UK companies are hiring more students overall this year with apprenticeship growth outpacing that of graduate jobs, according to survey data from the Institute of Student Employers (formerly the Association of Graduate Recruiters).

The survey reports that employers increased graduate hiring by 1% to 20,614 graduates this year while the number of apprentices grew by 19% to 11,016. Meanwhile, the number of apprenticeships has grown to 54% of the volume of graduate jobs, compared with 44% last year.

Degree-level apprenticeships grew at the fastest rate (50%). However, the institute adds that the qualification is in its infancy and many courses are yet to receive government approval, so growth was from a relatively low base. Of the 11,016 apprentices, 823 were degree level this year. The report adds that growth is likely to slow down next year. Employers already hiring degree apprentices expect to increase their vacancies by 15% overall in 2018. An additional 18% of employers expect to start offering these opportunities next year.

The volume of interns recruited also increased, rising 3% to 6,833. Overall student hires rose by 6% in 2017 and median salaries for graduates increased 2% to £28,000. The median salary for degree apprentices was £17,802.

Meanwhile, improving diversity was cited as the biggest challenge for 2017, displacing Brexit from the top spot to eighth place. An average of 43% of graduate hires, 44% of interns and 34% of apprentices are women, compared to the 54% of female university students. However, the diversity of student hires is improving. Employers with year-on-year data improved their average gender diversity by 5% and ethnic diversity by 2% in the space of three years.

According to the report, securing candidates also remains a challenge for businesses and competition is strong. Employers invest around £3,500 per hire to recruit graduates yet, on average, 10% of job offers are declined and 5% of offers are revoked.

“A significant proportion of offers are turned down despite major efforts to find talent such as hiring former interns and increasing salaries,” Stephen Isherwood, Chief Executive of the ISE said. “Employers are also getting smarter about where they get their candidates from by making attraction and selection approaches much more inclusive.”

Meanwhile, ISE, which changed its name from the Associate of Graduate Recruiters, stated that the rebranding reflects a change in member needs since the organisation was formed in 1968.

“The change to the ISE reflects that the majority of its employer members take a broader approach to how they recruit and develop emerging talent, hiring school leavers, apprentices and interns alongside graduates,” ISE said in a statement.

“Our new name is more than a rebrand, more than an opportunity to update fonts and colours, and it wasn’t a decision taken lightly,” Isherwood said. “It was member-led, involved extensive stakeholder consultations and we engaged professional advisors. The Association of Graduate Recruiters no longer fully reflects our member base or what we do. For several years we have used our expertise in the apprentice and school leaver market to support members and influence change, so this cements our position as the voice of all employers involved in student recruitment and development. We successfully applied for the use of the title “institute” to reflect the greater depth and breadth of our offering including in-house research and professional training.”