The number of graduate schemes in Britain plunged by a third last year as employers cut costs following Rachel Reeves’s Budget tax raid.
New figures from recruitment platform Adzuna show there were 794 entry-level programmes advertised in the 12 months to April, down from 1,224 a year earlier.
The decline was prominent across many industries, although the hospitality and catering industry was one of the hardest hit as it battled the Chancellor’s £25bn increase in employer National Insurance contributions (NICs).
This led to the sector recording a 41pc drop in jobs for university leavers last year, falling from 266 to 157.
Kate Nicholls, the chief executive of UKHospitality, said: “Since October, recruitment in the sector has undoubtedly been impacted as hospitality prepared itself to be hit by £3.4bn in additional annual cost, which largely made it more expensive to employ people.”
Employers have slashed hiring in a scramble for savings following Ms Reeves’s Budget, as bosses have reduced the most junior roles in favour of retaining existing staff.
This has left graduates bearing the brunt of the Chancellor’s tax raid, with fewer job openings fuelling an increasingly competitive labour market.
Kate Shoesmith, deputy chief executive of the Recruitment & Employment Confederation, said: “Slow economic growth and rising employment costs are making businesses hesitant to hire in some sectors.”
Given the slowdown in hiring, Ms Shoesmith urged the Government not to pile more pressure on employers through its incoming Employment Rights Bill.
This is set to burden companies with red tape by boosting workers’ rights.
She said: “It is vital the Government strikes the right balance in its employment rights reform, ensuring entry-level jobs remain both affordable for employers and appealing to young workers”.
Meanwhile, the drop in the number of entry-level roles comes amid growing questions over the value of university degrees, particularly as graduate schemes now offer salaries in line with the minimum wage.
In April, the National Living Wage climbed 6.7 pc to £12.21 per hour, meaning a full-time worker on the UK’s lowest salary now earns £25,500 annually.
That is narrowly above the average advertised graduate salary in March, which came in at £24,734, according to Adzuna. That was one month before the increase in the National Living Wage came into effect.
Meanwhile, the latest figures also revealed that the number of advertised graduate roles in the accounting and finance sector fell from 595 to 367 over the past year, representing a 38pc decline.
