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The number of graduate jobs dropped by 12% in 2020 with the majority of employers anticipating further decline next year, reports Institute of Student Employers (ISE).

ISE Student Recruitment Survey 2020 reports that this is the largest fall in graduate recruitment since 2008/9 when the market contracted by 25%1. While patterns evident in the last financial crash are emerging, it is not straightforward repetition.

Mirroring 2008/9, some sectors have reduced hiring considerably while others such as the charitable and public sector has increased hiring (4%). Graduate jobs in retail and FMCG have seen the largest cut at 45%.

IT and engineering continue to struggle to source the talent they need. Nearly half (42%) of employers found it difficult to fill IT jobs in programming and development and 35% struggled to recruit engineers. Heavy competition and a lack of graduates with the necessary skills were the most common reasons.

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The data also shows the significant increased competition for jobs as seen in 2008/9. This year employers received 14% more applications for graduate roles and 9% more for internships and placements. Applications for school and college leaver roles also increased – by 8%.

The nature of the pandemic has meant that employers have had to make significant, and unprecedented, adjustments to their student recruitment. As offices closed, employers moved attraction, selection and development as well as the delivery of internships online.

Many have been forced to significantly reduce internships and placement opportunities this year – 29% and 25% respectively – the largest drop since ISE started collecting this data in 2010.

Employers also have a broader range of entry-level opportunities to manage due to the Apprenticeship Levy.

As a result the opportunities for school and college leavers (largely apprenticeships) have been relatively stable this year, increasing by 6%.

Similarly to graduate roles, employers found it difficult to recruit school and college leavers into IT programming as well as in more skilled trades. This was mainly due to the location of job opportunities and that school and college leavers find it difficult to travel or relocate to take them up.

Stephen Isherwood, chief executive of the ISE said: “We can see patterns from the last financial crash emerging, but the effect on the student labour market is not a simple replay of 10 years ago.

“Employers have had to make significant adjustments. As a result, graduate jobs do not appear to be collapsing and school and college leaver recruitment is holding up, but the decline in internships and placements is more worrying. Around half of placement students get rehired, so diminishing these roles damages the talent pipeline

“We mustn’t forget the students or ignore the lived experience of those who are struggling to cope with the crisis and to get a good start to their career. Covid-19 has turned many lives and career plans upside down. We must continue to offer opportunities so young people can develop and experience work, even if it is from students’ kitchen tables. And we look to the government to do all it can to ensure that the pandemic does not disrupt this key career transition from education to work.”