The number of graduates flooding the jobs market is rising, but with high
salaries and incentives at stake, how can employers ensure that they find the
right person for their position, not just someone hoping to cash in and move
on? By Mike Broad
Many employers are claiming that last year was one of the hardest for
recruiting new graduates.
While there are plenty of graduates entering the job market, companies
recognise that in the war for talent, the pressure is on to recruit the best
Employers who cannot offer attractive starting salaries and golden hellos
struggle to recruit high-performing graduates and are concerned that many of
the remainder lack the appropriate skills for their business.
"It is tough to recruit the right graduates to suit your company, and
there is concern over the quality of graduates with the sheer numbers entering
the market," said Joanne Inglis, group graduate recruitment and
development manager of Scottish Power.
For the best graduates, lucrative first jobs beckon, according to joint
research released this week by the Institute of Employment Studies and the
Association of Graduate Recruiters.
The median starting salary for the recruitment year 2000 to 2001 increased
to £19,000. In the past five years graduate salaries have risen by 65 per cent
or £7,500. Employers anticipate that it will increase to £19,800 this year.
Legal and financial firms continue to pay the highest salaries, with 10 per
cent of all organisations surveyed offering more than £25,000 as a starting
Another survey released earlier this month by High Fliers Research shows
that this level of remuneration is now expected by final-year students at the
According to the UK Graduate Careers Survey 2001, they expect an average of
£25,000 for their first job after graduation. The students with the highest
average expectations attended Imperial College, London, followed closely by
Cambridge University students. They wanted £26,600 and £25,000 per year
It is the City firms that are benefiting. The IES/AGR survey shows that an
increasing proportion of companies are offering golden hellos – 28 per cent of
the 200 employers in the survey. These ranged from £500 to £10,000, and were
more prevalent in legal and financial firms.
However, Scottish Power has had a strong year for graduate applications,
with over 3,000 for 35 positions. It has launched a successful online
recruitment strategy after years of declining applications. But Inglis is
concerned at the knock-on-effects for companies in less popular sectors.
"It is a problem. I’ve been told at employer forums that engineering
graduates want to go into consultancy or finance for a couple of years, collect
the golden hellos and pay off debts, before considering roles where they have
But Jackie Alexander, recruitment partner of PricewaterhouseCoopers, claims
that it is not just the recruitment methods of City firms that has reduced the
number of quality graduates in the market.
While PwC recruits over 1,000 graduates a year, she believes that changes in
student life are having an affect.
She said, "Students are having to do more academic work and with the
tuition fees they are also having to hold down part-time jobs at the same time.
It means that they leave it later to apply and they apply to less
More graduates are also delaying when they start work. The UK Graduate
Careers Survey 2001, based on face-to-face interviews with over 14,000
students, shows that just 40 per cent of finalists expect to start their career
immediately after university – the lowest number for a decade.
The IES/AGR research shows that graduate retention rates in high-paying
firms are no better than in other sectors.
AGR chief executive Carl Gilleard believes that this shows that graduates
are considering more than just the salary.
He said, "Employers are having to recognise that money is not the only
factor that graduates are concerned about. Personal development, career
prospects and work-life balance are all important. This generation of graduates
is more discerning – they know what they want and they will go out and get
Unfortunately, it seems that graduates don’t want to get into engineering,
science, research and development or IT, with over 50 per cent of the companies
surveyed in the IES/AGR study suffering difficulties recruiting in these career
At the other end of the scale, it is HR that has the least difficulty in
"The profession has done a good job of promoting itself and HR people
have acted as ambassadors for the role," said Gilleard.
The most likely destinations for graduates, according to High Fliers
Research, are consulting, marketing and the media.
Confidence is high, with 39 per cent of graduate job-hunters believing they
will secure a position with their first choice of employer, claims the
Survey director Martin Burchall said, "Graduates leaving university
this summer are the most ambitious and demanding of their generation.
"Most are confident of getting their first-choice job and expect record
salary packages when they begin work.
"For employers, this has made the 2000 to 2001 recruitment round one of
the toughest for years, and many major recruiters have struggled to attract
enough quality applications to fill their vacancies.
"Competition to recruit the best graduates has been intense and it has
not been unusual this year for the most sought-after finalists to be offered
salary packages of £35,000 or more to entice them into their first jobs."
Web helps widen recruitment net
The Internet has become the most frequently used recruitment process with 95
per cent of respondents using it to advertise vacancies, according to joint
research by Institute of Employment Studies and the Association of Graduate
The employers who were surveyed claim they have benefited from being able to
cast their recruitment net wider and now receive a range of applications via
the Internet. "The Internet has become an important part of an integrated
recruitment campaign," said Joanne Inglis, group graduate recruitment and
development manager of Scottish Power.
The evaluation of potential graduate recruits at assessment centres was
considered to be the most useful recruitment technique, according to the IES/AGR
research. Recruitment agencies were considered to be the least useful