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Employer demand for graduates remains high

This year’s graduates are heading into a robust recruitment market, with eight out of ten employers (79%) taking on new recruits in 2017/2018, a study by HR website XpertHR shows.

But it also reveals that starting salaries have been frozen for the past nine years, with data from previous surveys in the annual series showing no change since 2008/2009.

Key findings from the survey of 186 public and private sector employers show that:

  • Employers are typically taking on as many or more graduates than in previous years;
  • Median starting salaries are £24,000; and
  • Nine out of ten (87.1%) are having problems finding suitable graduate recruits.

The survey shows that nearly half (49%) of organisations are aiming to recruit the same number of graduates as they did last year, with almost as many (44.2%) taking on more; just 6.8% are planning to decrease the number of graduate recruits.

Large employers – those with 1,000 or more employees – are most likely to be cutting back, with 12.1% aiming to take on fewer graduates than last year.

Despite the lack of movement in starting pay, the overall range of salaries on offer is wide, running from £15,000 at the lower end to £48,000 at the top of the range. The middle half of all salaries (the interquartile range) runs from £20,000 to £26,000.

Not surprisingly, the best pay rates are on offer at the largest organisations and in the private sector.

By organisation size, the survey found median starting salaries of:

  • £22,000 at organisations with fewer than 250 employees;
  • £23,000 at those with 250 to 999 employees; and
  • £25,000 at those with 1,000 or more employees.

Despite their obvious enthusiasm to take on recent graduates, many employers were critical of the calibre of applicants, with more than two-fifths (44.2%) complaining about the poor quality of knowledge, skills and experience on offer.

One respondent commented: “Despite the high volume of graduates, the level of genuine talent is low.”

The perception that candidates were ill-equipped for the task is particularly acute in the manufacturing sector, where more than half (54.1%) of respondents identified it as an issue.

However, not all comments were negative. One respondent commented: "Graduates provide a higher, more consistent return to a business both short term and long term. Their application is great - conscientious and professional with a desire to learn more, so why would we not want to hire more?"

XpertHR managing editor for pay and HR practice Sheila Attwood said:

“There is good news for recent graduates in our survey. Employers are generally keen to take them on and recognise the value that they have to offer. But the evidence does show that pay has not kept pace with rising prices over recent years, and in common with other employees, they will feel the squeeze. It is also interesting to note that employers who report the greatest difficulties recruiting typically also pay below the median. In contrast, the median graduate starting salary on offer from the minority of employers that say they have not experienced any issues with graduate recruitment is in line with the survey median of £24,000.”

www.xperthr.co.uk