Future looks bright for graduates as salaries start to climb

With
the university year at an end for most students, graduates will be turning
their attention to hunting for a job. Daniel Thomas finds out what employers
will be offering them this year.

Earlier
this year, academics at Cardiff and Lancaster universities painted a gloomy
picture for graduate employment prospects, claiming that only one in three jobs
in the UK required a degree and that average starting salaries were only
£13,000.

However,
the latest research from the Association of Graduate Recruiters (AGR)
completely contradicts these results gloomy findings.

The
AGR survey reveals that after three consecutive years of reduced vacancies for
graduates, the number of positions for university leavers has risen by 15.5 per
cent – a figure reflected by the fall in applications per vacancy.

And
salaries, far from being in the doldrums, are rising with the lowest starting
salaries around the £18,000 mark.

The
survey, based on responses from 223 large UK employers in both the public and
private sectors, shows that employers received an average of 37.6 applications
for every vacancy during the 2003-04 recruitment year. This compares with 42.1
applications per vacancy in 2002-03.

IT
companies (up 52.1 per cent), investment banks (up 50.9 per cent) and
chemical/pharmaceutical businesses (up 43.2 per centre) reported the largest
increases in vacancy levels in 2004. However, motor manufacturers and
construction companies reported a drop in vacancy levels.

Carried
out for AGR by High Fliers Research, the survey shows an upward trend in
graduate starting salaries. Employers will be paying this year’s new graduates
a median starting salary of £21,000 compared with £20,300 last year, it claims.

Graduate
starting salaries are highest in London (£25,000) and the South East (£21,500)
and lowest in Scotland (£18,500) and Northern Ireland (£18,000). 

The
outlook for 2005 suggests that both salaries and vacancies will remain stable,
with 82 per cent of employers expecting to maintain or increase vacancy levels
and 60 per cent predicting a rise in salaries linked to inflation.

However,
AGR chief executive Carl Gilleard sounded a note of caution.

‘The
days of escalating starting salaries for graduates appear to be over," he
said. "Employers are providing graduates with training and development and
a remuneration package that is competitive rather than extravagant, covering
the cost of living increases.”

Investment
banks remain the most generous with starting salaries of £35,000, followed by
consulting firms (£28,500) and law firms (£28,000). 

Energy,
water and utility companies report the biggest increase in starting salaries,
up 10 per cent to £22,000. The public sector has reported a 3.1 per cent
increase in starting salaries to £19,700.

The
survey contains good news for employers, with 24 per cent of respondents
reporting that the applications they received were generally of a higher
standard to those received last year.

Thirty-three
per cent of employers now use online, psychometric and numeracy testing to
screen candidates, and 78 per cent use final-round assessment centres or
selection events as part of their recruitment process. Thirty-two per cent are
now accepting applications all year round.

The
research also reveals that employers still have work to do to increase
diversity in their graduate recruitment, with only 14 per cent of the
respondents having targets for recruiting different types of graduate.

Nearly
half of the employers believe their organisation fails to attract enough female
applicants, a third feel they should receive more applications from ethnic
minorities, and around two-thirds think too few disabled students apply.

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