Graduate turnover during the pandemic has climbed to the highest level since Institute of Student Employers (ISE) started collecting the data in 2011.
ISE warns high inflation and stagnating salaries could further heighten issues this year.
Since 2011, turnover rates for graduates have been on an upward trend.
Now, however, companies are retaining 72 percent of their graduates three years after they join. This is down from 79 percent in 2011.
Dissatisfaction with pay is the main reason graduates cire for moving on, increasing to 40 percent in 2022 compared to 28 percent in 2021.
When indexed to inflation, graduates earn less now than they did in 2008/9. At point of hire the average salary for a graduate scheme is £28,563, increasing to £40,000 after three years.
The legal sector sees the highest staff turnover, with only 28 percent of graduates remaining after three years.
Pharmaceuticals, on the other hand, has a 80 percent graduate retention rate. This is in stark comparison to health and pharmaceuticals, which has an 80% graduate retention rate.
What are the main factors contributing to this?
A third of respondents said that the pandemic had increased the turnover of young people in their business.
Employers face challenges in retaining young people with Black and Asian heritage, and those experiencing mental health issues.
The majority (63%) of employers have implemented initiatives to improve retention this year.
Also, more young people are leaving got a different type of work or career, according to this year’s ISE Student Development Survey. In the survey, 44 percent cited this as a reason, compared to only 20 percent in 2021.
Also, 40 percent of respondents quit their job due to the location.
Major retention challenges ahead
“Young people aren’t staying in their jobs as long as they used to and this is a looming threat for employers this year,” says Chief executive at ISE, Stephen Isherwood.
“Combined with high inflation and a reduction in spending power, dissatisfaction may create major retention challenges for student employers as workers move roles to seek a pay increase. This could lead to salary becoming the main driver when young people choose a career or employer.”
Staff retention overall is low
The tight UK labour market sees employment vacancies hit a twenty-year high, with over half (54%) of employees are considering leaving their current role, according to WTW’s latest Employee Attraction & Retention research.
More than half of UK respondents (58%) cited pay as a top reason they would look for a new job. Two in five (43%) would leave for a pay increase of 5 percent or less. One in five employees (22%) would even move to a new job for the same pay.
What does this mean for HR?
“The findings suggest that employees continue to job hunt at the same pace as last year and that the labour exodus is not yet over,” said Work and Rewards Leader, Alasdair Wood.
“There’s a pressure for employers to find ways to better meet their workers’ needs, particularly on issues such as wellbeing, engagement, skills development and career structure in order to tip the scales, so that employees choose to stay,” adds Wood.