For many large employers, the cost of recruiting graduates onto graduate training programs represents a significant investment in human capital. These costs include the cost of the graduate 'search', promotional material to encourage applications among the best graduates and the cost of the rigorous and extensive selection process. This is not to mention the relatively large salaries and considerable benefits offered as an enticement to choose an employer over their competitors. In addition to the recruitment costs, the cost of the training programs offered by many graduate employers can be considerable.

A large business consultancy - Walker, Bird and Black (WBB) - recruits a cohort of between 40 and 50 graduates each year onto its three-year graduate training program. Among graduate job-seekers, the graduate training program is considered to be among the more prestigious and is known to be among the highest-paying. For this reason, competition for the scheme among graduates is fierce and WBB chooses to focus its recruitment activity on more prestigious universities. In 2008, for example, 70 per cent of its graduate intake came from just five universities. While graduate recruits often take on managerial responsibilities relatively early in their careers, the aim is to create a talent pool for more senior managerial positions and, therefore, retention of graduate recruits is paramount. To achieve this objective, the development program is highly structured and whilst there is limited scope for recruits to specialize in particular areas of the business or in specific managerial roles, the program seeks to develop generic managerial competencies to enable graduate recruits to fulfil a range of future positions. The program includes personalized development programs, mentoring, secondments (including frequent international assignments in its overseas operations and in partner or client organizations) and work shadowing. During the three years, each graduate also has the opportunity to work across different departments and operational areas of the company and to work in cross-functional project teams, often in leadership roles. The 'program' graduates are treated very much as separate to other graduates working in the firm during their three years' training.

A problem for many graduate recruiters is retention of graduates both during and following the formal program, especially given the investment already made in recruiting and developing graduates. WBB experiences a lower level of turnover of employees during the program than the industry average, which the company puts down to the content of the program and the range of benefits they offer their recruits. In the two years following the program, however, WBB experiences an unacceptable level of turnover among its graduate recruits, many leaving to take up opportunities at rival employers. In exit interviews, graduate recruits leaving the firm rarely mention pay as a reason for leaving but they often complain about a lack of opportunities for further advancement and development, particularly those recruited following a restructuring of the firm to promote team-based working and to eliminate unnecessary layers of bureaucracy. Senior managers also express disappointment about the ability of those completing the programs to act independently and effectively in more senior managerial roles and to take the initiative in decision-making and problem-solving. Subsequently, two of the rarely available senior managerial roles have recently been filled by external recruits, rather than from inside the company.

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