The Graduate Recruitment Market in 2018: What SMEs Were Missing
Step’s 2018 research looked at where UK graduates actually end up working, and why so few students knew about opportunities with smaller businesses. This summary sets out the key findings for SME employers.
Download the full report (pdf)
TL;DR: Step’s 2018 research found that the vast majority of graduates (94%) end up working for smaller, lesser-known employers rather than large graduate schemes, yet most students remained largely unaware of the opportunities SMEs offered while still at university.
How Many Graduates Actually Join Large Graduate Schemes?
Using Institute of Student Employers data from 2017, Step calculated that the UK’s largest graduate recruiters hired around 31,630 graduates that year, against roughly 500,000 new graduates entering the market annually. That meant only about 6% of graduates secured a place on a large, formal scheme.
Key takeaway: The remaining 94% of each year’s graduates build their careers with smaller or less well-known employers, not as a fallback, but because that’s simply where most of the roles actually are.
Why Weren’t Students Finding SME Opportunities on Campus?
77% of undergraduates said they were unaware or very unaware of smaller employer opportunities while at university. At careers fairs, larger employers with bigger budgets and flashier stands tended to dominate attention, while fees charged to attend some fairs (ranging up to £1,400 at the time) made it harder for SMEs to get in front of students at all.
Key takeaway: The barrier wasn’t a lack of SME opportunities, it was a lack of visibility for them within the university careers ecosystem.
Did Graduates Actually Want to Work for Smaller Businesses?
41% thought their career prospects were better with a larger employer, but 34% thought they were better with a smaller one, and many specifically sought out SMEs for the hands-on experience and early responsibility they offered.
Key takeaway: Graduates weren’t put off by smaller businesses; they often just didn’t know those options existed.
What Mattered Most to Graduates When Choosing a Role?
Progression was the strongest factor in both the 2015 and 2017 polls, rising from 42% to 49% of respondents naming it as most important. Salary fell from 34% to 22% over the same period, while location rose from 20% to 24%, which Step linked to rising concern about housing costs and affordability.
Key takeaway: If a smaller business can’t match a large scheme’s salary, demonstrating a genuine path for progression may matter more to candidates anyway.
Were Graduates Overestimating How Hard the Job Search Would Be?
53% of graduates expected a job application to take an hour or more, and 45% expected it to take six months or longer to secure a graduate role, a notably pessimistic outlook relative to Step’s own experience placing graduates faster than that.
Key takeaway: Graduates’ expectations about timeframes were often more pessimistic than reality, a pattern worth bearing in mind when interpreting candidate anxiety during your own process.
FAQs
Q: Is the 94%/6% split still accurate today? It’s a 2018 calculation based on 2017 ISE data, so treat it as a historical illustration rather than a current statistic. The broader point, that SMEs collectively hire far more graduates than headline-grabbing schemes, has remained a consistent theme across Step’s research since.
Q: Do university career fairs still charge SMEs to attend? Some do, some don’t; this varied by institution in 2018 and is worth checking directly with any university you’re targeting, since policies change.
Q: What’s the most actionable finding for a small business today? Visibility, not value proposition, was the bigger barrier in this research. SMEs don’t necessarily need a better offer than large employers, they need a way to actually reach students who don’t know they exist.
Article produced by Step Recruitment Limited | www.step.org.uk
