Graduate hiring falls 8% since last year, survey finds

Graduate hiring has fallen 8% since 2024, a survey has found, but apprentice hiring has increased by 8%.

This is the first time graduate jobs have fallen year-on-year since the pandemic in 2020, the Institute of Student Employers (ISE) said, while apprentice recruitment has been growing since 2015.

Because graduates still outnumber apprenticeships, the overall entry level job market among ISE’s member employers has fallen by 5%.

ISE questioned 155 of its large member employers who recruited more than 31,000 people at entry level in the 2024 to 2025 recruitment cycle on to formal graduate or apprenticeship programmes.

Stephen Isherwood, joint chief executive of ISE, said: “The balance between graduate and apprentice hiring is shifting for a number of employers as they look to diversify how they get talent into the business to meet skills shortages.”

He added: “This is a tough job market, but this doesn’t mean there’s no hiring at all.

“Our data shows that 92% of graduate hiring continues as normal. The current situation is difficult, but not as bad as the 2008 financial crash or during the pandemic.”

The employers who recruited students on to both pathways hired 1.8 graduates for every apprentice this year, down from 2.3 in 2024. ISE said this ratio is expected to decline further next year.

Graduate salaries have declined in real terms over the past decade, ISE said, while salaries for school and college leavers have seen modest real terms growth.

The survey found this year that the median starting salary reported for graduates was £33,000, a 2% increase from last year, and £24,000 for school and college leavers, up 3% from last year.

Employers reported receiving 140 applications per graduate vacancy, the same as last year, but significantly up from 86 in 2022/23.

For school leaver vacancies, employers reported receiving 89 applications per vacancy.

Government figures for apprenticeships report apprenticeship starts were up 2% in 2024/25 from 2023/24.

ISE said this difference reflects the role of large levy-paying employers with greater resources to develop apprenticeship schemes in the market.

Figures from the Office for National Statistics in August showed an increase in young people aged 16 to 25 not in education, employment or training (NEET) from the previous release.

The Government has been placing increasing importance on apprenticeships.

At the Labour party conference Prime Minister Sir Keir Starmer announced a new target for two-thirds of people to either go to university, further education, or do a gold-standard apprenticeship, by the age of 25.

The new target includes an ambition for 10% of young people to be pursuing higher technical education or apprenticeships that the economy needs by 2040.

Earlier this year, the Government changed apprenticeship requirements so those over the age of 19 would no longer be required to take English and maths functional skills qualifications in order to complete their course.

This is now at the discretion of their employer, in a move which the Department for Education said at the time would mean up to 10,000 more apprentices will be able to qualify per year.

A Government spokesperson said higher education delivered strong returns for most graduates, but university was not the only route to success.

“We’re creating multiple pathways to opportunity – whether through high-quality apprenticeships, further education colleges, or universities, as everyone deserves the opportunity to succeed,” they said.