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Do employers look at university rankings when choosing candidates?
1) It is difficult to give an accurate answer to this question for an individual student or an individual employer as there are other things which make a difference to employability. However, what we can say is that some employers may favour higher ranked universities either in terms of where they focus their recruitment effort or as part of their selection procedure. Also, higher ranked universities will tend to have more highly qualified students (which will make a difference to the learning experience). It is worth looking at the individual measures too. The career prospects measure is a direct reflection of the initial success for the graduates from an institution; and the National Student Survey score will give an indication of how happy the students are with the course.
On the other hand, a student has to be happy with their choice. If they are unhappy, wherever they are, they are less likely to perform well and that will also impact on employability.
2) For English literature this matters less re grad employability stats. It is all about the course content and structure in my view. It may be that the university ranked 50th is only a few percentage points away from the uni ranked 20th for graduate prospects. A well rounded English lit grad can make themselves employable but it is true that some employers targets universities in the top 30 or so e.g. the high fliers survey.