Graduate recruitment suffered the biggest drop this year since the 2008 financial crash as employers cut back on hiring workers to cope with the Covid-19 pandemic.
The latest survey by the Institute of Student Employers (ISE) found that the number of graduate jobs declined by 12% and that the majority of employers anticipated a further decline next year.
Employers in the retail and consumer goods sectors made the biggest cuts, slashing 45% of graduate jobs as the first coronavirus lockdown hit business income and clouded the outlook for employment.
The ISE, which surveyed mostly large employers, said the weakening picture also affected the number of internships offered to graduates and spelled a tough time ahead for many of Britain’s best-qualified young people.
Employers reported a 29% decrease in internships and a 25% decrease in placements in 2019-20 with further falls expected next year.
Stephen Isherwood, the chief executive of the ISE, said the decline in graduate jobs, while falling short of the 2009 recession when employers cut 25% of graduate posts, should concern ministers.
“Employers have had to make significant adjustments. As a result, graduate jobs do not appear to be collapsing and school and college leaver recruitment is holding up, but the decline in internships and placements is more worrying. Around half of placement students get rehired, so diminishing these roles damages the talent pipeline,” he said.
Falls across many parts of the private sector were only partially offset by a 4% average increase across the charitable and public sectors, where many organisations were forced to increase staffing levels to cope with the coronavirus pandemic.
IT and engineering businesses also kept graduate jobs open, but found them difficult to fill, with 42% of employers saying they struggled to recruit staff in software programming and development while 35% struggled to recruit engineers.
A small rise in the recruitment of school and college leavers also showed the employment picture for young people was “not a simple replay of 10 years ago”, said Isherwood.
The typical firm received 60 applications for every graduate vacancy, the report found, and 39 applications for every school and college leaver position that they had.
The typical median graduate salary offered by respondents was £29,667 while the typical school or college leaver salary was more than £10,000 lower at £18,450.