The AGR Graduate Recruitment Survey 2015

The AGR Graduate Recruitment Survey 2015 Winter Review Produced for AGR by

The AGR Graduate Recruitment Survey 2015 Winter Review

Association of Graduate Recruiters 6 Bath Place Rivington Street London EC2A 3JE Survey produced for AGR by CFE Phoenix Yard Upper Brown Street Leicester LE1 5TE For more information please contact Hayley Lamb on 0116 229 3300 or hayley.lamb@cfe.org.uk Website: www.cfe.org.uk All information contained in this report is believed to be correct and unbiased, but the publisher does not accept responsibility for any loss arising from decisions made upon this information. CFE and the Association of Graduate Recruiters All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without prior permission of the publisher. 4

Contents Foreword... 6 Executive Summary... 7 Introduction... 10 Graduate vacancies... 12 Graduate vacancies in 2013-2014 and 2014-2015... 12 Expected changes in vacancies by sector... 14 Vacancies in 2013-2014 by business sector... 15 Vacancies in 2013-2014 by region... 16 Vacancies in 2013-2014 by career area... 17 Applications and offers... 19 Applications per graduate vacancy... 19 Unfilled vacancies... 20 Turn-down rates of employer offers... 22 Share of hires who had previously worked for their employer... 23 Time to offer... 24 Graduate recruitment marketing... 26 Total marketing spend in 2013-2014 and 2014-2015... 26 Marketing spend per vacancy... 27 Mean spend on key activities in 2013-2014 and 2014-2015... 29 Relationships with universities for marketing graduate vacancies... 31 School leaver opportunities... 34 School leaver opportunities offered in 2013-2014 and 2014-2015... 34 Number of school leaver opportunities in 2013-2014 and 2014-2015... 36 School leaver opportunities in 2013-2014 by business sector... 37 Marketing of school leaver opportunities... 37 Appendix... 40 Changes to 2015 Winter Review... 40 Methodology... 41 Profile of respondents... 41 5

Foreword Employer members continue to expand their investment in graduates and early talent. Our industry is recruiting more graduates than ever before with vacancies set to rise this year by a further 11.9%. But this increase brings problems: almost half of our AGR employer members had challenges filling vacancies in 2014, with 1,422 vacancies reported as unfilled. Difficulties in attracting the right talent with the right mix of skills in the right location are on the increase. Not since 2008 has the problem been so pronounced. Increasingly our employer members are taking a holistic approach to Emerging Talent. Over 75% our employers now actively engaged in the schools market. School leaver opportunities appear to be complementing graduate programmes rather than replacing them but we need to continue our efforts to understand and influence this market. The graduate labour market is too often treated as a single entity rather than a series of individual sectors with their own distinct supply and demand forces. You will notice that in this year s report we have made it easier for you to benchmark your recruitment activity within your sector as well as more generally. You will notice that sectors differ in their proportion of unfilled vacancies, their turn-down rates of offers, their presence on campus, their marketing spend per vacancy and more. Beneath the headline findings, you will find a wealth of insight to help you develop your graduate recruitment strategies. We will continue to invest in our research and reporting capabilities. Key results will again be made available through an online data dashboard to enable you to explore the data in more depth. Please do continue to engage with AGR, let us know what you need from your organisation and enjoy the report. Stephen Isherwood Chief Executive, AGR 6

Executive Summary Graduate vacancies AGR employers are predicting an increase in graduate vacancies of 11.9% from 2013-2014 to 2014-2015. This follows an actual increase of 4.3% in the previous recruitment season. The top four sectors expecting to see an increase in vacancies are: IT/Telecommunications sector (26.9%), public sector (23.0%), construction companies or consultancies (22.1%) and engineering (19.7%). Only three sectors are predicting small decreases: energy, water or utility companies (-0.3%), FMCG companies (-5.0%) and consulting or business services firms (-5.3%). In 2013-2014 accountancy or professional services firms accounted for 22.2% of all graduate vacancies, followed by the public sector (13.3%), engineering or industrial companies (12.7%) and retail (10.4%). London continues to attract the highest number of vacancies (45.0%) across AGR members, with the South East attracting a further 8.9%. Applications and Offers 1422 vacancies were unfilled in 2013-14, with nearly half (44.8%) of all AGR employers with unfilled vacancies. The average number of unfilled vacancies across all employers was 5.4% per employer. On average, 14.4% of offers to graduates were turned down. Only two employers had turn-down rates over 20%: IT/Telecommunications (22.0%) and law firms (20.6%). Across AGR members, on average, 26.5% of graduate positions were filled by people who had previously worked for the same employer through an internship or placement programme. The average time to offer, that is the time that elapses between an applicant applying and receiving an offer, was 13 weeks (although this figure varies significantly by sector and hiring volumes). Graduate recruitment marketing Employers are increasing their marketing spend. The mean marketing spend per AGR member was 94,750 in 2013-2014. This figure is expected to rise to 103,500 in the 2014-2015 recruitment season. The marketing budget per vacancy in the 2013-2014 recruitment season was 2,007 amongst AGR members. This is expected to increase in 2014-2015 to 2,069. AGR members allocated a marketing budget to a wide range of activities in 2013-2014 and plan to continue to allocate their budgets to a similar range of activities in 2014-2015. On campus activities (93.8%) proved to be the most popular activity, closely followed by general online activities (91.0%) and print (89.9%). However, online promotions attract the highest mean spend at 26,000, followed by on campus activities ( 21,250) and print ( 14,250). Of particular note is the increasing use of social media marketing with 52.5% of AGR members planning to spend money in this area in 2014-15, up from 44.4% in the 2013-14 recruitment season. 7

Very few (5.2%) AGR employers did not visit or work with UK universities to market their graduate vacancies in 2013-2014. On average, AGR members worked with 16.9 universities. School leaver opportunities Over two-thirds (68.2%) of AGR members offered school leaver opportunities in 2013-2014; an increase from 54.7% in 2012-2013 (as reported in the Winter 2014 Review). AGR employers are predicting a further increase in this activity, with almost three-quarters (72.7%) of employers planning to offer opportunities in 2014-2015. Apprenticeships continue to be the most popular type of opportunity on offer for school leavers. Almost half of AGR employers (47.0%) offered Apprenticeships in 2013-14, with the proportion predicted to rise to 51.5% in the next year. A total of 16,906 school leaver opportunities were offered by 104 AGR employers in 2013-2014. One-third (32.9%) of AGR employers offering school leaver opportunities reported that they had established a relationship with 1-10 schools in order to promote their opportunities and just over a quarter (26.0%) had established relationships with 11-50 schools. AGR members were asked to state the total budget allocated to school leaver attraction activities during the 2013-2014 recruitment season; almost half of AGR members (46.2%) did not allocate any budget to school leaver attraction activities, just over a fifth (20.4%) spent up to 10,000 and 12.9% spent 10,001 to 25,000. 8

Introduction 9

Introduction Welcome to the AGR Graduate Recruitment Survey 2015 Winter Review. The AGR Graduate Recruitment Survey is the definitive study of AGR employer members and their recruitment practices, providing up-to-the-minute insights into conditions and trends in the graduate recruitment market. It provides regular benchmarking of key market indicators including vacancy levels. As the leading survey of graduate recruitment practices, spanning the longest continuous series of recruitment seasons, the survey is the primary source of information on graduate recruitment levels, methods and practices amongst AGR members. This means that it is an invaluable tool for assessing, organising and optimising graduate recruitment and development activities. The Graduate Recruitment Survey is conducted twice a year. Undertaken on behalf of AGR by CFE Research, the Winter Review explores AGR employers in relation to: Graduate vacancy levels for the 2013-2014 recruitment season by business sector and region Predicted vacancy levels for the 2014-2015 recruitment season Graduate recruitment and marketing practices The use of school leaver programmes The findings are presented in three chapters structured to reflect the areas outlined above. Chapter 1 focuses on vacancy levels while Chapter 2 examines the number of applications received per vacancy and offers to graduates, Chapter 3 looks at AGR employers spend on activities to attract graduate talent. Chapter 4 explores the prevalence of school leaver programmes amongst graduate recruiters. 10

Chapter 1 Graduate vacancies 11

Graduate vacancies This chapter looks at actual year-end vacancy levels for the 2013-2014 recruitment season and presents AGR members predictions or expectations for the current recruitment season (2014-2015). Graduate vacancies in 2013-2014 and 2014-2015 Overall, findings from the Winter 2015 review represent continued optimism amongst employers, with an increasingly healthy graduate recruitment market. Collectively, employers are estimated to have offered a total of 21,682 vacancies during the 2013-2014 recruitment season. The year-end figures for 2013-2014 illustrate that the number of graduate vacancies increased by 4.3% (amongst employers who provided both vacancy figures) 1, with a further sharp rise expected in 2014-2015 of 11.9% (Figure 1.1). 2000 2001 14.7% 14.6% 2002-6.5% 2003-3.4% 2004 15.5% 2005 2006 5.1% 5.1% 2007 12.7% 2008 0.6% 2009-8.9% 2010 8.9% 2011 1.7% 2012-8.2% 2013 2014 4.3% 4.3% 2015 (predicted) 11.9% Figure 1.1: Graduate vacancy changes at AGR employers 2000 to 2015 (predicted) Percentage increase or decrease on previous year (varying bases) 1 The percentage change is calculated for employers who responded to both the Winter 2014 and the Winter 2015 Review to ensure robustness of the data. 12

The trend in graduate vacancies amongst AGR members continues to follow that of the UK economy, which has enjoyed two years of economic growth, with GDP having now surpassed its pre-recession levels. Further strong growth is predicted in 2015. The predicted increase in vacancy levels amongst AGR members is matched by a corresponding rise in the mean number of vacancies offered per employer. After observing very little change in the mean number of vacancies per AGR employer between 2010 and 2012, the last two years have seen steady growth in the mean number of vacancies, with a particularly large rise occurring in 2014. Furthermore, AGR members expect there to be even more substantial increases in the mean number of vacancies next year (Figure 1.2). 2010 2011 2012 2013 2014 99.4 99.6 98.2 103.8 107.8 2015 (predicted) 121.2 Figure 1.2: Mean number of vacancies per AGR employer 2009 to 2015 (predicted) Varying bases Part of this rise can be attributed to the increasing investment of the largest employers into graduate recruitment. However, even when the largest employers are discounted (those recruiting over 500 graduates per year), the mean number of vacancies continues to rise with 71.9 vacancies on average in 2014 and 79.5 predicted in 2015. 13

Expected changes in vacancies by sector Table 1.3 below presents the expected percentage change in vacancies from 2013-2014 to 2014-2015 by sector 2. Table 1.3: Percentage change in vacancies from 2013-2014 to 2014-2015 by sector (predicted) IT/Telecommunications 26.9% Public sector 23.0% Construction company or consultancy 22.1% Engineering or industrial company 19.7% Investment bank or fund managers 12.3% Banking or financial services 10.3% Accountancy or professional services firm 6.8% Law firm 3.3% Retail 0.7% Energy, water or utility company -0.3% FMCG company -5.0% Consulting or business services firm -5.3% The majority of sectors expect to increase their vacancies, with only three predicting a fall in vacancy levels in the 2014-2015 recruitment season. When comparing these figures to those reported in the Winter 2014 review, we find that the IT/Telecommunications sector (26.9%) and public sector (23.0%) continue to expect strong growth in vacancy levels. In the Winter 2014 review, investment bank or fund managers expected a decline in vacancy levels, whereas this year, this sector believes that vacancy levels will rise by 12.3%. In contrast to the previous year where a sharp rise was predicted, the energy, water and utility sector state that they anticipate vacancy levels to fall slightly in 2014-2015. 2 The following sectors are not reported in our analysis as the small number of respondents within the sector may jeopardise their anonymity: Oil companies, chemical or pharmaceutical companies, insurance and transport or logistics companies. 14

Vacancies in 2013-2014 by business sector Table 1.4 outlines the distribution of vacancies by sector 3 in 2013-2014 amongst AGR employers. Table 1.4: Vacancies at AGR employers by sector in 2013-2014 % of 21,682 vacancies Accountancy or professional services firm 22.2% Public sector 13.3% Engineering or industrial company 12.7% Retail 10.4% Banking or financial services 9.7% IT/Telecommunications 8.3% Law firm 5.9% Investment bank or fund managers 4.3% Consulting or business services firm 3.2% Construction company or consultancy 1.8% FMCG company 1.4% Energy, water or utility company 1.3% Insurance company 0.5% Other 0.9% 3 The following sectors are not reported in our analysis as the small number of respondents within the sector may jeopardise their anonymity: Oil companies, chemical or pharmaceutical companies and transport or logistics companies. 15

Reflecting the previous two Winter surveys, the accountancy and professional services sector continues to provide around one-fifth of the total vacancies offered by AGR employers. Whilst the public sector (13.3%) and retail (10.4%) account for a similar proportion of vacancies as in 2012-2013, there has been a rise in the percentage of the total number of vacancies offered by the banking and financial services (9.7%), as well as the engineering/industrial sectors (12.7%). Vacancies in 2013-2014 by region Whilst the largest proportion of graduate vacancies for AGR members are based within the London area (45.0%), the proportion has declined from the previous year, when the capital provided 50.1% of total vacancies. The distribution of vacancies otherwise continues to follow a similar trend to previous years. Wales (1.9%) and Northern Ireland (1.2%) offer the smallest proportion of total vacancies, with just 5.6% of graduate vacancies being offered outside the UK. Table 1.5: Vacancies at AGR employers by region in 2013-2014 % of 18,464 vacancies London 45.0% South East 8.9% West Midlands 6.7% North West 6.3% Scotland 5.9% South West 5.2% East Midlands 4.5% Yorkshire and Humberside 4.2% North East 2.6% East of England 2.1% Wales 1.9% Northern Ireland 1.2% Europe 1.7% The Americas 1.5% Asia 1.2% The Middle East 0.4% Rest of World 0.8% *The base appears as 18,464 instead of 21,682 because some responding organisations did not provide information about the regions where they recruit. Please note recruiters may be offering vacancies in more than one region simultaneously. 16

Vacancies in 2013-2014 by career area Accountancy (14.8%) was the main type of job vacancy offered by AGR employers, followed by IT (11.5%) and consulting (10.8%). Very few positions, however, were offered in the fields of research and development (0.9%), actuarial (0.9%), logistics (0.9%) and science (0.7%). Table 1.6: Vacancies at AGR employers by career area in 2013-2014 % of 18,784 vacancies Accountancy 14.8% IT 11.5% Consulting 10.8% General management 10.4% Legal Work 7.1% Financial management 5.2% Investment banking 4.1% Mechanical Engineering 3.4% Sales/customer management 3.4% Civil engineering 2.4% Electrical/electronic engineering 2.6% Human resources 1.8% Retail management 1.3% Marketing 1.2% Manufacturing engineering 1.1% Purchasing 1.1% Research and Development 0.9% Logistics 0.9% Actuarial 0.9% Science 0.7% Other 14.5% *The base appears as 18,784 instead of 21,682 because some responding organisations did not provide information about the regions where they recruit. Please note recruiters may be offering vacancies in more than one region simultaneously. 17

Chapter 2 Applications and offers 18

Applications and offers This chapter of the report looks at the number of applications AGR members received per vacancy, examines unfilled vacancies and the proportion of graduates who have previously worked for their employer before being hired as graduates. It also provides data on turn-down rates and the average time to offer. Applications per graduate vacancy AGR members were asked how many completed applications they received in total in 2013-2014. On average across AGR members, 74.5 applications were received for every graduate recruited in 2013-2014 4. This indicates that on the whole application volumes appear to be decreasing as this is lower than the number of applications received (midway through the recruitment season) per vacancy in 2012-2013 (85.3 reported in the Summer 2013 Review).On average, those employers who offered a smaller number of vacancies received a higher number of applications per vacancy. All employers 74.5 1-25 graduates 96.7 26-50 graduates 75.2 51-75 graduates 76-100 graduates 101-250 graduates 251-500 graduates 58.4 52.1 53.9 46.2 More than 500 graduates 28.3 Figure2.1: Average number of applications per vacancy received by AGR employers in 2013-2014 by intake size Varying bases Figure 2.2 indicates the average number of applications per vacancy by sector 5. The sector with the largest number of applications per vacancy is FMCG at 146.4, followed banking or financial services at 107.3. 4 Analysis has been undertaken on those who provided us with exact vacancy and application figures only. 5 The following sectors are not reported in our analysis as the small number of respondents may jeopardise their anonymity: oil companies, chemical or pharmaceutical companies, transport or logistics companies and insurance companies. 19

All employers 74.5 FMCG company 146.4 Banking or financial services Investment bank or fund managers Energy, water or utility company IT/Telecommunications 107.3 101.5 96.8 87.3 Retail Consulting or business services firm Law firm Engineering or industrial company Construction company or consultancy Public sector Accountancy or professional services firm 71.2 64.9 59.6 55.8 41.7 41.5 36.1 Other 149.8 Figure 2.2: Average number of applications per vacancy received by AGR employers in 2013-2014 by sector Varying bases Unfilled vacancies Despite an increase in the total vacancies available, and the number of applications still far exceeding the number of places, the challenge of filling graduate vacancies is widespread this year. 44.8% of employers almost half had one or more unfilled vacancies, while the average proportion of unfilled vacancies per employer at 5.4%. Employers with unfilled vacancies reported a total of 1,422 unfilled vacancies in 2013/14 compared with 19,282 positions filled in their respective companies. IT and telecommunications employers had the largest proportion of unfilled vacancies (11.8%), followed by energy, water or utility companies (11.1%). 20

All employers 5.4% IT/Telecommunications Energy, water or utility company 11.8% 11.1% Construction company or consultancy Consulting or business services firm 7.7% 7.3% Law firm Insurance company Accountancy or professional services firm Public sector Engineering or industrial company FMCG company Retail Banking or financial services Investment bank or fund managers Other 5.9% 5.9% 4.8% 3.9% 3.4% 2.8% 2.7% 1.4% 1.4% 3.7% Figure 2.3: Average proportion of unfilled vacancies by sector 2013-2014 Base = variable In-depth interviews were carried out with a range of AGR members In order to understand what could be contributing to vacancies remaining unfilled. A wide range of factors were quoted: An employer in the IT sector commented The required standard of technical graduates remains high, and as a result of increased competition, the standard of applicants has decreased on the whole within our organisation we cannot decrease the high standards that we require. Another employer, from the public sector, also linked the unfilled vacancies with the quality of applicants These [vacancies] were for candidates from disciplines that are notoriously difficult to recruit for. Whilst an employer from the engineering sector confirmed a complex mix of factors created their shortfall: a number of reasons including business complexity, the way we run our recruitment and selection process given the resource we have, and the large numbers to fill, changing business needs and market competition. 21

Turn-down rates of employer offers The average turn-down rate, defined as the proportion of graduates that did not accept a graduate position that was offered to them, was 14.4%. Fast moving consumer goods companies had the highest proportion of graduates accepting roles, with only 2.7% of offers being turned down. Consulting or business services firms (8.4%) and retail (10.0%) also reported turn-down rates of 10% or lower. IT and telecommunications firms (22.0%) and law firms (20.6%) reported the highest turn-down rates, both above 20%, hinting at more intense competition for candidates within their respective sectors. All employers 14.4% IT/Telecommunications Law firm 20.6% 22.0% Engineering or industrial company Energy, water or utility company Accountancy or professional services firm Public sector Construction company or consultancy Banking or financial services Retail Consulting or business services firm 16.9% 15.4% 13.4% 13.2% 12.6% 10.6% 10.0% 8.4% FMCG company 2.7% Other 19.7% Figure 2.4: Average acceptance rate (proportion of candidates that they offered places to that accepted) of AGR members by sector 2013-2014 Base = variable During the in-depth interviews, several employers commented that their turndown rates this year had been higher than expected. In terms of the reasons, one confirmed that they had an increase in offers that were declined by graduates quite late in the recruitment cycle while another mentioned a change in candidate behaviour: seems graduates are holding a couple of offers and deciding late in the cycle. 22

Share of hires who had previously worked for their employer Many graduates find work opportunities with employers that they ve worked with previously, for example through internships, gap years or placements. In total, 3,865 of the 16,953 graduates recruited during 2013-2014 (by employers who provided a response) filled a vacancy with an employer for whom they had previously worked. On average, 26.5% of vacancies were filled this way across all employers sampled. Two employers (out of 169) stated that they had filled all of their graduate vacancies with graduates who had worked with them previously. In contrast, 16.0% of employers who responded to this question did not recruit any graduates this way. There are also big differences between the sectors as shown below: All employers 26.5% Law firm 56.4% Consulting or business services firm FMCG company 38.0% 36.6% Banking or financial services Engineering or industrial company Accountancy or professional services firm Construction company or consultancy Insurance company Energy, water or utility company Retail IT/Telecommunications 23.9% 21.4% 20.9% 18.4% 18.1% 17.3% 16.0% 14.3% Public sector Other 5.7% 6.4% Figure 2.5: Average proportion of vacancies filled by graduates who have already worked for their organisation before (e.g. through internships or gap placements) 2013-2014 Base = variable 6 Law firms reported the largest proportion of vacancies filled by graduates who had worked for them previously (56.4%), followed by consulting and business services firms (38.0%) and fast moving consumer goods companies (36.6%). 6 The following sectors are not reported in our analysis as the small number of respondents may jeopardise their anonymity: oil companies, chemical or pharmaceutical companies, transport or logistics companies and Investment or fund managers. 23

Time to offer The average time to offer that is, the time between an applicant applying and receiving an offer - was 13 weeks. Just over a fifth of employers (20.9%) were able to make an offer within 5 weeks of applicants applying, compared to 7.5% of employers that required over 21 weeks to make an offer. All employers 13 Public sector Law firm Engineering or industrial company Banking or financial services 15 15 15 14 Construction company or consultancy 12 Retail Energy, water or utility company Accountancy or professional services firm 10 10 10 FMCG company 8 IT/Telecommunications 7 Consulting or business services firm 5 Other 16 Figure 2.6: Average time to offer (time between applicant applying and receiving an offer) by sector in 2013-2014 Base = 134 24

Chapter 3 Graduate recruitment marketing 25

Graduate recruitment marketing In this chapter we investigate AGR members graduate recruitment marketing practices. We describe their expenditure on activities aimed at attracting graduate talent in 2013-2014 and explore how this compares to AGR employers strategies for the 2014-2015 recruitment season. We finally go on to examine the total marketing spend per vacancy by sector and the number of graduates recruited. Total marketing spend in 2013-2014 and 2014-2015 In 2013-2014 AGR members spent just under 20.5 million on their graduate recruitment marketing activities 7. The mean 8 marketing spend per AGR member was 94,750 in 2013-2014, with this expected to rise to 103,500 in the 2014-2015 recruitment season 9. The mean marketing spend is higher amongst law firms. When law firms are excluded from the analysis the mean marketing spend decreases to 83,500 in 2013-2014 and 90,500 in 2014-2015. As expected, those organisations recruiting a higher number of graduates have a higher level of total spend on marketing. AGR members who recruited more than 500 graduates spent an average of 466,000 on marketing activities, compared just 48,750 amongst AGR employers who recruited 1-25 graduates. More than 500 graduates 466,000 503,000 251-500 graduates 101-250 graduates 76-100 graduates 51-75 graduates 26-50 graduates 1-25 graduates 196,500 241,750 173,500 165,500 135,750 102,500 98,000 97,250 87,000 97,000 48,750 58,000 2013/2014 2014/2015 (predicted) Figure 3.1: Mean (trimmed) total spend on graduate recruitment marketing by number of graduates recruited in 2013-2014 and 2014-2015(predicted) 2013 Base = 174, 2014 Base = 164 7 This figure is based on the 174 employers who were able to estimate their total marketing spend. 8 A trimmed mean at 5% was used to calculate these figures. This excludes 5% of responses in the sample (2.5% of cases from the lower end of the scale and 2.5% from the higher end of the scale) to prevent the mean being skewed by organisations with extremely high or low figures. This ensures that the mean more accurately reflects the majority of organisations in the sample. 9 This figure is based on the 174 employers who were able to estimate their total marketing spend in 2013-2014 and 164 in 2014-2015. 26

Marketing spend per vacancy The mean 10 marketing spend per vacancy across all AGR employers in 2013-2014 was 2,007 and this is expected to increase to 2,069 in 2014-2015. For the purposes of this report, this figure is calculated by dividing the total budget (actual for 2013-2014 and predicted for 2014-2015) for graduate marketing activities by the number of vacancies offered. Figure 3.2 shows how members spend per vacancy differs. Over one-quarter (28.7%) of AGR members spent between 1,001 and 2,500, compared with just 4.6% who spent over 10,000 per vacancy on marketing activity. No budget 4.0% 6.3% 4.3% Up to 500 19.0% 18.4% 21.6% 501-1,000 18.4% 16.7% 17.3% 1,001-2,500 25.9% 28.7% 27.2% 2,501-4,500 15.5% 13.2% 10.5% 4,501-10,000 More than 10,000 2.9% 4.6% 3.1% 14.4% 12.1% 16.0% 2012-2013 2013/2014 2014/2015 (predicted) Figure 3.2: Spend per vacancy on key graduate attraction activities in 2012-2013 (from Winter 2014 Survey), 2013-2014 and 2014-2015 (predicted) 2013 Base = 174, 2014 Base = 162 10 Trimmed mean 27

Figure 3.3 shows the economies of scale involved in marketing to graduates: average spend per vacancy decreases as the number of vacancies increases. The drop is significant: those employers recruiting between 1-25 graduates spent, on average, more than 3,000 on marketing activities per vacancy compared with an average of just 405 per vacancy in organisations that recruited over 500 graduates. 1-25 graduates 3,176 3,113 26-50 graduates 2,379 2,517 51-75 graduates 76-100 graduates 1,180 1,565 1,553 1,785 101-250 graduates 1,093 1,405 251-500 graduates More than 500 graduates 850 593 390 405 2012-2013 2013-2014 Figure 3.3: Trimmed mean spend per vacancy on key graduate attraction activities in 2012-2013 (from Winter 2014 Survey) and 2013-2014 by number of graduates recruited Base = variable There are also big differences in spending between the sectors. The three sectors which spent the most in 2013/14 were Law firms, IT & Telecommunications companies and Energy, water and utility companies, all spending an average of over 2,500 on marketing for every vacancy available. Law firms reported an average of 5,382 over double the amount of the second-highest sector although part of this difference can be attributed to much smaller graduate intakes than in the IT sector so not being able to benefit from the same economies of scale. This is further illustrated by the stark differences between law and accountancy. Accountancy firms exhibit a much lower spend per vacancy on marketing activities of 813. However, the accountancy and professional services sector accounts for just over one-fifth of total graduate vacancies amongst AGR members in 2013-2014, compared to the much lower proportion of 5.9% within the law sector. Because the spend per hire figures are correlated to vacancy levels, this will skew some data where vacancy numbers have increased at a faster rate than spending. Whilst overall spend may have increased the average per vacancy could decrease. 28

Law firm IT/Telecommunications Energy, water or utility company FMCG company Banking or financial services Engineering or industrial company Consulting or business services firm Investment bank or fund managers Retail Public sector Accountancy or professional services firm 2,583 2,676 2,059 2,622 2,703 2,331 2,254 1,839 1,681 1,458 1,464 1,406 2,453 943 1,367 893 1,049 833 635 813 4,400 5,382 2012-2013 2013-2014 Figure 3.4: Trimmed mean spend per vacancy on key graduate attraction activities in2012-2013 (from Winter 2014 Survey) and 2013-2014 by sector Base = variable Mean spend on key activities in 2013-2014 and 2014-2015 Figure 3.5 demonstrates the proportion of AGR members that allocated funds to marketing in 2013-2014 that are engaging in different types of graduate attraction activities. On campus activities (93.8%) proved to be the most popular activity, closely followed by online (91.0%) and print (89.9%). Whilst social media and student competitions were less likely to attract a budget by AGR members, their prominence is expected to rise in 2014-2015. On campus Other online Print 93.8% 95.4% 91.0% 93.7% 89.9% 89.8% Social Media Student competitions Other 44.4% 52.5% 35.9% 48.0% 77.5% 78.2% 2013/2014 2014/2015 (predicted) Figure 3.5: Proportion of employers who knew if they spent/planned to spend something on the above graduate attraction activities Base = variable 29

Social media marketing is increasingly complementing on campus activity. While 55.6% of employers did not spend money on social media in 2013/14, this proportion drops to 47.5% in 2014/15. A more strategic approach to social media marketing is becoming increasingly common. The mean 11 spend on marketing activities for 2013-2014 and predicted spend for 2014-2015 is highlighted in Figure 3.6. Online promotions attract the highest mean spend at 26,000, which is set to rise to 27,500 in 2014-2015. On campus activities attract the second highest budget of 21,250, however this is expected to decrease to 19,500 in 2014-2015. On campus Print Other online promotions Social media Student competitions Other 14,250 14,250 10,000 9,250 11,250 9,250 12,750 9,000 21,250 19,500 26,000 27,500 2013/2014 2014/2015 (predicted) Figure 3.6: Mean (trimmed) spend on key graduate attraction activities in 2013-2014 and 2014-2015 (predicted) Base = variable 11 Trimmed mean 30

Relationships with universities for marketing graduate vacancies On average, AGR members visited or worked directly with 16.9 universities 12, in order to market their graduate vacancies. However, this average varies by sector (as shown in Figure 3.7). Public sector organisations reported working with the highest number of UK universities at 33.9, followed by accountancy or professional services firms (24.8) and law (19.6). All employers 16.9 Public sector 33.9 Accountancy or professional services firm 24.8 Law firm Energy, water or utility company Consulting or business services firm Investment bank or fund managers IT/Telecommunications Engineering or industrial company Retail FMCG company Construction company or consultancy Banking or financial services 19.6 19.0 18.1 17.4 16.6 15.9 15.6 14.5 14.2 13.1 Insurance company 8.2 Other 6.0 Figure 3.7: Average number of UK universities AGR employers visit or work directly with in order to market graduate vacancies in 2013-2014 by sector Base = variable Few (5.2%) AGR employers did not visit or work with UK universities to market their graduate vacancies in 2013-2014. Figure 3.8 also shows that the average number of universities that AGR employers work with increases with the number of graduates they recruit. Those who recruited more than 500 graduates in 2013-2014 on average work with 41.3 universities compared with 9.1 amongst those that recruit just 1-25 graduates. 12 The analysis excludes three employers as the large number of universities worked with skews the average figures. 31

All employers 16.9 1-25 graduates 9.1 26-50 graduates 16.6 51-75 graduates 21.5 76-100 graduates 101-250 graduates 251-500 graduates 25.8 23.9 25.5 More than 500 graduates 41.3 Figure 3.8: Average number of UK universities AGR employers visit or work directly with in order to market graduate vacancies in 2013-2014 by graduate intake Base = variable A large proportion (56.3%) of AGR members noted that they did not undertake any graduate attraction activities outside the UK in the 2013-2014 recruitment season. Of the AGR employers that did conduct marketing activity outside the UK (base = 84), 85.7% marketed their vacancies in Europe, whilst 47.6% carried out marketing initiatives in the Americas. Europe (excluding the UK but including the Republic of Ireland) 37.5% Americas Asia 20.8% 17.7% Middle East Rest of the world 9.9% 8.9% None 56.3% Figure 3.9: The regions outside of the UK in which AGR employers conducted graduate attraction activity in 2013-2014 by sector Base = 192; multiple responses possible 32

Chapter 4 School leaver opportunities 33

School leaver opportunities In this chapter we explore the nature of school leaver opportunities offered by AGR employers. The size and variety of the opportunities are examined as well as the number of applications received. Data on marketing activities and AGR members relationships with schools is also presented. The figures reported are actual year-end figures for 2013-2014 and estimated figures for 2014-2015. School leaver opportunities offered in 2013-2014 and 2014-2015 Over two-thirds (68.2%) of AGR members offered school leaver opportunities in 2013-2014; an increase from 54.7% in 2012-2013 (reported in the Winter 2014 Review). AGR employers are predicting a further increase in 2014-2015 with almost three-quarters (72.7%) of employers planning to offer opportunities in 2014-2015. 2012-2013 54.7% 2013-2014 68.2% 2014-2015 (predicted) 72.7% Figure 4.1 Proportion of AGR members who offer opportunities to school leavers 2013-2014 and 2014-2015 Base = 198, 2012-13 Base=201 (from Winter 2014 Survey) AGR members were asked to state which types of opportunities were on offer in 2013-2014 and which they planned to offer in 2014-2015 (as shown in Figure 4.2). Apprenticeships continue to be the most popular type of opportunity on offer for school leavers. A total of 47.0% of AGR employers offered apprenticeships in 2013-14 and this is likely to rise to 51.5% of employers next year. Over a third of AGR members report that they offer (33.8%), or plan to offer (34.2%) work experience for school leavers within their organisation. The proportion of employers offering Higher Apprenticeships has risen slightly, increasing from 12.4% in 2012-2013 (as reported in the Winter 2014 Review) to 18.7% in 2013-2014, with a further increase predicted next year (21.7%). The proportion of AGR employers offering Traineeships is also increasing, rising from 2.0% reported in the Winter 2014 Review to 9.6% in 2013-2014. 34

Apprenticeships (Intermediate and Advanced) Work experience Higher Apprenticeships Sponsored/incorporated university degree programme Gap year placements School leaver training programme (leading to professional qualification) School leaver programme Traineeships Direct entry roles (BAU roles) Other 12.4% 18.7% 21.7% 9.5% 13.6% 13.6% 10.9% 12.6% 13.1% 10.0% 9.6% 11.6% 5.5% 8.6% 9.1% 2.0% 9.6% 8.6% 9.5% 11.1% 7.6% 1.5% 3.0% 0.5% 27.4% 40.3% 47.0% 51.5% 33.8% 34.3% 2012-2013 2013/2014 2014/2015 (predicted) Figure 4.2 The type of school leaver opportunities offered amongst AGR employers in 2012-2013 (from Winter 2014 Survey), 2013-2014 and 2014-2015 (predicted) Base = variable; multiple responses possible This steady rise in school leaver activity is significant, and appears to be complementing rather than replacing graduate recruitment activity, as graduate vacancies continue to increase. A public sector employer noted that the two types of recruitment fill different business needs We have seen no impact on the number of graduate vacancies due to apprenticeship schemes & both schemes are used to supplement our Early Careers intake. Whilst we recruit graduates into all technical areas of our business, our apprenticeship programme focuses on specific requirements (i.e. Laboratory Technicians, Engineers & Business Administration). Both schemes are well established & have been running for some time now. Another employer, in the accounting and professional services sector, referenced a range of factors affecting the growth in school leaver recruitment: there are a number of drivers government incentives/pressure, pursuing the social mobility agenda, accessing different talent pools and cost savings to businesses. I would have thought the trend would continue. The increasingly competitive graduate market was also quoted as a driver: competition at graduate level is probably a large incentive for many to go into schools. Growing your own, rather than paying a premium to compete and attract at the graduate level is a viable alternative. 35

Number of school leaver opportunities in 2013-2014 and 2014-2015 A total of 16,906 school leaver opportunities were offered by 104 AGR employers in 2013-2014. 13 This is expected to increase to 19,106 in 2014-2015 (across 99 employers). AGR members were asked to specify the number of places offered in 2013-2014 and the expected number of places for 2014-2015 against each school leaver opportunity. Figure 4.3 demonstrates the average number of school leaver opportunities offered per AGR member 14. Increases are expected in the number of Apprenticeships (from 84 to 121), Traineeships (35 to 77) and Higher Apprenticeships (34 to 56). Apprenticeships (Intermediate and Advanced) 73 84 121 Work experience 63 65 77 School leaver programme 46 51 63 Gap year placements 16 21 44 Traineeships* 35 77 School leaver training programme (leading to professional qualification) 38 35 44 Higher Apprenticeships Sponsored/incorporated university degree programme 31 34 37 31 43 56 2012-2013 2013-2014 2014-2015 (predicted) Figure 4.3 Average number of school leaver opportunities offered per AGR member who offers these types of programmes 15 in 2012-2013 (from Winter 2014 Survey), 2013-2014 and 2014-2015 (predicted) *Data for traineeships in 2012-2013 could be disclosive so not reported Base=variable 13 The analysis excludes one employer as the large number of opportunities offered skews the average figures. A number of employers were unable to state how many school leaver opportunities they offered. The total number of placements reported is therefore an initial estimate and may underestimate the total number of opportunities. The analysis excludes one employer as the large number of opportunities offered skews the average figures. 14 The bases include all employers who offered school leaver opportunities and who were able to specify the number of places offered. The analysis excludes three employers as the large number of opportunities offered skews the average figures. 15 The analysis excludes one employer as the large number of opportunities offered skews the average figures. 36

School leaver opportunities in 2013-2014 by business sector Based on the data provided by those employers who were able to state how many school leaver opportunities they offered 1, the analysis reveals that over two-fifths of opportunities were in the retail sector (42.4%); a further 15.7% were in engineering or industrial companies and 13.0% were in banking or financial services. Just 2.2% of opportunities for young people were offered by an energy, water or utility company. 16 Table 4.4: School leaver opportunities at AGR employers by sector in 2013-2014 % of 16,906 vacancies Retail 42.4% Engineering or industrial company 15.7% Banking or financial services 13.0% Accountancy or professional services firm 7.7% IT/Telecommunications 6.6% Law firm 4.3% Construction company or consultancy 2.8% Energy, water or utility company 2.2% Marketing of school leaver opportunities As shown in Figure 4.5, one-third (32.9%) of AGR employers offering school leaver opportunities reported that they had established a relationship with 1-10 schools in order to promote their opportunities and just over a quarter (26.0%) had established a relationships with 11-50 schools. Almost a third (30.1%) reported that they had not developed any relationships with schools in order to market their opportunities. On average AGR members marketed their opportunities with 33 schools. No relationships 30.1% 1-10 32.9% 11-50 26.0% 51 or more 11.0% Figure 4.5 Number of schools AGR members have a relationship with to market school leaver opportunities Base = 73 16 The following sectors are not reported in our analysis as the small number of respondents within the sector may jeopardise their anonymity: Oil companies, chemical or pharmaceutical companies, insurance, public sector, investment bank or fund managers, consulting or business services firms, FMCG and transport or logistics companies. 37

AGR members were asked to state the total budget allocated to school leaver attraction activities during the 2013-2014 recruitment season and what they planned to spend during 2014-2015. As shown in Figure 4.6, almost half of AGR members (46.2%) did not allocate any budget to school leaver attraction activities, just over a fifth (20.4%) spent up to 10,000 and 12.9% spent 10,001 to 25,000. Spend is likely to increase in 2014-2015 as the proportion of employers reporting that they do not plan to spend anything on school leaver attraction activities is predicted to fall by 11.3 percentage points to 34.9%. No budget was allocated 34.9% 46.2% Up to 10,000 20.4% 27.9% 10,001 to 25,000 10.5% 12.9% 25,001 to 50,000 50,001 to 100,000 2.3% 5.4% 7.5% 14.0% 100,001 or more 7.5% 10.5% 2013/2014 2014/2015 (predicted) Figure 4.6: Total spend on school leaver attraction activities in 2013-2014 and 2014-2015(predicted) 2013 Base = 93, 2014 Base = 86 38

Appendix Methodology and profile of respondents 39

Appendix Changes to 2015 Winter Review As part of AGR s commitment to producing more high-quality research and analysis for our members, we ve adopted several changes to our Winter Survey this year which we d like to share with you. Those of you who completed the survey will have noticed that, in collaboration with CFE, we made each section easier to complete but still detailed enough to provide valuable insight. We added clearer explanations and replaced subjective questions with quantitative questions to enable you to objectively benchmark against a wider range of factors e.g. turn-down rates and the percentage of graduate hires who previously worked for the employer. We also standardised questions about school leaver vacancies to enable easier comparisons between the school leaver and graduate markets. In terms of the report itself, we have been carrying out extra analysis to uncover correlations and make sure that we report on the trends that are most valuable to you. As we commented in the introduction, the student recruitment market is a complex series of labour markets with different traits. You will notice a particular focus this year on breaking down the industry averages by sector and intake size to make the key findings more relevant to you the user. To give a few examples, the graphs in the report show the economies of scale involved when setting marketing budgets, and the widely varying degrees of campus presence. Public sector firms are more prominent on campus but have much lower marketing spends per vacancy than average. Law firms have a significantly higher marketing spend per vacancy yet have lower offer acceptance rates: but also a higher proportion of hires who have previously worked for them. More than 40% of our respondents employed 25 graduates or less; a testament to the wide variety of players in the graduate market that we are able to represent. I look forward to meeting more of you in future and hearing your views on how this data helps you improve your recruitment and development strategies. As we continue to enhance and build the AGR s research capability, we need your feedback so please do drop me a line. Samuel Gordon Research Analyst AGR Samuel@agr.org.uk 40

Methodology Data was collected via an online survey hosted on the CFE website for a four-week period spanning November and December 2014. An electronic invitation containing a link to the survey and a personal password was sent to all AGR employer members. The survey included different types of questions to capture a variety of information including banded and open response. Key questions were mandatory to ensure that all respondents views were captured. AGR employers were routed through the survey on the basis of their responses to ensure they only responded to the questions that were relevant to their recruitment practices. The results were analysed using statistical software. The Review reports a variety of statistics including frequencies, means and medians 17. The number of organisations that responded to each question is presented for each chart or table as the base. Bases vary throughout the report to reflect that not all participants responded to the same questions due to the routing applied. Where bases are too low to ensure the reliability of findings or maintain the anonymity of respondents, figures are not reported. References to data for the 2013-2014 recruitment season relate to the actual year-end figures captured in December 2014. By contrast, information for the 2014-2015 recruitment season represents AGR members predictions or expectations for the current recruitment season and should therefore be seen as a forecast; the Summer 2015 Review will provide an update on these predictions in May. It is also important to understand that the graduate recruitment practices of AGR members vary widely from sector to sector. Law firms provide a case in point recruitment lead times of two years are standard as graduates are often sponsored to complete post-graduate law courses prior to the commencement of their Training Contract. The vacancy levels reported for the 2013-2014 recruitment season therefore relate to vacancies for which law firms have recruited, although graduates will not typically commence employment until 2016. Profile of respondents A total of 201 AGR members took part in the survey representing a response rate of 65%. Collectively, these are estimated to have offered a total of 21,682 vacancies during the 2013-2014 recruitment season. Almost two-thirds (64.7%) of AGR employers reported that they have one intake of graduates in the year, whilst approximately one-fifth (19.9%) have multiple intakes of graduates. Meanwhile, just over 10% of AGR members indicated that they have a rolling programme of recruitment (Figure I). 17 A frequency reports the proportion of respondents giving a specific answer. A mean (average) is calculated by adding together all of the results and then dividing the total by the number of responses. A median is the number we obtain by placing all of the responses to a given question in order of their value and selecting the middle value. Where there is no single middle value the two middle values are added together and divided by two. 41

Rolling programme of recruitment 10.9% Ad hoc recruitment 3.5% Other 1.0% More than one intake of graduates per year 19.9% One intake of graduates per year 64.7% Figure I: Recruitment methods of respondents Base = 201 A large range of business sectors responded to the Winter 2015 questionnaire (Figure II); the largest proportion of respondents were from the law sector (16.9%), followed by the engineering/industrial (13.9%) and banking/financial services sectors (10.4%). Law firm 16.9% Engineering or industrial company 13.9% Banking or financial services IT/Telecommunications 9.5% 10.4% Retail 7.5% Construction company or consultancy Public sector Accountancy or professional services firm Energy, water or utility company FMCG company Investment bank or fund managers Consulting or business services firm Insurance company Transport or logistics company Chemical or pharmaceutical company Oil company Other 5.5% 5.0% 5.0% 4.5% 4.0% 4.0% 3.5% 2.5% 1.5% 1.5% 1.5% 3.5% Figure II: Sector of respondents Base = 201 42

The distribution of responses by size of employer is broadly similar to Winter 2014, with the vast majority of AGR members who completed the survey being large organisations with more than 250 employees (94.5%). Just over one-fifth (20.5%) of AGR members employed at least 20,000 individuals (Figure III). 1-249 employees 5.5% 250-999 employees 15.0% 1,000-2,499 employees 22.0% 2,500-4,999 employees 14.5% 5,000-19,999 employees 20,000 employees or more 20.5% 22.5% Figure III: Business size of respondents Base = 200 Two-fifths of AGR employers responding to the survey recruited 1-25 graduates in 2013-2014 (Figure IIII). Almost a third recruited between 26-50 (17.0%) or 51-75 (12.5%). Only a small proportion of AGR members recruited over 500 graduates (4.0%). 1-25 graduates 40.5% 26-50 graduates 51-75 graduates 12.5% 17.0% 76-100 graduates 7.0% 101-250 graduates 12.5% 251-500 graduates 501 or more 4.0% 6.5% Figure IIII: Size of graduate intake (2013-2014) of respondents Base = 200 43

Founded in 1968, the Association of Graduate Recruiters is an independent, not-for-profit organisation dedicated to supporting employers in all aspects of graduate recruitment and development. Our aim is to set the agenda for change in graduate recruitment and development and our unrivalled knowledge and experience in this field gives employers the edge. Established since 1997, CFE is an independent not-for-profit company specialising in the provision of research and evaluation services across a broad field of education, employment and skills. www.agr.org.uk www.cfe.org.uk