Graduates offer 5:1 return on investment

Companies that employ graduates enjoy a £5.30 return for every £1 spent

Employing graduates gives businesses an excellent return on investment, new research suggests.

According to a report by Lancaster University, graduate recruitment programmes generate a return of £5.30 for every £1 of investment, and the average graduate pays for themselves within 20 months of starting.

The report, which was commissioned by the government’s Backing Young Britain campaign, aims to challenge recent decisions by many businesses to stop hiring graduates.

Dr Anthony Hesketh, Lancaster University Management School, said:

“We know that in these tough economic conditions businesses are considering the value of graduate recruitment, however they remain a vital source of future capability for organisations.

“The report clearly reveals that while it is a front-loaded investment, businesses do enjoy substantial returns from the 20 month mark and overall find themselves at a financial advantage from working with graduates.”

The report said graduates offer valuable ideas and innovative suggestions for business growth, and also offer a cost-effective way to grow an organisation’s talent pool.

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Carl Gilleard, chief executive of the Association of Graduate Recruiters said:

 “Past experience tells us that businesses that close their graduate talent pipeline, even for a short period, find themselves at a commercial disadvantage when the upturn comes as they do not have the talent in place to respond quickly to improved market conditions.

“We urge businesses to lend their support to Backing Young Britain and continue to see the value that graduate recruitment brings to their organisation.”

© Crimson Business Ltd. 2009


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