Short term cost savings at a greater expense?

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The real cost of reducing your graduate intake.

 

There’s no denying that the past few months have truly turned the world upside down, resulting in lack of certainty and financial insecurity for many companies and individuals across the globe. We’re still not sure when or how quickly markets will recover but history has taught us that they will bounce back and, without wanting to speak too soon, we are seeing definite signs of life. Businesses are coming out of hibernation and rolling out plans to return to offices; travel restrictions are lifting, and deal activity is rising.

Many companies are understandably still cautious about hiring, with attention predominately focused on the top and bottom lines, existing teams, and business pipeline. It might seem counter-intuitive to think about recruitment and the increased costs that go with it but, as we know, human capital is at the heart of a business and a key factor in its success. In a downturn also hides opportunity – as Churchill said: “never let a good crisis go to waste”. For years we’ve been talking about the war for talent and all of a sudden, firms have dropped their proverbial weapons and retreated from the fight. The talent still exists but with far less competition compared with recent years. Now isn’t the time to withdraw, companies should be thinking about talent acquisition plans and consolidating their brand image.

This then raises the question of why those hiring plans should focus on graduates?

We know that hiring graduates is a long-term strategy, which can feel hard to commit to when there is so much short-term uncertainty. However, there’s value in planning ahead – both interns and graduates are crucial to hiring strategies, for many reasons.

It’s true, interns and graduates require upfront investment – both in time and financially – but the return on investment pays off with long-term results, and very quickly. We spend a lot of time trying to understand Gen Z. As a group they are known to be open to new ideas, proactively seeking out learning curves and they can rapidly adapt to change. In the current market amenability, the drive to work hard and ambition aren’t traits to be overlooked; it’s often beneficial to hire for attitude and train for skill.

Graduates can assimilate information swiftly and won’t shy away from responsibility because they care about their own progression and personal development. They’re also tech innate and the pandemic has highlighted and accelerated the role technology plays in our day-to-day lives. Being able to navigate new systems and technologies will come more naturally to graduates, offering yet another competitive advantage. All this suggests that when things pick up, we suspect that the winners will have execution capabilities and a junior team to provide the “heavy lifting”.

Additionally, many companies still remember the impact of the 2008/09 crisis where junior hiring was drastically hit, leaving a void at the bottom of the career ladder. It wasn’t until a few years’ down the line that the wider business really felt the impact. The limited pool of juniors inevitably dispersed, resulting in a huge skills gap in the middle of the organisational pyramid. 

History has a way of repeating itself in different contexts.

Individuals are currently evaluating their priorities and making conscious lifestyle changes, which we expect will result in an additional skills shortage in junior to mid-level management. Meanwhile, the results from our Gen Z survey showed that work-life balance is the lowest priority at the start of their careers, meaning they’ll offer employers their full commitment. Whilst cutting graduate recruitment might feel like a cost saving now, we’ve seen that this leads to expensive hiring in future when firms lack homegrown experienced talent.

There is also a strong correlation between high potential new joiners and top performers who have developed through the company as a graduate, so now is a real opportunity to hire the future leaders of the business and shape them accordingly. Having a blank canvas of capable individuals who can be trained internally and act as culture carriers for the future has been proven to be an effective part of a longer-term attraction and retention piece.

Investing and engaging with junior talent will create a strong brand image and leave a positive impression in the market. It’s also an opportunity to take responsibility for diversifying your talent pool, which must start at the grass roots – and given the volume and breadth of available candidates it really is a unique time to snap up diverse talent like never before.

With individuals evaluating their priorities, your Employer Value Proposition and company culture are going to become more important than ever in any talent attraction and retention strategy. Hiring from the bottom should open up internal promotion opportunities, which is encouraging to those who have already shown commitment and should increase staff retention, whilst also creating positive morale and cohesive team dynamics.

Graduate recruitment is no meagre task and with firms reviewing their operating model and optimising their ways of working, it’s worth considering who spends their time where – not just on talent selection but across all business processes. In order to maximise performance, employees should be focusing their time and efforts on their core priorities. Dartmouth has faced its own challenges in the current business climate but when it comes to junior hiring, we’re here to help cater to our clients’ needs. We work with our clients on everything from branding and EVP through to recruitment design and assessment, offering the bandwidth to cover the market and the expertise to identify your future leaders. 

We know the current economic outlook still shows some tough times ahead, but many companies have made their mark during periods of economic turmoil – Apple released the iPod in 2002, straight after the dot com bubble and look where they are now… No one has a crystal ball, but we have an inkling that the firms who dare to be radical, adaptable, and imperturbable will most likely be those who thrive on the other side.

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