Every year the UK’s leading blue chip recruiters hire ~50,000 graduates onto their graduate programmes, with almost a half of these roles being filled by students who have already done an internship at the firm. Invented in the 1950s, graduate programmes continue to flourish as one of the most sought-after and prestigious career routes after university.

Typically graduate roles are split between five dominant sectors – Commercial Law, Banking, Technology, Professional Services and Consulting.

However, over recent years, the high-growth sector has begun to challenge the dominance of these traditional industries in the war for the very best graduate talent.

The Rise of the Start-Up

From Silicon Roundabout to the bright young things tapping on their Macs in coffee shops, the rise in the London tech sector has been one of the main growth stories of the UK economy over the last five years. New business formation is at record levels with ~600,000 start-ups founded last year, of which about 200,000 are in London. The capital has just been named the third most important global start-up ecosystem, and the same report estimated that the value of the London start-up ecosystem is now $44bn, a staggering 10 times bigger than the global average. [1]

Several of these start-ups have already made their way to become unicorns (privately held businesses valued at $1Bn+) such as FinTech start-up Powa or media company Shazam. ARM Holdings, one of the world’s most powerful technology companies (which has its IP in 95% of the world’s smartphones) was acquired by Softbank for $32 billion – the U.K.’s largest ever technology transaction deal. In the broader UK economy, the sale of Skyscanner for £1.4BN was another seminal moment.

This growth in high-growth ventures has been fuelled by a variety of factors including government tax schemes (EIS and SEIS) and the arrival of leading (often American) Venture Capital companies keen to find the next big thing. What’s more, the private investor network is growing substantially with Angel investors now investing ~£1Bn+ a year in high-growth ventures. 

And with this growth, comes demand for talent.

Why not every start-up is good news

There is a clear and distinct difference between start-ups and the real job generators – known as ‘Scale-Ups’ or ‘Growth-Orientated Businesses’. Less than 4% of all UK start-ups have 10 or more employees 10 years later, which is why it’s the successful start-ups that really matter. [2]

Scale-ups are the start-ups that typically have a product that works and are able to grow – it’s these companies that generate the jobs. And talent is a top priority for scale-ups. 74% of scale-up CEOs ranked access to talent as one of their top three issues compared to 22% who cited access to venture capital. These companies know that hiring is everything and are massively incentivised to compete for the best. 

Don’t forget the other players

It’s not just high-growth businesses that are now seeking to find and hire the very best graduate talent, there are two other players within this sector that are disrupting things. One is graduates choosing to start their own businesses, the other is incubator and development schemes that have been set up to help mentor and train the next generation of UK entrepreneurs.

One highly successful example is New Entrepreneurs Foundation (NEF) – since being set up in 2010, the foundation has developed 155 entrepreneurs who have launched 62 ventures between them that have raised £10M. For many bright graduates who aspire to running their own business, doing a scheme such as NEF is a very real viable alternative to joining a graduate programme.

Other players also include the US tech giants – Amazon, Facebook and Google are all expanding their UK operations rapidly, and guess what, they all want to hire the very highest quality graduates.

So, what can you learn from the High-Growth Sector

If you’re looking to hire the very best graduates, here’s three things you can learn from the high-growth sector.

1. Talk about Growth

As revealed in our 2018 Research Report, ‘What do graduates want?‘ students today look for companies that are fast growing and innovative. This is one of the key reasons high-growth businesses are able to attract talent so easily – they’re growing quickly which brings a sense of excitement and challenge to the status quo. They are able to appeal to the things graduates value most.

Millennials are a generation that want to have an impact and be part of something successful. Talking as much as possible about where your organisation is going, its recent wins and how it’s changing its market will help ensure you appeal to the best and brightest.

At the same time graduates are also looking for professional training and development opportunities in their first role after university – and that’s something we know lots of leading recruiters we work with are able to offer.  If you’re able to combine both this and a dynamic, innovative and fast-paced environment, and communicate this to candidates, then you’re in an excellent position to attract high-performing talent.

2. Deploy Your People

Our research also revealed that ‘Inspiring Management’ is a top three factor that graduates want from their future company. They also look for organisations that have a friendly and respectable work environment.

High-growth businesses are incredibly effective at using hiring managers to engage future talent. When business leaders are asked what keeps them asleep at night – hiring the best talent is often their first response [3]. They’re not afraid to communicate continuously how important people are to their business

82% of Bright Network members feel it’s important to meet a firm before applying and 25% said that they would be put off applying if they had a poor or unimpressive experience when meeting representatives from a firm.

So, as much as possible, get your hiring managers out in the field to inspire and engage this talent pool. If you don’t, your competitors will. And our Bright Network FESTIVAL on Friday 7th September is a great place to do this.

3. Stay open and move fast

With the market for graduate talent more competitive than ever, traditional graduate recruiters are experiencing a rapid rise in graduates not only rejecting job offers, but also reneging on offers.

One advantage that scale-up businesses typically have is that they lack graduate programmes and hire on demand, which means they aren’t tied-down by year-long recruiting cycles. This makes life easier for scale-ups as ~70% of Britain’s ~500,000 graduates a year will leave campus without a graduate job lined up, instead these graduates choose to focus on their studies in their final year and job hunting once they’ve graduated, making easier pickings for scale-ups.

The more nimble your hiring efforts can be the better as it will allow you to capture talent that has just left university, and when you do find it be ready to screen, offer and close it quickly. The average length from applying for a graduate role at a blue-chip to receiving an offer is approximately 12 weeks, so the faster you can take that talent out the market the better.

To conclude 

In a short period of time scale-up businesses have become a major acquirer of top-tier graduate talent in the UK – their fast moving nature and disruptive DNA makes them a natural destination for high quality millennial talent that wants to have an impact in the world of work.

Much like the markets they’re disrupting, these businesses are bringing fresh ideas and innovation to the graduate recruitment world. The best graduate employers will learn from scale-up businesses and use their insights to take their game to the next level to make sure they stay ahead of the pack.

Any questions?

If you’d like to chat more about graduate talent or any of the points I’ve raised in this article – please get in touch – james@brightnetwork.co.uk / @JamesUffindell

Appendix

[1] Global Startup Ecosystem Report, 2017
[2] Scale-up Report, Sherry Coutu, 2014
[3] The 3 Things CEOs Worry About the Most, HBR, 2015

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