More than half of new graduate recruits plan to leave their job within two years, according to a new report which identifies a "clear disconnect" between expectations of recruits and their employers.
A survey of 1,900 graduates and managers showed that bosses underestimated the importance of pay, career advancement and work/life balance.
Penny de Valk, chief executive of the Institute of Leadership & Management, which conducted the study, said: "With the cost of graduate recruitment reaching anything up to £3 billion each year, such high levels of attrition should not simply be accepted by employers.
"Organisations put a lot of effort and investment into nurturing and developing their graduates in order to establish a pipeline of talent that will drive innovation, organisational effectiveness and competitiveness.
"However, a widespread desire among graduates to move on within a few years undermines efforts to manage talent effectively and promote the long-term success of the organisation."
A spokesman for the Department for Business, Innovation and Skills said: "The Government has asked the former Hertfordshire University Vice Chancellor, Professor Tim Wilson, to lead a review of how universities and businesses can work together to enhance the employability of graduates."
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