graduates do, not whether they are hired, with no expectation of significant changes to entry level tasks in the next 3 years.  
2. The ISE reports a 4% increase in graduate vacancies, driven by a few large employers expanding their programmes. This is following an 8% decrease last year but still does not explain what we're hearing.

These are samples and so both sources are not giving us the whole picture - it could be a case of employer's preferring to recruit in-house rather than on job boards, but could also be the case that some jobs are not being advertised at all, given the burden of having to sift through so many applicants.

And this is where we have common consent - the volume of applicants and the pain it is causing - 60% of employer's say managing high applicant volumes is a concern with 137 being the AVERAGE number of applicants per graduate vacancy (that figure rises to 172 in London). I believe we are looking at volumes 3 to 4 x higher than 2 decades ago and at a level which is quickly becoming unsustainable and seems to be the biggest problem that needs fixing, which is certainly a common view on Newsnight. 

Only 8% of the employers surveyed claim to use Ai tools as a solution to screening high volumes of applicants, so from this data, it might appear that in this arms race, the first shots were fired by the applicants. But then, in the context of an increasing applicant to job ratio, then long-winded clunky repetitive processes (I've seen many of these first hand) that desperately need modernising are going to put applicants off or create a situation where short cuts are taken and applicants become homogenised by Ai.

Perhaps that is one of the most important things to fix then, the hiring process, with 77% of employers say they are re-designing the process due to candidate use of Ai. Use of Ai in the recruitment process remains low at 16% but is forecast to increase to 29% in the next year, so an arms race definitely is a thing and using Ai as a means to fix a hiring process is not a sustainable solution.

Another thing, I noted from the ISE webinar was the lowering of requirements for graduate job, with fewer now demanding a 2.1 degree, with more focus on human skills such as critical thinking, judgement and communication. Ai literacy, unsurprisingly, was also observed as another skill which will become increasingly important in the workplace. This is paradoxical since the use of Ai is discouraged or forbidden in many education settings. So how DO we expect students to be ready if they are not allowed to learn on Ai, or is it expected that they will intrinsically gravitate towards it for personal use and become competent?

This, I believe will be the case for the next generation entering work, Gen Alpha, but not necessarily so for Gen Z - digital natives they are but Ai natives they aren’t.

So there are a couple of important question to take from all this:

1. Based on the data we saw from the ISE survey, is the ‘bottom rung of the ladder’ issue something that has not yet manifested and is set to become an issue and worsen the gap between supply and demand for graduate jobs or will  employers continue to find meaningful work for graduates?
2. How do we resolve the recruitment process, make it easier for both parties and streamline the number of applicants?

I reckon there’s a pot of gold waiting for whoever can figure this one out.

If you're an employer, graduate, university careers professional or recruiter I'd love to hear your experience and views on this