Graduate salaries almost static as downturn puts pressure on pay

Employers plan to increase the average graduate salary by just 0.5% in 2009, research by Incomes Data Services (IDS) has found.

With Consumer Price Index inflation currently running at 3%, this is a significant reduction of graduate salary in real terms, according to the IDS’s Executive Compensation Review, based on a survey of 100 major private and public sector employers.

Report author Jessica Evans said: “This is the lowest forecast increase that we have seen since IDS started reporting comparable data on graduate pay in 1999. Not even during the dot-com crash was there such a small increase in graduate salaries.”

Graduates starting work this year can expect a median starting salary of £24,500.

IDS found that the private sector was reacting far more aggressively to the recession, with half of employers surveyed freezing 2009 starting salaries.

In the private sector, there is not expected to be any increase in the median salary.

Professional and managerial staff, according to figures published by IDS at the start of the year, can expect significantly higher average pay increases of 2.7%, which Evans said “shows that graduate salaries really will be lagging behind those of their more senior colleagues”.

Last month, the Association of Graduate Recruiters forecast that the number of graduate vacancies in the UK would drop this year for the first time since 2003.

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