The average graduate starting salary is set to increase by 4% to £26,000 this year after remaining at £25,000 since 2009, according to a survey from the Association of Graduate Recruiters (AGR) published today. More than 200 AGR members took part, including Barclays, Deloitte, Ernst & Young, Marks & Spencer and Procter & Gamble.
Graduate pay stagnated from 2009 to 2012 because of the economic downturn and the high levels of competition for graduate vacancies. Some of the employers who took part in the survey suggested that the anticipated economic recovery had increased confidence and prompted companies to review their starting salaries in order to remain competitive. Others felt that the increase in tuition fees, rising cost of living and inflation were also factors.
Carl Gilleard, chief executive of the AGR, commented, ‘The predicted increase to graduate salaries is significant and sizeable, particularly given the context of starting salaries remaining stagnant for the past three years. This will no doubt be welcome news to the government and the higher education sector, but moreover to graduates themselves.’
The most significant predicted growth in starting pay is from fast moving consumer goods companies (4.9%), followed by engineering or industrial companies (4.2%) and IT or telecommunications companies (4.2%).
Investment banking is the career area that offers the highest median graduate starting salary, at £39,000, followed by £35,000 for legal work, £28,500 for actuarial work and £27,750 for consulting.
The findings are based on research carried out with 214 AGR members, including many large employers who tend to offer very competitive salaries. Students should be aware that the UK average pay for a first graduate job is lower than the AGR figure. According to the Higher Education Statistics Agency, the median graduate starting salary for a 2009 graduate was £20,000.
The overall number of vacancies on offer from AGR members was predicted to drop slightly, with a 1.2% fall expected this year.
The average figure for overall vacancies conceals some significant variations between sectors:
Mr Gilleard said, ‘The findings show that the market is predicted to remain relatively stable, which is a relief and should be seen as good news against an uncertain national, European and global economy. With the job market intrinsically linked to business confidence, I am cautiously optimistic for graduate recruitment in 2012 and it is encouraging to see that only a slight drop is predicted.’
One public sector employer who took part in the survey said that graduate vacancies had increased because of recruitment freezes in the rest of the organisation, and explained, ‘We can use the graduates to be the talent pipeline coming in.’
Employers who took part in the AGR survey expressed some concern about two-year degree programmes. They felt these would be attractive to students, but feared that the intense workload would make it difficult for students to make time for work experience.
One employer from the accountancy and professional services sector told researchers, ‘Personally I think it really does the student a disservice. I think the purpose of university is not necessarily to go to university to get a job; it’s more about personal learning, personal endeavour and become more mature with a different outlook.’
Posted by Alison_TARGETjobs on 26 January 2012
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