Recruitment agencies and recession

It is a beautiful day - as usual - here in Manchester. 

And on a day like this I am sure you, like me, are thinking, 'Hmm, I wonder how the recession affected the use of recruitment agencies by graduates?'

Yes, I knew you were.

This is an area that has interested me for a while - the whole mechanism by which graduates find their first job and, in particular, how networking (that's another post) and recruitment agencies get involved.

It will doubtless come as no surprise to hear I'll be using DLHE, as it asks how graduates found their current job, it is ideal for the purpose.

So, to data.

The four commonest methods for graduates to find their first job are outlined above. As the recession took hold, the proportion finding work from existing employers rose sharply, and those getting work through agencies fell.

Now, obviously this was not a uniform fall. In fact, some parts of the country were more affected than others.

This shows the number of employed graduates (working after six months) in each region known to have found their job through a recruitment agency in each year.

Apologies to readers from Scotland, Wales and Northern Ireland - in fact with the exception of Scotland (modest fall), the already-low numbers didn't budge much, and Scotland had the lowest rate of use of recruitment agencies anyway. With the exception of the NE of England, which had an unusually low use of agencies, they are much more widely used in England. So we focus on them because there is more to see.

So, there is regional fluctuation and a pretty significant fall in the use of agencies in  London and the South East.

So, which sectors were most affected?

Glad you asked.

This looks at the biggest falling industrial sectors by number. No point looking at a 100% fall in a sector where 8 graduates used agencies. At least 200 graduates got a job in each of the sectors through a recruitment agency in 2009.

Now, we know the recession has been a rotten time for the construction in general, and so it seems for agencies. Financial services, and insurance and related sectors also suffered very badly. But on the quiet, it also got a lot harder to get a job in publishing and advertising using agencies. And also in the public sector.

And bear in mind that not only is this a very important method for graduates to find work, but it is often the most important method for graduates who don't already have contacts in an industry to get into it. So one thing this could be showing is how much harder it became to get into some of these industries without a pre-existing contact as a result of the recession.

There is obviously a lot of extra work that could be done on ideas like this, but the recession is not just going to change the number of people who got jobs. It also affected - and will affect - the way they got them.

We will have to think hard about the details of the advice we give to students and graduates. And if anyone has any insight into how the role of recruitment agencies is changing then I'd be very interested to hear them. After all, this is one of the most important ways that graduates find work.

Graduate earnings

Apologies for the inadvertent once-a-month posting schedule. And I wonder where the readers have gone.

Anyway, two stories on graduate salaries out this morning. The first is this analysis by Incomes Data Services, finding that graduate starting salaries are likely to be static again this year.

The average starting salary quoted by IDS of £25,166, tells us that their sample is very blue-chip and probably London- and finance- focused, but the basic point is that the market remains tight for employers and, hence, graduates and will probably remain so for a little while. 

IDS also mention that employers are looking to recruit more than they did last year - in line with AGR predictions, and also makes the unsurprising point that public sector recruitment looks set for a reduction.

Meanwhile, this analysis by the ONS is interesting. The ONS have analysed earnings data across the population (aged 22 to 64) between 2000 and 2010 and have concluded that degree holders, on average, earned £12,000 a year more than those without a degree.

To quote:

• Earnings are similar for those aged 22 at around £15,000, regardless of whether they have a degree or not
• For those without a degree, earnings increased for each year of age, levelling off at the age of 30 and peaking at the age of 34 at £19,400
• For those with a degree, earnings increased faster for each year of age. They also increased for longer, levelling off at the age of 35 and peaking at £34,500 at the age of 51. After this point average wages decreased as it is more likely that the high earners were able to retire and leave the labour market

Some other interesting points:

• graduates aged 22 to 64 had median salaries of £29,900 compared with £17,800 for non-degree holders. I would guess people would think median salaries were rather higher than that.
• For women without a degree earnings levelled off at the age of 31, with earnings for women with a degree levelling off around the age of 33
• For men without a degree earnings levelled off at the age of 34, with earnings for men with a degree levelling off around the age of 39. ("Bother", says 40 year old labour market analyst)
• Highest salaries for both graduates and non-graduates were in banking and finance, with the graduates averaging £37,300 and the non-graduates £20,300

An interesting insight into the labour market and a useful demonstration that the benefits of a degree take some time to fully realise.