The Institute of Student Employers (ISE) has found that young people aren’t staying in their jobs as long as they used to before, and this is a looming threat for employers.
Graduate turnover during the pandemic climbed to the highest level since the ISE started collecting the data in 2011, while high inflation and stagnating salaries could further heighten this issue.
Turnover rates for graduates have been on an upward trend since 2011. Companies are now retaining 72% of their graduates 3 years after they join, down from 79% in 2011.
More young people are citing dissatisfaction with pay as a reason for moving on, increasing to 40% in 2022 compared to 28% in 2021.
Staff turnover is highest in the legal sector with just 28% of graduates retained after three years. This is in stark comparison to health and pharmaceuticals, which has an 80% graduate retention rate.
The turnover of staff straight out of school or college – typically those recruited onto apprenticeships – has also been rising. Retention has sunk to the lowest point with only 71% retained after 3 years, a similar level to graduates.
A third of respondents said that the pandemic had increased the turnover of young people in their business, with employers facing a particular challenge in retaining young people with Black and Asian heritage, and those experiencing mental health issues.
As a result of retention issues, the majority (63%) of employers have implemented initiatives to try to improve the situation, but it now seems that salary may be the main determining factor.
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