Home > News > June 2003 > 30-Jun-2003

New graduates stay loyal for development, says survey

Despite concerns among graduate recruiters, loyalty levels among new graduate employees are high, according to a new report from the Institute for Employment Studies (IES).

The survey of 362 employers (employing more than 7,500 new graduates) showed that most new graduates stay with their employer for at least three years, with an average retention rate of 86% after three years. One-third of organisations had retained 100% of new graduates after three years. The highest retention rates are in the public and not-for-profit sectors, and the lowest in consumer services.

In their report, Measuring Up: Benchmarking Graduate Retention, IES researchers Claire Tyers, Sarah Perryman and Linda Barber reveal that planned long-term development is the key to protecting investment in new graduates. Retention is lower among graduates who take on more 'general' roles rather than those linked to a ladder of professional training:

• 90% of employers used training and development as a means of keeping new graduates
• 80% used mentoring/coaching
• 66% career/salary progression
• 48% flexible working
• 46% accelerated promotion
• 15% offered loyalty bonuses

New graduate recruits are highly valued, with 56% of employers admitting they had some new graduates they 'couldn't afford to lose'. But there is no real sense of a shortage of graduate talent, with only 30% of employers agreeing they had to 'fight with competitors over a small pool of good new graduates'.

Report author and IES Research Fellow Claire Tyers said: 'Students increasingly see themselves as consumers; they want a fast return on the investment they make in getting a degree. For employers, the main retention difficulties seem to occur at the lower end of the job market. Where structured career paths or professional training is part of the package, graduates are more loyal. Employers need to show graduates that the opportunities they want are available internally and that they don't need to leave in order to get where they want to go.'

Reasons for leaving

The organisations surveyed believe that most new graduates leave because:

• they are unhappy with the job or the employer itself (45%)
• unhappy with salary (30%)
• lack of work/life balance (27%)
• because they have found a new opportunity in a different kind of role (18%)
• they have found a better job in a similar role (14%)
• because of a performance issue (8%)

Support from line managers does appear to be a challenge, however, with only 37% believing they had managers who were 'good' at developing new graduates.

This research was funded by a consortium of leading private sector and public sector employers through the IES Research Networks.

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