From campus to corporation

The number of students who graduate from university is declining as our population ages. Competition among employers for top, young graduate talent has been hotting up. Teresa Russell talks to three leaders across the public and private sectors about how they lure the right graduates from campus to corporation

In October 2003, the Australasian Association of Graduate Employers (AAGE) commissioned a benchmarking study of the practices of 117 organisations across a range of industries which recruit new graduates. The respondents anticipated an increase of 9.8 per cent in their 2003 graduate intakes, which is a process that takes an average of nine months. These companies received an average of 36 applications for every graduate they hired – a huge number, given that some of the top accounting firms hire up to 200 graduates each year.

Graduate recruitment has really come of age in Australia in the past five years or so, according to Ciara Clifford, graduate recruitment manager for Deutsche Bank Australia and New Zealand. “The job of recruiting graduates used to be handled by contract staff on a project basis, but now there are two people in Deutsche Bank whose sole focus is recruiting new graduates,” she said. Deutsche Bank employs 1,200 staff in Australia and has 32 new graduates starting its 2004 graduate development program.

Robert Matinello, BHP Billiton’s recruitment sourcing specialist (shared services) based in Adelaide, says that graduates are certainly no longer considered the cheap labour that they once may have been. “A science graduate based in Perth might receive a salary in the high $40Ks, but if they are based at a mine in Mt Newman in the Pilbara region of WA, their starting salary may be in the high $50Ks, along with subsidised housing and utility costs, as well as a performance bonus. BHP Billiton hires between 30 and 50 new graduates each year in Australia, depending on the needs of the business.

Australia’s Department of Defence employs 17,000 civilians and has recruited between 20 and 80 graduates per year for the past decade. “Our graduate development program is not about employing young, enthusiastic and bright people and spitting them out at their use-by date,” says Margot Kropinski-Myers, director of leadership and development for the Department of Defence in Canberra. “We want to grow our own senior executives. Graduates are more expensive to employ, but we want them to be with us for the long haul,” she says.

The approach

Employers approach students in a variety of ways, apart from the traditional newspaper advertisement. Most post vacancies on individual university websites or nationally through www.gradlink.edu.au, run by the National Association of Graduate Careers Advisory Services (NAGCAS). This site currently profiles 180 organisations across a wide range of industries that are actively seeking graduate applications. Some attend university careers fairs at a cost of $300-$1,500. Others target specific disciplines via e-mails filtered by a specific university’s careers advisory officer. A few target specific individuals – the best and the brightest in a year, again through careers advisers or via deans of faculties. A few, including Deutsche Bank, offer “no strings attached” scholarships of $5,000-$8,000 to outstanding students to encourage them to complete an honours year. This also serves to heighten the company’s profile on campus.

Katrina Harrignton, president of the AAGE, says that one of the goals of the association is to ensure that graduates are treated fairly in the recruitment process. This includes following a code of conduct that prevents organisations from hounding individuals for a positive response to an offer of employment. These candidates are often the top academic performers in a particular discipline who are targeted by competing organisations.

The graduate

Although the Department of Defence, BHP Billiton and Deutsche Bank are as different as three Australian organisations can get, they are seeking strikingly similar personal qualities in the graduates they employ. The first cull is done by academic achievement – a credit or distinction average, depending on the discipline. Almost all graduate recruitment applications are now done online. BHP Billiton utilises online recruitment technology to manage the initial assessment and correspondence throughout the whole process.

All three organisations highly regard any previous work experience – particularly if that work has been in the student’s chosen field. Deutsche Bank and BHP Billiton run vacation employment programs for students. Any who have worked for them for the three-month summer holiday period will be favoured (providing, of course, that they worked well and their results pass muster).

Ability to work within a team is also desired, so if the student has been part of a sporting team, worked in a community organisation, or can otherwise demonstrate this ability, it is well regarded. During a student’s visit to the Department of Defence’s assessment centre, they will participate in role-plays to test for teamwork ability.

Strong leadership is also highly sought after, so if the student has been an office bearer in a formal committee, captained a football team or can otherwise demonstrate this trait, they pass on to leap the next hurdle.

Testing

The Department of Defence used to use the Public Service Test (which was sat in March) to filter candidates. The long lead-time disadvantaged both parties, so it now makes offers in August and starts the program in February. It has developed attitude and aptitude tests that are administered in a test environment in its assessment centres, which are then marked against a rating scale.

BHP Billiton used to do verbal and numeric reasoning testing across the entire graduate program, but now only uses it selectively depending on the discipline and asset. Deutsche Bank asks a student to give a few paragraphs in answer to a question about the economy, along with writing about why they are attracted to working for the company.

Designing a program

All three companies give graduates a broad range of job experiences throughout the formal program and say it is highly regarded by the graduates. The length varies from 11 months to two years. Deutsche Bank also includes one to two months training in either London or New York, attended by all graduates from its businesses around the world.

Department of Defence’s Kropinski-Myers says that it is important the organisation’s senior managers/board members define the types of people that will be needed in five to 10 years, so that “What they want is what we’re recruiting,” she explains.

This extends through to the design of a graduate development program. Although its 11-month program starts in February, peer support starts when offers are accepted. The graduates will all have to relocate to Canberra (paid by Defence). They get to meet others from the same area and are given contacts in Canberra who they can speak to – usually graduates who have been through the program and still work for Defence.

Deutsche Bank calls its initiative a ‘buddy system’ where an employee with two to three years’ experience will keep in touch with the recruit a few times during the final university year. Both companies also use a formal mentoring process for graduates once they commence work.

The cost

AAGE’s Benchmarking Study in 2002 found that that the average graduate cost per hire was $4,850, but more than 50 per cent of organisations were unaware of their actual costs per hire.

BHP Billiton’s Martinello says that the cost varies greatly in his organisation, depending on the location of the job. “If you have to fly three shortlisted candidates to a remote town, give them a tour of the town as well as the mine, show them the type of housing they would live in and so on, it’s a lot more expensive than hiring a finance graduate from Melbourne University to work in the Melbourne head office,” he said.

Kropinski-Myers says that it costs the Department of Defence $5,800 per person hired, which is probably higher than average because it includes relocation costs to Canberra. “A graduate’s output is better than a regular recruit’s, so the cost can be justified in those terms,” she said.

Deutsche Bank declined to share its cost per hire, but conceded that it was above the AAGE average of $4,850. “You have to cost everything you spend in the process – advertising, travel expenses, salaries of graduate recruitment staff, time of senior managers involved in the interviews, postage, relocation costs – everything,” says Clifford.

ROI

All the above organisations measure ROI on graduate retention rates. Defence has a 98 per cent retention rate throughout its program, but then encourages the graduate to seek experience elsewhere in the public service and return to Defence with even broader experience.

Deutsche Bank has recruited more than 80 graduates since 2000, with a retention rate of over 85 per cent. BHP Billiton considers a graduate recruitment successful if the person is with them for five years (when they will achieve maximum productivity). Resources companies experience high turnover rates in remote sites – 15 to 20 per cent per annum is average. A graduate may not last five years in a remote site, but will probably change roles within the company every two years or so.