UK employers have reported a 12 per cent decline in the number of graduates they have recruited since last year, with around half of companies anticipating a further decline next year.

According to a report from the Institute?of Student Employers (ISE),?about a third of 153 firms who responded to a survey reported that?due to the pandemic they had already reduced the number of graduates that they planned to hire.

At the same time, employers reported that the volume of applications had gone up by 14?per cent.

The ISE Student Recruitment Survey 2020 said that this is the largest fall in graduate recruitment since the start of the previous recession in 2008-09, when graduate recruitment declined by 25 per cent. Last year graduate recruitment increased by 10?per?cent.

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Respondents had hired a total of 18,361 graduates during 2019-20 and received?more than 1.5 million applications. The survey predicted a further 2 per cent decline of graduate hiring in 2020-21. However, the ISE suggested that this could be ¡°a best-case scenario¡± and the firms that were unsure about their hiring during September and October, when the survey was open, may be more likely to reduce their end-of-year targets.

The report found that the recruitment decline was spread unevenly across sectors. While in retail and consumer goods, it had declined by 45 per cent, by 25 per cent in the built environment sector and by 20 per cent in digital and IT, it?had risen?in the charity and public sector by 4 per cent. ?

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Overall, employers reported that they were generally able to recruit graduates with the skills, knowledge and behaviours that they needed. The survey found that 72 per cent of employers were ¡°almost always¡± able to find the quality of graduates that their business needed, compared with only 58 per cent of employers last year.

This suggests that employers have been able to pick and choose more during a period when the labour market was contracting, the ISE said.

The survey also found that employers reported a 29 per cent decrease in internships and a 25 per cent?fall in placements in 2019-2020, with further shrinkage expected in the following year.

The National Centre for Universities and Business has called for ¡°urgent action¡± from the government to reduce youth unemployment in the wake of the pandemic and called for National Insurance contributions for young people under the age of 25 to be temporarily abolished.

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In June, Universities UK called for the government to provide universities and businesses with funding to set up paid internships for graduates, as well as an in-study interest break on the postgraduate master¡¯s loan.

Stephen Isherwood, chief executive of the ISE, said the effect of the pandemic on the student labour market ¡°is not a simple replay of 10 years ago¡±.

¡°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.

¡°We mustn¡¯t forget the students or ignore the lived experience of those who are struggling to cope with the crisis and to get a good start to their career¡­We look to the government to do all it can to ensure that the pandemic does not disrupt this key career transition from education to work.¡±

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anna.mckie@timeshighereducation.com