Graduate hiring among large employers fell by 8% in the 2024-25 cycle, while apprenticeship hires rose by 8%, the Institute of Student Employers (ISE) found. The survey covered 155 large member employers who recruited more than 31,000 people onto graduate or apprenticeship programmes. This marks the first year-on-year fall in graduate vacancies since the pandemic in 2020, ISE said.

Because graduates still outnumber apprentices, the overall entry-level market for ISE members declined by 5%. 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 survey shows the ratio of graduates to apprentices at 1.8 to 1 this year, down from 2.3 in 2024, and ISE said this ratio is expected to fall further next year. It also reports a median starting salary of £33,000 for graduates (up 2% from last year) and £24,000 for school and college leavers (up 3%). Employers reported 140 applications per graduate vacancy, the same as last year but higher than 86 in 2022/23, while school-leaver vacancies attracted 89 applications per vacancy. Official figures indicate apprenticeship starts rose by 2% in 2024/25 from 2023/24. ISE said the difference reflects the role of large levy-paying employers with greater resources to develop apprenticeship schemes. The Government has been placing increasing emphasis on apprenticeships. At the Labour party conference, Prime Minister Sir Keir Starmer announced a target for two-thirds of people to go to university, further education, or pursue a gold-standard apprenticeship by age 25, with a 2040 ambition for 10% of young people to be pursuing higher technical education or apprenticeships. Earlier this year, the Government changed apprenticeship requirements so those over 19 would no longer be required to take English and maths functional skills qualifications to complete their course; the Department for Education said this could mean up to 10,000 more apprentices will be able to qualify per year.