The implications of the Economic Environment on the Graduate Industry

Whether it is Melbourne, Sydney, Brisbane, Canberra, Adelaide or Perth, the one constant theme that we have noticed on our travels is that the landscape has changed.

For how long? Well how long is a piece of string!

If we look at the Graduate industry over the last 6 or so years, it is evident that as an industry we experienced incredible and constant growth as our organizations year after year looked to satisfy their graduate appetites.

Using figures from the 2009 AAGE Employer Survey and applying them to an example (see table). It is evident that an organisation that was taking on 10 (small company) or 100 (large company) graduates back in 2002/2003 would have experienced at least a 100% growth in average numbers over the last 6 years. So a small organisation that started out with 10 graduates would have grown to 20 and a larger organisation grown from 100 to 206.

This is significant growth in graduate numbers but just as important the growth in infrastructure and investment by organisations to attract, select, develop and retain these numbers longer term.

So we are in the second quarter of 2009 and figures as fresh as October 2008 from the AAGE Employer Survey were suggesting a stabilizing of the market and potential for 2% growth. How quickly things change in the 6 months since the survey and a figure of 15% negative growth would not be a surprise at all.

The reality of the situation based on the voice of the market, is that private sector employers across all states will predominately review their 2009/10 intake numbers with most employers facing the reality of their graduate numbers shrinking as we go through this phase of corporate restructures, downsizing and financial consolidation. Most organizations are reducing their intakes or trying to hold onto their 2008 number. In some unfortunate cases graduate programs are being reviewed and question marks being placed on entire intakes and programs.

Interestingly, there still seems to be a number of small to medium employers who are for the first time, actually looking to get involved in the market and seize the opportunity with many employers reporting graduate applications to date being up 2 fold.

Surprisingly in the government sector, whilst the same rigor is being placed on budgets and headcounts it appears most government sector programs will maintain if not grow their graduate numbers which is pleasantly surprising and provides organizations with the opportunity to consolidate or polish their existing graduate brand.

The AAGE in response to the economic environment, has just released its February Snapshot Survey with the key points coming out indicating;

• 45% of employers are expecting to maintain the same intake numbers
• 43% of employers are expecting to reduce their intake numbers by at least 10%
• 8% of employers looking to increase their intake numbers
• 4% of employers not planning on an intake
• 6% increase in graduate salaries above the cost of living

Of particular interest is the fact that 54% of employers have stated that they will need to run their programs on less or significantly less money than 2008. Taking into account that organisations will spend less by reducing their intakes, we can not shy away from the ongoing investment required in terms of ongoing branding, attraction, selection and most importantly graduate development.

As an industry and as graduate managers there is a very clear move to add value to our business and ensure return on investment. This will require some savvy and innovative thinking in terms of our strategies, output and alliances with suppliers.

Some Tips for surviving, adding value and showcasing ROI!

• Make sure that you are measuring your ROI in terms of your attraction and branding strategies. Review the value of advertising in newspapers. Is it really the best way to spend your campaign dollars? Tailor your advertising using a graduate specific directory. Make contact with your university careers units and advisors and speak about ways to customise a targeted approach. Why not look into the value of specific student societies. There are some massive savings to be made by simply networking and speaking with the right contacts.
  

• Review you selection processes, value add and associated costs. Speak to your suppliers and demand excellence in service and innovation. Review your psychometric assessment costs and ask for more value. Can your test data be used to create development profiles and add value? Run assessment centres in house. Is your process efficient?
  

• Is your development program targeted? Have you designed your development program using data and information to profile your graduates development needs or are you throwing a dart at a list of graduates workshops for the sake of it? Can you use data you collected at selection to improve your understanding and profile your graduates?
  

• Measuring Success. Are you providing your business with a Post Implementation Report? Are you including cost per hire(CPH) figures by stage, application numbers, gender splits and process improvements including year over year comparisons and cost savings? An effective way to showcase the success of your graduate program is to map your intake numbers year over year, showcase your retention figures but most importantly showcase graduate performance and graduate transition and development through the organisation by band or level if possible.
  

For more information on how to add value to your strategies please contact Fusion Graduate Management Solutions at info@fusiongms.com.au