Those close to recruitment and attraction will know that the battle for talent has been tough for some time, and the post-pandemic working landscape has provided new hurdles like quiet quitting, the search for purpose, and the widening skills gap for hiring and attraction teams to navigate.
In fact, if the headlines are to be believed, hiring has never been harder. The number of firms reporting no qualified applicants for their open positions has reportedly hit a record high, and this lack of incoming talent is additionally compounded by rising turnover rates: according to Gallup’s 2023 State of the Workplace Report, 51% of employees currently feel some level of intent to leave their job, and 60% report themselves to be unengaged at work.
Now, in addition to these challenges, recent demographic data has highlighted a concerning emerging trend: the number of hireable graduates is shrinking, and as a result, finding the right talent in an already competitive market is only going to become harder. This phenomenon is being driven by two main factors:
One of the primary factors contributing to the shrinking early talent hiring pool is the changing demographic landscape: according to the United Nations’ World Population Prospects, the global population growth rate has been steadily decreasing, and some regions are even experiencing negative population growth. A study conducted by the National Centre for Health Statistics in the United States revealed that the general fertility rate has been declining since 2007. Combine this with the fact that 10,000 boomers retire every day, these shifting demographics have a direct impact on the number of potential graduates entering the workforce.
In the UK, the Higher Education Statistics Agency (HESA) has reported a decline in the number of undergraduate enrolments for five consecutive years, starting from 2011. According to HESA, this decline can be attributed to a combination of factors, including changing demographics, financial constraints, and a shifting perception of the value of higher education. Studies into Gen Z attitudes towards higher education make it clear that degrees are no longer considered a necessity: the proportion of Gen Z respondents who agree that higher education is valuable declined dramatically from 79% to 64% between 2019 and 2022.
A similar study by Gallup provides further insight into the reality prospective students face in the US: enrolment rates for two- and four-year degree programs have declined between 2015 and 2021, and of the respondents who never enrolled or had dropped out of enrolment, over half cited the cost of a college degree as a very important reason for not pursuing further education.
Faced with a potentially global shortage of skilled early talent over the coming years, here are three ways your organisation can navigate the shrinking talent pool phenomenon:
Declining fertility rates and population growth have direct implications for the number of potential graduates entering the workforce. As the number of graduates decreases, your organisation will need to broaden its definition of early talent to stay competitive. Early careers should not be limited to just young people, but should also encompass individuals who are early in their careers, regardless of age.
Here are some unconventional groups to consider when broadening your definition of early talent:
By expanding the definition of early talent to include these diverse groups, your organisation can tap into a broader pool of skilled individuals and benefit from their unique perspectives and experiences, providing a wider supply of talent for your workforce.
Another factor affecting the hireable graduate pool is the growing mismatch between graduate skills and job market demands. The rapid pace of technological advancements requires a workforce equipped with the latest skills and knowledge, but educational institutions often struggle to keep pace with these changes, resulting in a gap between the skills demanded by employers and those possessed by graduates.
This means that even if the graduate talent pool weren’t shrinking, there’s no guarantee that available graduates would have the right skills for your organisation: 44% of companies cite lacking work-ready soft skills as their biggest challenge with today’s early talent cohorts, and The World Economic Forum predicts that by 2025, over 50% of all employees will require significant reskilling and upskilling to keep up with technological change. This shift creates a challenge for organisations hiring graduates who may not possess the skills needed to meet the demands of their roles.
The solution? Upskill your people in the skills your organisation will need in the future. New skills are emerging at an unprecedented pace. Unlearning. Positive Mindset. Partnering with AI. The list goes on. Successful L&D functions aren’t only training today’s workforce; they’re training their five- to seven-year future workforce. That means anticipating emerging skills and getting ahead of the game.
Not sure where to start? Our Skills Suite can help.
Running parallel to the shifting perceptions of the value of higher education is a shift in how people are defining success and career advancement. The 2022 NSHSS Career Interest Survey of over 11,000 students found flexibility ranked top 3 in the things Gen Z are looking for in their employers.
Dubbed by Fortune as “Quiet Ambition” (though not as insidious as Quiet Quitting or Quiet Firing), this trend describes individuals who don’t explore traditional and linear routes to the top of their careers, but rather seek to build careers that “fit the shape of their lives, not the other way around”.
Forward-looking organisations are already formulating ways to support this emerging trend: recognising that their peoples’ expectations around careers were changing and that a traditional, linear career path to Partner was no longer universally appealing, EY launched a pioneering Career Framework to provide their people more flexibility and variable pace of progression based on their personal needs and career goals. The framework launch included interactive guides and communications that clearly defined EY’s role types, bringing each to life through illustrative career journeys featuring real EY people stories.
By providing a varied and different formulation of what it means to work for you, your organisation can tap into a broader pool of skilled individuals, while also providing your people with the choice and flexibility that today’s talent desperately crave.
With graduates becoming harder to find, it’s never been more important to ensure those entering your organisation are given the best start possible. Our Programmes Toolkit explores dozens of modular solutions to help your new early careers thrive as they cross the threshold into their new role, new organisation, and new world of work.