Summer 2008 Newsletter

Welcome to the late Summer edition of the Futureboard newsletter - our seasonal round-up of marketplace trends, best-practice and an opportunity to share perspectives of both candidates and employers. Click on the links below:

• Graduate talent management in an economic slowdown
• The A* cometh...
• Top ten tips for targeting students on campus
• Are you looking for high-potential or high-performers?

Graduate talent management in an economic slowdown

In the last few months we have read more and more about the global economic slowdown and one can't open a newspaper without reading the words 'credit crunch'. In August, the Bank of England released its latest growth forecast, showing the economy contracting in the third quarter of this year with only minimal growth thereafter.

How is this affecting graduate talent management? A review of our current client base indicates that over 80% of companies are maintaining the number of recruitment hires in the forthcoming year. This is further supported by the Summer AGR 2008 survey results, which reported vacancy growth of 11.7% for the academic year ending June 08 and the opinion generally amongst AGR recruiters is that it is false economy to 'turn off' hiring talent at this level, even in an economic slowdown.

It is still mainly financial services/property organisations that are deferring start dates or cutting numbers for the forthcoming year, eg Allied Irish Bank has told its recruits who were offered jobs before they left university this summer that the roles are no longer available and Citigroup is cutting its graduate recruitment programme by 5%.

Interestingly, around 20% of current clients are scrutinising costs with regards to talent development and are looking at how they can better measure the ROI of their graduate schemes. The other challenge cited was keeping graduate development aligned with business objectives and the increasing need to ensure the right calibre of individuals are hired in the first place. One could argue that business slowdowns are good for talent organisations - as they force us to become laser focused on what really matters.

So what should graduate recruiters and developers be doing in 'crunch' times? Look more carefully at HR systems and measurement: tracking data such as retention rates, cost per hire, promotion rates, the business contribution graduates make while on a placement and linking these back to whether you are successfully measuring high potential effectively at the assessment stage. All this will help Graduate Recruiters to build a better business case for continuing to invest in talent at this level.

Informal learning and social networking are increasingly important: organisations now realise, often driven by cost reductions, that recruitment and development functions can invest in social networking and virtual communities as a solution for raising employer brand with talented student groups and as a means of fostering informal learning.

Centralisation is back: many clients we talk to now are looking for ways to reign in spending on recruitment and L&D. This certainly seems to be the trend where the focus is on hiring high-potential. Such efforts may look like cost savings from the outside, but inside they are driven by the intense need to coordinate L&D and HR efforts to build an integrated talent management process. BT, Caterpillar, Neilson, Rogers Communications are examples of companies focusing on the centralised approach.

Understand the difference between high-performance and high-potential: companies tend to look at job requirements, rather than potential when identifying high-potentials. When designing graduate assessment processes and deciding which individuals to hire, it is all too easy for the 'hiring manager' to have eyes for the candidate that is going to fulfill immediate business needs. This is often because those involved in the assessment process are not clear on the overall talent strategy; it's not only important to clarify terminology but ensure clear briefing prior to events.

Even if the economy does continue to slow down, it is imperative to maintain investment in talent recruitment and development, however, the Graduate Recruitment profession can only expert to do this if they are providing the evidence that it is worthwhile in the long run.

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The A* Cometh...

Even if the economy does continue to slow down, it is imperative to maintain investment in talent recruitment and development, however, the Graduate Recruitment profession can only expert to do this if they are providing the evidence that it is worthwhile in the long run.

We have seen a new year of record achieving results at A-level. Surprise, surprise, the number of A grades has risen to 25.6% and the overall pass rate increased for the 26th consecutive year. This has stimulated the cyclical debate over whether the once respected exam is getting easier.

The DfES has confirmed plans to introduce an A* grade to restore credibility and help differentiate amongst the top performing students. What impact will the introduction of the new grading system have on the university admission process and graduate recruitment applications in forthcoming years?

University perspective

Whilst some elite universities are pro the introduction of the new A* grade, the majority are not sure as to how they will incorporate them into their admissions processes. It is inevitable that new systems throw up issues, but given the competition for places at the best universities this uncertainty will inevitably lead to anxiousness amongst the top sixth form students.

Earlier this year, one leading university, Imperial College London, said it was considering setting up its own entry exams - rather than relying on national tests. This supports the view that it is hard for universities to select the best candidates when so many students earn top grades and despite changes in the system, institutions are looking at alternative ways of evaluating their applicants.

Dr Mike Sewell, Chair of the Admissions Forum at Cambridge University claims that until they know exactly what the A* will signify they will be proceeding with caution and that it is, "unlikely that they would be making extensive use of A* in offers in 2010," that being the first full year of the new grading.

Oxford University admissions has plainly stated that they will not be using the A* in any shape or form in 2010. They want to see how the grade is distributed before incorporating them into offers.

This is partly because there have been concerns from universities that this group of high flyers receiving A* will be disproportionately drawn from independent schools - and that if these grades are used for admissions that it will mean fewer state students in top universities.

The employer's perspective

So what does the A* mean for graduate recruiters? Many organisations still place an emphasis on reaching a certain level of UCAS points. According to the AGR Summer Survey, over 75% of AGR employers adopt an application form as the first stage of the selection process. A particular UCAS tariff minimum is a requirement for 29.3% of respondents. Almost half ask for a minimum of 300 UCAS points. Around a quarter ask for UCAS points at 320 -360 points and 30% are less exacting, setting their threshold at between 240 and 280.

The new grade means more students with more points, the benchmark inevitably raised... will graduate recruiters need to increase minimum levels for either internship or graduate programmes?

We spoke to the Graduate Recruitment Manager of a leading strategy consultancy who said, "we are unlikely to increase our minimum entry requirements in the future, we are placing less and less emphasis on grades achieved at A-level anyway, we'd rather focus on improving other aspects of our selection process to ensure we get the best people."

Another Graduate Recruiter we spoke to said "this is just too far off for us to worry about, we are more concerned about the introduction of new qualifications and how we can better compare UK with the academic achievements of other EU applicants."

UCAS is yet to announce what the new A* will equate to in points; they verbally confirmed to us that they are looking to introduce a new allocation by Autumn of this year after consultation with the relevant stakeholders.

It seems that until there is more clarity about how the A* is allocated, there is a reluctance from all quarters to really change their process.

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Top 10 tips for targeting students on campus

There is increasing activity and innovation on campus to stimulate interest in graduate opportunities amongst organisations: from drinks receptions, crazy golf, art installations, photography competitions, CV workshops, trading simulation games and all manner of 'give aways'. How is a business supposed to differentiate itself?

We talked to some of 2008's candidates to find out what they thought was effective. Here are their thoughts on the do's and don'ts of graduate marketing.

The Dos

The overwhelming response from the 85 students we spoke to was to be "more creative". It seems that whilst you might think you are constantly trying to do things differently, their perception is that the majority of companies rock-up, put a stand up at the annual careers fair and expect students to approach them as they tour the room.

1. Be creative: The majority of students we spoke to said they were bored of seeing the same type of powerpoint presentation, stand or company brochure making the same platitudes: "we value our graduates, we can offer you exciting opportunities for development..."
   They want to hear specifics and in an innovative way - they suggest better use of video, interactivity, profiling previous graduates, provision of 'take-away' presentations on memory sticks rather than printed out brochures that end up in the bin. One student mentioned their experience of PWC's 'Carbon Gym', which also said something about the company's environmental efforts.
2. Support societies: Gareth Twomey, Committee Member of the Economics Society, Newcastle University said "we would rather a company invest in our society than come onto campus and hand out stress balls or other gimmicks; it's better for them too, they'll raise their profile in a positive way with the right kinds of students". Other graduates that were members of societies agreed with this perspective and said, "small contributions made a big impact".
3. Teach us something: Approximately a third of the people we spoke to said they would like to gain real insight and experience into the business world when they interact with companies. Judith Craven who was a member of the Business Society at Warwick University claimed "students are continually criticised for not living up to expectation at interview, so why don't you come to campus and teach us how to handle interview situations."
4. Be tailored in your approach: A number of people pointed out the importance of taking both a tailored and personalised approach to students they were particularly interested in. If you really want to attract the best mechanical engineers or the best mathematicians then build relationships with the departments directly or hold smaller events for those students that might be interested in your sector. One student talked about an investment bank holding an invitation only dinner that a friend had gone along to. They felt the word-of-mouth marketing effect of such events was powerful.
5. Use Web 2.0: Generation Y students like to be communicated to online, whether it's to promote presentations on campus or to provide insight into a role. A number of people mentioned that if they missed the company presentation because of other commitments, they wanted to be able to view it online afterwards and were surprised that this was not always easy to access.

The Don'ts

1. Produce lots of printed brochures: apart from portraying the wrong environmental image, many students we spoke to said they ended up throwing away most marketing materials. Nearly a third felt improvement of websites and introduction of webinars was a better investment.
2. Focus on the elite universities - 20% of the students we spoke to were not from the 'top' universities and a number felt as if many companies just didn't bother marketing to them. Linguistics student Jonathan Mirren, Kent University, claimed "we didn't really have any companies visit us or try to market to us in anyway; all the focus seems to be towards the Business School or other universities."
3. Just send HR people to careers fairs - some students we spoke to said they would rather talk to previous graduates than HR/recruitment people at careers stands. They felt some people were unapproachable. They were also worried that the impression they created at the stand would somehow influence their application.
4. Target the science students - the Arts students in our survey group said they were surprised at how biased marketing activity was towards science/engineering subjects and even boys. Ruth Howard at Bristol University claimed that in her final year a lot of companies had set up sports games close to the Engineering Department, such as Table Football and Crazy Golf, which didn't appeal to her or her female friends.
5. Expect the earth - don't promote your company and expect students to understand whether they are a good fit for your scheme as a result. Your marketing pulls people in but how effectively does it communicate the key message and encourage self selection? As Arvid Strathmore at Oxford University put it; "we see the big multi-nationals here, offering fantastic salaries, promoting themselves, they all seem to be looking for the same thing, they actively encourage us to apply but it's hard for us to tailor our applications, because apart from taking hours to fill out the form, we still don't really know what the job entails. I was surprised that I my application was successful but my friend's was not even though we have a very similar academic background."

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Are you looking for high-potential or high-performers?

Many organisations fall into the trap of thinking they are recruiting high-potentials when in reality the selection and development process is set up for high-performers - people that will do a good job in a given role.

What's the difference you might ask?

Rather than think of people as not competent or competent; current thinking is to look at high-potential and high-performance.

A high-potential is a high-performer with the potential to move upwards within a company. A high-performing employee is a high-performer without that same potential. The latter might be someone that is extremely effective in a given job, but does not necessarily have the ability to move to a more senior position.

It is true that many individuals have "potential", few have unlimited potential (which is why so many organisations have succession challenges). The trick for companies is to understand whether you are recruiting high-potentials, and to be really honest about it, and then design an appropriate selection and assessment process that measures potential.

How do you measure potential?

There are a plethora of models and approaches that have been developed by occupational psychologists. Such models are developed by R&D and tested over time to build reliability. Typically, they incorporate three key areas: basic intelligence or cognitive horsepower (IQ); emotional intelligence (EQ) and finally attitude or cultural fit to your organisation.

How do you go about building a high-potential assessment centre?

If you are creating a selection/assessment process it is important to have tests/interviews/exercises that link to the 'potential' model that you are using. In addition, the people using the tools need to understand how they work and what they mean. It also makes sense to engage high-potential managers in any assessment process designed, they are the ones that will have responsibility for mentoring and developing hires.

It goes without saying that assessors need to be briefed and fully trained; this will not only ensure that candidates are measured in an objective way but make the decision making discussion easier. High-potential hires are about linking candidate's to the bigger picture, the longer-term business challenges and not what is needed from someone in the first two years of employment.

Think about designing an assessment centre that has 'lead indicators' (pointers of potential performance). A competency interview is useful but it does not allow you to evaluate someone's behaviour in 'real-time'. You are looking to assess learning ability, commitment and emotional intelligence in possible business situations.

Lastly, it is important to have a process that links to your high-potential programme. Again, this is where honesty is necessary. There is no point in investing in a high-potential assessment design if you do not have the ability to create career opportunities that will stretch and motivate a 'hi-po'.

If you would like to discuss issues covered in this newsletter in more detail, please contact: Katherine Travell at kt@futureboardconsulting.com or + 44 (0) 20 7 849 4565.

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