Graduate starting salaries fall behind inflation as good graduates are hard to find

Starting salaries for new graduates have seen only modest increases over the past year, according to a survey by Personnel Today’s sister publication, Employment Review.

The 18th annual graduate recruitment survey says the median (or midpoint) starting salary of £20,100 this year is just 3% higher than the figure for 2006. By comparison, average earnings in the economy as a whole rose by 3.5%.

At one in four of the organisations surveyed, salaries had stood still.

The survey shows that starting salaries are higher in private sector services companies, which offered a median starting salary of £22,000, followed by manufacturing and production firms, which offered £20,000.

Repeating the picture found in previous years, graduate starting salaries were lowest in public sector organisations.

The survey reveals that, within the private sector, starting salaries are highest in consultancies and IT firms. Finance and IT roles brought the greatest rewards, with starting salaries standing at £23,487 and £23,167 respectively.

Most employers see graduate starting salaries as non-negotiable, with just one in four (26%) prepared to discuss rates. Just over half (58%) also operate a single starting salary for all graduates within the organisation.

Employment Review’s findings are broadly in line with graduate salary surveys published by careers website Graduate Prospects, which identified a median figure of £18,000, and the Association of Graduate Recruiters (AGR), whose headline figure was £23,500 – the Graduate Prospects survey focuses on smaller employers, while the AGR statistics relate to only very large organisations.

Good graduates are hard to find…

Two out of three employers surveyed by Employment Review have experienced difficulties in recruiting graduates over the past two years.

Although 185,000 students graduate each year, and there are already some 7.7 million people in the workforce with a degree or equivalent qualification, many employers complained that candidates lacked key attributes such as motivation or business awareness (59%) that it was hard to find graduates with appropriate technical or vocational qualifications (56%) or that candidates dropped out at a late stage of the recruitment process (46%).

Faced with these difficulties, employers said shifting job ads to new media or different publications (64%) was the most effective solution. Others had tried another recruitment method with some success (56%).

Less commonly, employers found it helped to speed up the recruitment process (40%) to ensure good candidates did not go elsewhere, or to raise starting salaries (36%). And some even found candidates by widening the range of acceptable degree subjects (29%).

…but online is first choice

Graduate recruitment is now online by default, the Employment Review survey shows, with nearly three-quarters of respondents (72%) setting up online application systems.

However, the survey reveals that paperwork retains its attraction for many. Four out of 10 employers (40%) operate paper-based application forms, either alone or alongside online application systems.

Half (51%) of employers said they would be prepared to accept a CV, and one in three will accept a letter of application (34%).

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