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Recruitment
2015
The AGR
Annual Survey
CFE Research
Phoenix Yard
Upper Brown Street
Leicester LE1 5TE
For more information please contact Sarah Neat on 0116 229 3300 or Sarah.neat@cfe.org.uk
Website: www.cfe.org.uk
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publisher.
Contents
Foreword ................................................................................................................................... 7
Executive summary .................................................................................................................... 9
Introduction ............................................................................................................................ 12
Graduate vacancies.................................................................................................................. 14
Graduate vacancies in 2013-2014 and 2014-2015 ....................................................................................................... 14
Vacancy changes by sector from 2013-2014 to 2014 to 2015 ..................................................................................... 15
Vacancies in 2013-2014 and 2014-2015 by size of firm ............................................................................................... 16
Vacancies in 2014-2015 by geographical area .............................................................................................................. 17
Vacancies in 2014-2015 by career area ........................................................................................................................ 18
Diversity of graduate recruits in 2013-2014 ................................................................................................................. 19
Monitoring and improving the diversity of graduate recruits ...................................................................................... 20
Appendix 1 .............................................................................................................................. 50
Methodology and respondent profile.......................................................................................................................... 51
Foreword
Our employer members graduate vacancies have risen by 13.2% compared to 2014, meaning that total
vacancies have reached the highest ever level on our records and exceeding the predictions made at the
start of the season. Median graduate salaries have risen by 3.7% and the average salary paid to an intern is
now 317 per week.
Yet despite this buoyant graduate market the number of female graduates joining AGR employer
programmes averages only 41.6%, even though 58.7% of graduates are women. So diversity in our
graduate workforce remains a challenge. Whats more, the overall share of females has not improved in the
last five years despite 62.8% of firms currently having a strategy to improve their gender balance. This is an
issue which requires more of our attention.
This year, AGR is also pleased to be able to share the first industry-wide benchmarks of how much
graduates cost to recruit and develop. By using your total recruitment and development budgets and
dividing these by the number of your graduate vacancies, we can state that graduates cost an average of
3,396 to recruit and 2,693 to develop. The average for law firms is much higher and so is listed
separately. These figures once again reflect the level of investment that our industry is making to attract
and nurture graduate talent.
Employers are also retaining their graduates. Despite a commentary that all graduates are job-hoppers,
graduates stay with our employer members for a median period of 5 years. Whats more, only 5% leave in
their first year on the job and just 12% leave before the end of two years. We have gathered a wealth of
insight into the financing and support in graduate development programmes and we encourage you to
delve into the report to find out more.
Our findings also highlight some gaps in data that are holding improvements. For example, 86.4% of
employers dont know the socio-economic background of their hires, 72.2% dont know their 5-year
retention rates, and 40.4% dont calculate the value that graduates bring to their business. Making better
use of data will be essential to help us to best manage our talent in future.
To help you make good use of these benchmarks in your work, you can interact with our data once again
on AGRs website. Be sure to log into our Data Dashboard and explore the numbers most relevant to you.
Our research also continues to evolve and we value your feedback. Enjoy the report and we look forward to
your continued engagement with AGR and our analysis.
Stephen Isherwood
Chief Executive, AGR
Samuel Gordon
Research Analyst, AGR
Executive summary
Graduate vacancies
Employers are offering 13.2% more graduate vacancies than last year with a predicted 24,126 vacancies for
the 2014-15 season. The sectors with the largest number of vacancies are Accounting and professional
services (23.0%), the Public sector (14.6%), and Engineering and industrial firms (12.1%). 54.1% of vacancies
are outside London, with the top two regions being the West Midlands (7.7%) and the South East (6.9%).
Four in five employers (78.4%) have at least one targeted strategy to improve diversity. The most common
focus is on gender diversity, with 62.8% of firms working to increase their share of female hires. However,
the average share of female hires is currently 41.6%, compared to 58.7% of university graduates. The
average share of Black Asian Minority Ethnic (BAME) hires is 15.6%, compared to 18.6% of university
graduates. Only 25.8% of employers monitor the socio-economic background of their hires.
Graduates cost an estimated 3,396 to recruit on average, excluding the legal sector where the average
cost per hire is 12,682. These costs also exhibit economies of scale, with firms employing less than 25
graduates averaging 5,632 to recruit each hire and those employing more than 250 graduates only
averaging 2,0891.
Graduate salaries
Median graduate salaries have risen. Starting salaries now stand at 28,000, up 3.7% from 27,000 a year
ago. Median salaries at 1, 3 and 5 years are 28,000, 35,000 and 45,000 respectively. These changes
reflect the increasing competitiveness of the market.
10
Introduction
11
Introduction
Welcome to the AGR Annual Survey 2015.
The AGR Annual Survey is the definitive study of AGR employer members and their recruitment and
development practices. It provides the latest insights on conditions and trends in the graduate recruitment
and development market, as well as regular benchmarking of key market indicators including vacancy and
salary levels.
As the leading survey of graduate recruitment practices, spanning the longest continuous series of
recruitment seasons, the survey previously referred to as the Summer Survey is the primary source of
information on graduate recruitment levels, methods and practices amongst AGR members. It is an
invaluable tool for assessing, organising and optimising graduate recruitment and development activities.
Undertaken on behalf of AGR by CFE Research, this Annual Survey explores:
Chapter 1: Predicted graduate vacancy levels for the 2014-2015 recruitment season split by
business sector, geographical area and career area, and changes observed since 2013-2014.
Chapter 2: Predicted graduate starting salaries in 2013-2014 by business sector, geographical area
and career area.
Chapter 3: The use of placement and internship programmes amongst AGR employers and their
role and contribution to graduate recruitment.
Chapter 4: The volume of applications submitted to AGR members for positions on graduate
programmes and selection methods as well as the new calculation of the total cost to recruit a
graduate.
Chapter 5: The extent and cost per hire of graduate development programmes amongst AGR
members and the features of the programmes, and levels of retention and progression amongst
graduate recruits.
12
Chapter 1
Graduate vacancies
13
Graduate vacancies
This chapter presents AGR members graduate vacancy levels for the 2014-2015 recruitment season by
business sector, size and geographical area, and compares these to the year-end graduate vacancy levels
observed for 2013-2014.
14.7%
2001
14.6%
2002
-6.5%
2003
-3.4%
2004
15.5%
2005
5.1%
2006
5.1%
2007
12.7%
2008
2009
0.6%
-8.9%
2010
8.9%
2011
2012
1.7%
-8.2%
2013
4.3%
2014
4.3%
2015 (predicted)
13.2%
Figure 1.1:
Graduate vacancy changes at AGR employers from 1999-2000 to 2014-2015 Percentage increase or decrease on
previous year - Varying bases
14
% of 24,126 vacancies
2013-14 2014-15
23.0%
18.4%
Public sector
14.6%
17.1%
12.1%
5.9%
Retail
10.1%
12.7%
9.6%
7.3%
IT & Telecommunications
9.1%
16.4%
5.4%
19.8%
Law firm
5.1%
-1.1%
4.5%
47.8%
FMCG company
1.9%
7.3%
1.0%
-9.5%
Insurance company
0.5%
21.5%
0.5%
-15.1%
Other
0.6%
24.6%
The following sectors are not reported in our analysis as the small number of respondents may jeopardise their
anonymity: chemical or pharmaceutical companies, investment bank or fund managers, motor manufacturing and oil
companies.
15
32.3%
29.6%
5,000-19,999 employees
28.0%
15.8%
2,500-4,999 employees
17.1%
10.8%
1,000-2,499 employees
10.5%
10.9%
250-999 employees
10.8%
1-249 employees
1.7%
1.2%
2014-2015
2013-2014
Figure 1.3:
Graduate vacancies for AGR employers in 2013-14 and 2014-2015 (predicted) by size of firm Base = 197
16
45.9%
West Midlands
7.7%
South East
6.9%
South West
6.2%
North West
6.2%
5.6%
Scotland
5.1%
East Midlands
3.9%
North East
3.8%
East of England
3.0%
Wales
2.3%
Northern Ireland
1.6%
EMEA
1.1%
Americas
0.3%
Rest of World
0.4%
*The base appears 18,930 instead of 24,126 because some responding organisations
failed to provide information about the geographical areas in which they recruit. Please
note recruiters may be offering vacancies in more than one geographical area
simultaneously.
17
16.1%
Consulting
12.1%
IT
12.1%
Legal
5.4%
Retail management
5.2%
General management
4.8%
Financial management
4.4%
Civil engineering
3.9%
Mechanical engineering
3.5%
Sales
2.8%
Investment
2.7%
2.2%
Actuarial
1.5%
HR
1.3%
Marketing
1.2%
Science
1.2%
Purchasing
0.9%
Manufacturing
0.8%
Research
0.8%
Logistics
0.6%
16.6%
*The vacancies base appears 20,343 instead of 24,126 because some responding
organisations failed to provide information about the career areas in which they recruit.
Recruiters may be offering vacancies in more than one career area simultaneously.
18
All respondents
54.6%
53.8%
Law firm
53.5%
56.8%
Retail
50.0%
53.2%
FMCG company
49.6%
Public sector
59.4%
38.3%
40.0%
35.2%
40.9%
34.7%
30.3%
28.4%
IT/Telecommunications company
34.8%
26.7%
27.5%
15.8%
23.8%
2009-2010
2013-2014
Figure 1.6:
Average proportion of female graduates AGR employers recruited in 2009-2010 compared to 2013-2014 by sector
5
Varying bases
5
Please note that the outliers in the 2013-2014 have been removed, but a similar methodology was not adopted in
2009-2010. In addition the AGR membership base per sector between the two periods examined may have changed
which could account for some of the changes witnessed.
19
The proportion of Black Asian and Minority Ethnic (BAME) hires averaged 15.6% per employer in 20132014. This proportion compares well with the graduate talent pool: according to HESA data, 18.6% of
university graduates are BAME. In other words, fewer BAME candidates are joining the graduate
programmes of AGR members than leaving university, but the gap is small.
The share of BAME hires per employer also varies by sector. Figure 1.7 indicates that Banking or financial
services firms (20.1%) and Public sector firms (19.1%) have a higher proportion of BAME hires than in the
graduate talent pool, whilst BAME graduates are least likely to join FMCG (9.7%) and Retail firms (11.5%) .
All respondents
15.6%
20.1%
Public sector
19.1%
Law firm
18.1%
18.0%
12.8%
12.4%
Retail
FMCG company
Other
11.5%
9.7%
8.0%
Figure 1.7:
Average proportion of Black Asian and Minority Ethnic graduates AGR employers recruited in 2013-2014 by sector
Base = 91
20
improve social mobility than are monitoring it. As more employers start initiatives to address social
mobility, monitoring is going to be increasingly important in order to evaluate their success.
88.1%
Gender
62.8%
68.6%
Ethnicity
43.9%
47.2%
Disability
29.1%
31.4%
Sexuality
23.0%
25.8%
Socio-economic background
Other
None
36.5%
3.8%
1.4%
Monitor (n=159)
11.3%
Figure 1.8:
Comparison of proportion of AGR employers who monitor versus have targeted strategies to improve diversity in
2014-2015
Employers use more than one metric to capture socio-economic background. The most widely-used metric
is whether an applicant is a first generation graduate (95.0%), followed by their type of schooling (82.5%)
and whether they had been in receipt of free school meals (62.5%). This varying use of metrics means that
progress on social mobility is more complicated to track than the progress on gender or ethnicity.
95.0%
82.5%
Parent's occupation
Other
62.5%
10.0%
5.0%
Figure 1.9:
Type of socio-economic data collected by AGR employers in 2014-2015 Base = 40, multiple responses possible (this
question is answered only by those who collect data)
21
Chapter 2
Graduate salaries
22
Graduate salaries
This chapter looks at predicted starting salaries for the 2014-2015 recruitment season by business sector
and geographical area.
37,000
31,250
28,500
FMCG company
28,500
IT & Telecommunication
28,500
28,000
26,750
25,750
25,500
Public sector
23,750
Retail
21,500
Other
22,000
The following sectors are not reported in our analysis as the small number of respondents within the sector may jeopardise their
anonymity: chemical or pharmaceutical companies, insurance companies, investment bank or fund managers, oil companies and
transport or logistics companies.
7
The highest starting salaries have historically been offered to investment bank or fund managers however due to low bases
cannot be reported in this review.
23
28,500
South East
25,500
South West
25,000
East of England
25,000
East Midlands
25,000
West Midlands
25,000
North West
25,000
25,000
Scotland
25,000
North East
24,750
Wales
24,500
Northern Ireland
23,000
EMEA
28,000
Americas
25,000
28,000
35,000
45,000
24
Chapter 3
Student placements and
internships
25
Internships
Graduate
% of 7,195
% of 21,3568
Law firm
20.8%
5.8%
18.8%
21.9%
16.2%
10.1%
14.5%
12.9%
Public sector
6.1%
14.1%
3.3%
5.1%
FMCG company
3.1%
2.0%
2.9%
1.3%
Retail
2.5%
10.4%
IT & Telecommunications
1.8%
8.8%
Only those sectors which are also represented for internships are included here.
26
Table 3.1 represents the spread of internship, placement and graduate vacancies by sector. One-fifth of
internship places were in Law firms (20.8%), which is not surprising given these vacation schemes can be as
short as 1-2 weeks and are heavily relied upon as a source of future hires. The sectors with the next highest
number of interns are Accountancy or professional services firms (18.8%) and Banking and financial
services (16.2%).
Use of Sandwich or industrial placements also varies by sector. The largest share of placement vacancies is
in Engineering or industrial companies (19.8%), Retail companies (12.9%), and Banking and financial
services firms (11.0%)9. Employers reported offering 2,676 placement opportunities in 2013-14.
More than half (62.1%) of employers with internships made them available to graduates as well as
students. On average, 90.6% of the internship places were open to graduates. Almost three-quarters of all
employers (70.9%) also recruited graduates and interns using the same selection instruments (Figure 3.2).
This shows that employers are standardising their approach to these two forms of entry-level talent.
Yes
70.9%
No
Don't know
21.8%
7.3%
Figure 3.2:
Whether selection instruments used for placement/intern programmes mirror those for recruiting graduates 20142015 Base= 179
The following sectors are not reported in our analysis as the small number of respondents may jeopardise their anonymity:
chemical or pharmaceutical companies, consulting or business services firms, insurance companies, investment bank or fund
managers, motor manufacturing, oil companies, and transport or logistics companies.
27
Up to 250
7.0%
2.4%
30.7%
251-300
20.2%
23.7%
301-350
39.3%
11.4%
13.1%
351-400
401 or more
Prefer not to say
14.9%
4.8%
4.4%
4.8%
6.1%
Don't know
15.5%
Interns (114)
1.8%
0.0%
Figure 3.3:
Average weekly salary paid to interns and sandwich placements at AGR employers in 2012-2013 (these questions
are answered only by those who offer internships and sandwich placements)
28
Chapter 4
Applications and selection
29
98.1%
92.6%
Outsourced services
51.9%
Other
33.3%
18.5%
Figure 4.1:
Activities included in AGR employers recruitment budgets Base = 162, multiple responses possible
The average cost to recruit a graduates varies by sector. Figure 4.2 indicates that Law firms have the
highest cost per hire (12,682) followed by Energy, water or utility companies (8,085). Retail firms have
the lowest cost per hire at just 1,252.
10
30
3,396
8,085
FMCG company
6,144
Public sector
3,324
IT & Telecommunications
2,985
2,573
2,281
2,000
1,252
Law firm
12,682
Figure 4.2:
Recruitment cost per hire of AGR employers by sector - Varying bases
These costs are also influenced by economies of scale. Employers planning to recruit only 1-25 graduates
have the highest recruitment cost per hire (5,632) whilst firms expecting to recruit more than 250
graduates have the lowest cost per hire at 2,08911.
1-25 graduates
5,632
26-50 graduates
4,117
51-100 graduates
101-250 graduates
251 or more
4,910
2,220
2,089
Figure 4.3:
Recruitment cost per hire of AGR employers (excluding Law firms) by size of intake Base = 96
11
This recruitment cost per hire analysis by size of intake excludes Law firms.
31
35
2000-2001
39
2001-2002
38
2002-2003
42
2003-2004
38
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
33
28
29
31
49
2009-2010
69
2010-2011
83
2011-2012
73
2012-2013
85
2013-2014
2014-2015*
69
65
Figure 4.4:
Number of applications per vacancy received by AGR employers between 1999 and 2015 Varying bases
Figure 4.5 shows the averages for 2014-15 split out by sector. FMCG firms have the highest number of
applications per vacancy at 109. The only sectors to record an increase in applications per vacancy
compared to 2013-14 were the Energy, water or utility sector (from 51 applications per vacancy to 99) and
Retailers (from 68 applications per vacancy to 76), although the two numbers are not directly comparable
as the 2014 Summer Survey was carried out earlier in the year.
12
The 2014-2015 predicted results were captured at a slightly later point in the year (June/July) than previous AGR
Reviews (May/June).
32
All respondents
65
FMCG company
109
99
78
Retail
76
IT & Telecommunications
72
46
Public sector
44
Law firm
42
35
22
Other
82
Figure 4.5:
Average number of applications per vacancy to date 2014-15 by sector Varying bases
Figure 4.5 also shows that the number of applications per vacancy appears to reduce as the size of graduate
intake increases. Firms with an intake of 1-25 graduates have received 94 applications per vacancy to date
compared to just 20 for those employers recruiting more than 500 graduates.
1-25 graduates
94
26-50 graduates
76
51-75 graduates
76-100 graduates
55
22
101-250 graduates
38
251-500 graduates
501 or more graduates
32
20
Figure 4.5:
Average number of applicants to date per predicted vacancy 2014-15 By size of graduate intake 2014-2015
Varying bases
33
All respondents
11.0
Public sector
15.5
14.0
Law firm
12.3
12.3
FMCG company
11.3
11.2
9.8
Retail
IT & Telecommunications
8.1
6.8
Other
11.6
Figure 4.6:
Average time to offer for graduate places by sector Varying bases
110.9%
118.3%
Public sector
115.0%
113.8%
Law firm
112.4%
111.6%
111.0%
106.9%
105.9%
105.1%
FMCG company
104.0%
Other
104.0%
Figure 4.7:
Proportion of offers employers plan to make to vacancies in 2014-2015 by sector - Varying bases
13
This over-offer calculation and the analysis by sectors in Figure 4.7 are based on the proportion of offers employers
plan to make compared to the exact number of graduates they plan to recruit in 2014-2015. However, where the
number of offers made to date exceeds those which they planned to make, the latter figure has been updated with
the former higher number to calculate the proportion of over-offers.
34
The challenge of reneged offers varies considerably by sector. Accountancy or professional services firms
and Banking or financial services face the biggest challenges, with 12.9% and 12.8% of reneged offers
respectively. This challenge is much smaller for Law firms, with only 1.3% of offers reneged upon.
All respondents
8.2%
12.9%
12.8%
12.2%
IT & Telecommunications
11.8%
Public sector
9.8%
6.7%
Retail
6.5%
5.8%
FMCG company
Law firm
4.0%
1.3%
Other
4.3%
Figure 4.8:
Offers accepted then declined as a proportion of offers made by AGR employers in 2014-15 to date by sector
Varying bases
Selection criteria
Employers use many approaches to their selection process. Nine out of ten employers (91.9%) include a
competency-based approach, with one-third of firms (33.7%) relying solely on a competency-based
approach. Around one in four firms (26.7%) used both competency and technical approaches, with only one
in six firms (15.1%) using a combination of competency, strengths and technical approaches.
Competency only
33.7%
26.7%
15.1%
13.4%
11.0%
Figure 4.9:
AGR employers approaches to graduate selection Base = 172
The most common entry cut-off is a 2:1 degree, with 77.0% of AGR employers using this as an entry criteria
for their selection process and one-fifth (20.0%) require a minimum of a 2.2 degree classification. The
second-most popular entry criteria was use of UCAS tariffs (33.3%), with 306 UCAS points being the average
35
number of points used. The use of UCAS tariffs has decreased slightly from 38.2% in 2013-201414. Only
21.2% of employers use work experience as minimum selection criteria, down from 29.2% in 2012-13.
Minimum 2.1 degree classification
77.0%
UCAS tariff
33.3%
29.1%
21.2%
20.0%
5.5%
3.0%
1.8%
1.8%
Other
7.3%
Figure 4.10:
Minimum entry standards at AGR employers in 2014-2015 Base = 165, multiple responses possible
Selection methods
AGR members are employing a range of selection instruments to recruit graduates in the 2014-2015
season15. Figure 4.11 shows that assessment centre or group selection events (91.8%) are the most
popular, followed by face-to-face interviews (74.3%). Almost one in three (29.8%) AGR employers now use
video interviewing compared to 21.2% in 2013-2014.
91.8%
Face-to-face interviews
74.3%
71.3%
Telephone interviews
42.7%
32.2%
Video interviews
Other
29.8%
2.9%
Figure 4.11:
Graduate selection instruments at AGR employers in 2014-2015 Base = 171, multiple responses possible
14
Please note, the response options included in this survey question altered slightly from the AGR Summer Survey
2014.
15
Please note, the response options included in this survey question altered slightly from the AGR Summer Survey
2014.
36
Figure 4.12 shows that for those employers who use psychometric tests in their selection process, numeric
reasoning tests remain the most popular (77.9%) with verbal reasoning tests as the second most popular
(68.9%). The proportion of firms using verbal reasoning tests has decreased slighty from 75.6% (in 20132014) to 68.9%. Conversely, situational judgement tests are more common in 2014-2015 than the previous
recruitment season (37.7% compared to 30.1%).
Numeric reasoning tests
77.9%
68.9%
37.7%
31.1%
Other
22.1%
10.7%
Figure 4.12:
Types of psychometric testing used or plan to use by AGR employers in 2014-2015 Base =122, multiple responses
possible (this question is answered only by those who use psychometric testing)
Nine out of ten (90.8%) employers cover at least one form of expense incurred by applicants related to
assessment centres or group selection events. As Figure 4.13 shows, the most common expenses covered
are travel and accommodation, both at a capped amount (63.8% and 40.8% respectively).
63.8%
40.8%
Travel - all
24.3%
Food - all
24.3%
Accommodation - all
23.0%
13.8%
9.2%
Figure 4.13:
Type of expenses paid by AGR employers for candidates to attend assessment events Base=152, multiple
responses possible
37
66.5%
56.1%
No
51.4%
27.2%
Figure 4.14:
AGR employers that monitor feedback on the candidate experience during selection process Base=173, multiple
responses possible
Some sectors are much more likely to capture candidate feedback than others, as in Figure 4.15. 100% of
Accountancy or professional services firms monitored this, with Public sector and IT & Telecommunications
companies the next most likely sectors to monitor feedback (84.6% and 83.3% respectively). Retail firms
were the least likely to capture candidate feedback on their selection process (58.3% of employers).
All respondents
66.5%
100.0%
Public sector
84.6%
IT & Telecommunications
83.3%
80.0%
Consulting or business
80.0%
FMCG company
Construction company or consultancy
Banking or financial services
Energy, water or utility company
Retail
72.7%
66.7%
64.3%
62.5%
58.3%
Figure 4.15:
AGR employers that monitor feedback from successful candidates about their experience during selection process
by sector Varying bases
38
Two-thirds of AGR members (66.3%) also benchmark the on-the-job-performance of graduates to check
whether their selection process is bringing in high performers. As shown in Figure 4.16, more than fourfifths of Law, Retail and FMCG companies do this (84.6%, 83.3% and 81.8% respectively), whist Engineering
or industrial companies are least likely to do this type of benchmarking (39.1%).
All respondents
66.3%
Law firm
84.6%
Retail
83.3%
FMCG company
81.8%
78.6%
Public sector
76.9%
75.0%
72.7%
57.1%
IT & Telecommunications
45.5%
Insurance company
40.0%
39.1%
Other
16.7%
Figure 4.16:
AGR employers who do benchmark on-the-job performance of recruited graduates to check if the selection process
is working by sector - Varying bases
39
Chapter 5
Graduate development and
retention
40
16
This development cost per hire analysis by size of intake excludes Law firms.
41
2,963
Public sector
3,139
FMCG company
2,924
2,861
2,544
IT & Telecommunications
2,367
2,262
Retail
1,054
Law firm
16,975
Figure 5.1:
AGR employers average (trimmed mean) development cost per graduate - by sector - Varying bases
1-25 graduates
4,246
26-50 graduates
2,884
51-100 graduates
2,687
101-250 graduates
251 or more
3,454
736
Figure 5.2:
AGR employers average (trimmed mean) development cost per hire (excluding Law firms) - by size of graduate
intake Varying bases
17
42
1-249 employees
250-999 employees
40.0%
38.5%
1,000-2,499 employees
63.0%
2,500-4,999 employees
87.1%
5,000-19,999 employees
87.2%
100.0%
Figure 5.3:
Proportion of graduates on permanent contracts by size of employer - Varying bases
28.2%
18.4%
17.8%
10.4%
9.2%
Figure 5.4:
Top 5 combinations amongst AGR members for where headcount responsibility and source of graduate
development programme funding sits within their organisation Base = 163
Table 5.5 shows how the use of a centrally held headcount varies by the size of firm. Smaller firms are much
more likely rely on a central headcount than larger firms. The responses showed no clear trend in terms of
the share of employers that chose a mixture of central and departmental headcount versus those who
opted for headcount to only be held in departments.
43
Central
headcount
All respondents
36.0%
1-249 employees
63.6%
250-999 employees
58.3%
1,000-2,499 employees
44.4%
2,500-4,999 employees
23.3%
5,000-19,999 employees
24.4%
29.0%
Base
164
99.3%
92.7%
87.3%
86.7%
Rotation Placement
81.3%
78.7%
76.0%
End-of-programme events
Other
60.0%
8.7%
Figure 5.6:
Type of development activities offered to graduates by AGR employers in 2014-2015 Base = 150, multiple
responses possible
44
The least commonly used form of support were end-of-programme events (60.0%) although with nearly
two thirds of employers offering these it is still a common form of development (Figure 5.7). End-ofprogramme events were most common in Engineering and industrial companies (72.2%) and least common
in Accountancy and professional services firms (37.5%).
All respondents
60.0%
72.2%
71.4%
FMCG company
70.0%
66.7%
Law firm
55.6%
IT & Telecommunications
54.5%
53.8%
Public sector
50.0%
Retail
50.0%
37.5%
Figure 5.7:
End of programme events run by AGR employers in 2014-2015 by sector - Varying bases
Graduates typically received 20.3 days of off-the-job training, with averages of 12.6 days of technical
training and 7.8 days of soft skills training respectively. As shown in Figure 5.8 two in five firms (44.2%)
offered optional training for their managers on how to manage graduates, with over a third of companies
offering compulsory training (35.6%). This share of employers training their managers is surprisingly low
given that manager engagement is a hot topic amongst graduate employers.
Optional training for managers of graduates
44.2%
Other
Don't know
35.6%
9.2%
14.7%
Figure 5.8:
Percentage of managers of graduates receiving training in 2014-2015-Base=163
45
76.7%
54.1%
19.9%
17.8%
13.7%
Other
11.0%
5.5%
Figure 5.9:
Types of financial support AGR employers provide for graduates studying for a professional qualification -Base=146,
multiple responses possible
84.6% of employers offer financial support for graduates who relocate offices during their graduate
development programmes. The most commonly covered cost is travel, with around half (50.8%) of
employers covering the travel costs of relocation and only 16.2% covering the travel costs of the daily
commute. One-quarter (27.7%) of employers cover the cost of accommodation albeit capped at a
maximum amount (Figure 5.10).
Travel costs - for relocation only
50.8%
27.7%
20.0%
20.0%
16.2%
Other
16.9%
Don't know
None
11.5%
15.4%
Figure 5.10:
Types of financial support AGR employers provide for graduates who relocate Base=130, multiple responses
possible
46
21.7%
19.9%
Training costs
13.3%
Salary
12.7%
10.2%
7.2%
6.6%
2.4%
1.2%
Don't know
18.7%
40.4%
Figure 5.11:
Methods used by AGR employers to assess the monetary value that graduates add to the business Base = 166,
multiple responses possible
93.5% of employers intend to assess the performance of their graduate development programmes. Almost
all review performance ratings (92.8%) and around two thirds (67.3%) look at levels of retention. Two-fifths
(39.9%) review the time to promotion. Less common methods include comparing graduate performance
relative to direct hire peers (15.7%) and school leaver peers (1.3%) (Figure 5.12).
Performance ratings
92.8%
Retention
67.3%
Time to promotion
39.9%
15.7%
1.3%
2.6%
Figure 5.12:
18
Methods used by AGR employers to assess the performance of graduates in 2014-2015 Base = 153 , multiple
responses possible
18
Multiple responses were possible and this question was answered only by those who assess their graduate
development programmes.
47
Some sectors are also more likely to assess graduate retention than others (Figure 5.13). Assessing
retention was most common in the three sectors of Construction companies/consultancies (88.9%),
Banking and financial services (84.6%), and Retail (81.8%).
All respondents
67.3%
88.9%
84.6%
Retail
81.8%
Insurance company
80.0%
80.0%
IT & Telecommunications
72.7%
Law firm
71.4%
Public sector
66.7%
FMCG company
60.0%
57.1%
55.6%
52.9%
33.3%
Figure 5.13:
AGR employers who assess graduate retention - by sector Base = 153
Graduate retention
Less than half of employers (40.5%) were able to report on the average number of years that graduates
stay within their organisation. Of those who did know, the average length of stay was 4.9 years. Smaller
firms have the lowest retention rates (3.9 years) when compared to the overall average (Table 5.14).
Table 5.14: Average length of stay by size of
employer
Mean years
1-249 employees
3.9
250-999 employees
5.4
1,000-2,499 employees
4.6
2,500-4,999 employees
4.6
5,000-19,999 employees
5.2
5.5
48
Employers are also retaining their graduate hires. Almost all graduates (93.8%) were still in post within a
year of joining. This drops to 88.6% for those recruited 1 to 2 years ago and to three quarters (79.2%) for
those recruited 2 to 3 years ago. These findings mirror those of the Summer 2014 Review where the
average retention rate for graduates recruited one year ago was 94.8%; after three years this had dropped
to 79.0%. This suggests that overall retention rates appear to be stable.
Joined less than one year ago (113)
93.8%
88.6%
79.2%
Figure 5.15:
Average proportion of graduates recruited by AGR members still working for their organisations after particular
lengths of time
Overall, employers are not keeping good records of the share of graduates they retain. One-third (31.5%) of
respondents did not know the retention rate for graduates who joined less than one year ago and almost
three-quarters (72.2%) did not know the retention rates for those who joined 4-5 years ago. Given the
significant investment made to attract and develop great candidates, this lack of good records is an issue
worth further attention.
49
Appendix 1
Methodology and
respondent profile
50
Analysis
Statistical software was used to generate a variety of statistics including frequencies, means and medians20.
For each chart or table featuring in the Summer 2015 Review, we report the number of organisations
whose responses inform the findings as the base. Bases vary throughout the report as not all participants
responded to the same questions due to the routing applied. If bases are too low to ensure the reliability of
the findings or to maintain the anonymity of respondents, figures are not reported.
The 2015 Annual Survey includes comparisons between the 2013-2014 and 2014-2015 recruitment
seasons. Data for the 2013-2014 recruitment season relates to members year-end figures whilst figures for
2014-2015 refer to AGR members predictions as of June-July 2015 and so reflect a forecast, albeit a figure
which will be very close to the year-end figures. Comparisons between recruitment seasons are reported as
percentage increases or decreases. 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 postgraduate law courses prior to the commencement of their Training Contract. The vacancy levels reported
for the 2014-2015 recruitment season, therefore, relate to vacancies for which law firms are recruiting,
although graduates will not typically commence employment until 2016-2017.
19
Please note that previous AGR Summer Surveys have been conducted slightly earlier between May and June.
A frequency reports the proportion of respondents giving a specific answer. A mean (average) is calculated by
adding together all of our results and then dividing it by the total number of respondents. A median is the number we
obtain by placing all of the responses to a given question together 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.
20
51
Profile of respondents
A total of 205 AGR employers took part in the survey which represents a 66% response rate. It is estimated
that in 2014-2015 responding AGR members expect to offer a total of 24,126 graduate vacancies.
Two-thirds (69.1%) of AGR employers report recruiting just one intake of graduates per year; 16.7% of AGR
employers recruit more than one intake and one-tenth (10.3%) having a rolling programme of recruitment.
A small minority of AGR members (1.5%) recruit graduates on an ad hoc basis (Figure 6.1).
Rolling programme
of recruitment,
10.3%
Ad hoc recruitment,
1.5%
Other, 2.5%
One intake of
graduates per year ,
69.1%
Figure 6.1:
Recruitment methods of responding organisations Base = 204
A variety of business sectors responded to the survey ensuring that findings are representative of AGR
employer membership. Consistent with last years results the largest proportion of responses to the survey
came from Law firms (17.1%). This was again followed by Engineering or industrial companies (13.2%). This
year saw the proportion of companies from Banking or financial services increase (from 5.8% to 9.3%). This
was then followed by Retailers (7.3%) and Construction companies or consultancies (6.8%) (Figure 6.2).
52
Law firm
17.1%
13.2%
9.3%
Retail
7.3%
6.8%
IT hardware/telecommunication company
6.8%
Public sector
6.3%
FMCG company
5.4%
4.9%
4.4%
2.9%
Insurance company
2.4%
2.4%
2.4%
Oil company
Chemical or pharmaceutical company
Motor manufacturer
1.5%
1.0%
0.5%
Other
5.4%
Figure 6.2:
Business sector of responding organisations Base = 205
The majority (93.5%) of participating AGR members are large organisations with more than 250 employees.
Around one-fifth (19%) employ 20,000 staff or more (Figure 6.3).
20,000 employees or more
19.0%
5,000-19,999
23.5%
2,500-4,999
17.5%
1,000-2,499
17.5%
250-999
1-249
16.0%
6.5%
Figure 6.3:
Business size sector of responding organisations Base = 200
53
In terms of the size of the graduate intake, just under one-third of participating AGR members (31.7%)
expect to recruit between 1 and 25 new graduates. 70% expect to recruit a maximum of 100 graduates in
2014-2015. Around a quarter (24.4%) intended to recruit more than 100 graduates. Only 3.9% of AGR
members expect to recruit no graduates (Figure 6.4).
No graduates expected to be recruited
3.9%
1-25 graduates
31.7%
26-50 graduates
18.5%
51-75 graduates
13.7%
76-100 graduates
6.3%
101-250 graduates
13.7%
251-500 graduates
501 or more graduates
Dont know
6.3%
4.4%
1.5%
Figure 6.4:
Size of graduate intake Base = 205
The length of time that respondents had been running a structured graduate development programme also
varied. Of those AGR members who responded to the survey, around a third (32.7%) had been running a
graduate programme for over 16 years.
0-2
5.3%
3-4
11.3%
5-10
26.7%
11-15
16.0%
16+
Dont know
32.7%
8.0%
Figure 6.5:
Duration of graduate programmes running at AGR employers Base = 150
54