In the past five years, South Africa has seen a significant increase in the number of applications received for graduate vacancies across sectors. This trend reflects the growing interest among students and recent graduates to secure quality employment opportunities in their chosen field. As the job market for top talent becomes increasingly competitive, many young professionals are looking to gain valuable experience and advance their careers by starting out in graduate roles. This article will examine the five-year trend in graduate applications and offers and explore what this means for employers seeking to recruit top talent.
Table One, below, analyses applicant numbers for graduate vacancies between 2018 and 20221. There is clear evidence that application numbers are growing with an unsurprising spike in both the median and average number of applications per vacancy following Covid in 2021 and 2022. Currently, the average number of applications is sitting at around 82 per graduate position.
The burning questions, of course, are what is the quality of applications like and how many are being converted into successful offers? Table Two analyses the percentage of students that make it through the various stages of employers’ screening processes – from first interview to offer stage. Despite growing applicant numbers, the percentage of applicants invited to first interview has remained relatively stable between 18% and 20% over the same five-year period. This suggests that there has not been much change in the quality of applicants. Offer rates have dropped slightly, from 53% to 48%, despite growth in graduate vacancies, further suggesting that there has not been a commensurate increase in the quality of applicants.
Nine out of ten students who receive an offer are accepting it, compared to eight out of ten in 2018. Whilst employers should see this as encouraging, the sad fact is that 13% of candidates are reneging on offers, a number which has doubled over five years.
We investigated these trends further and asked two large employers – one in financial services and a second in the auditing/professional services sector what their experience has been. Both employers confirmed a definite increase in graduate applications, with the audit firms’ applications peaking in 2022 at a significant 800 more than the previous year! During the Covid years there was heightened information sharing across digital platforms, coupled with broader reach as virtual events were the norm. Interestingly, our financial services employer experienced an increase in the quality of applicants in the scarce skills areas, perhaps due to more introverted learners coping better with online learning. In higher volume roles, however, both employers have witnessed a decrease in the quality of applicants, with many students extending their degrees and/or not having coped well with online learning.
Both employers have increased their use of assessments as part of their selection process – partly to deal with higher volumes but also because they have elevated the kind of candidate they are looking for – with increased emphasis on critical thinking, business acumen, and technological savvy.
Reneges are real, particularly in the Auditing profession with the 2022 SAGEA Employer Survey1 revealing a 38% renege rate, compared to the next highest rate of 14% in Consulting, Engineering, Mining and Manufacturing. With reneges this high, our employer undertook a detailed investigation to understand the reasons for this. They learned that students are cancelling offers due to overseas opportunities or receiving offers from banks and TOPP employers, all of which tend to pay higher salaries. The only consolation is that most students do communicate their intention to cancel an employment contract, rather than simply not turning up on the first day of employment. Knowing that reneges are likely, many employers are carefully calculating the extent to which they over-offer.
As we advance, post-pandemic and grapple with the impact of loadshedding as well as a looming global recession, we are interested to see whether these trends continue as we embark on our 2023 Employer and Candidate Insights studies.
*The SAGEA 2022 Employer Benchmarking Insights is based on responses from 69 of the leading graduate employers in the country and explores the size of the graduate market, how Covid has impacted the market and what employers are doing to attract and retain graduates.