Employers report the biggest increase in graduate vacancies since 2000

Graduate level vacancies rise by 15.5%

Median starting salaries climb to 21,000 ñ a 3.4% increase since last year

24% of employers report applications of a higher standard than last year

There is good news for graduates as employers report an increase in both salaries and vacancies, according to research published today (Wednesday 14 July 2004) by the AGR (Association of Graduate Recruiters).

The AGR Graduate Recruitment Survey 2004 ñ a survey of some of the UKís leading employers ñ reveals that after three consecutive years of reduced vacancies for graduates, the number of positions for graduates leaving university this summer has risen by 15.5 per cent. This rise in vacancies is reflected in the fall in applications per vacancy. Employers received an average of 37.6 applications for every vacancy during the 2003-4 recruitment year compared with 42.1 applications per vacancy in 2002-3.

Graduate starting salaries have continued to rise. AGR employers will be paying this yearís new graduates a median starting salary of 21,000 compared with 20,300 last year. The outlook for 2005 suggests that both salaries and vacancies will remain stable with 82% of employers expecting to maintain or increase vacancy levels and 60% predicting a rise in salaries around the ëcost of livingí.

The AGR Graduate Recruitment Survey is the definitive bi-annual barometer of the employment situation for graduates in the UK. The survey, carried out by High Fliers Research, is based on the responses of AGR members ñ many of the UKís largest graduate recruiters in both public and private sectors. The research for this latest report was carried out during June 2004.

Carl Gilleard, chief executive of the AGR, comments:

ëThe findings are good news for the graduate recruitment industry and great news for graduates themselves. Vacancy levels have risen and we expect both salaries and vacancies to continue to remain stable in 2005.
ëThe days of escalating starting salaries for graduates appear to be over. Employers are providing graduates with training and development and a remuneration package that is competitive rather than extravagant, covering the cost of living increases.

ëThe Government will be encouraged by the report, which shows that there are increased vacancy levels at a time when the expansion of higher education is so high on the agenda.í

Vacancy levels
In total, UK employers have increased the number of vacancies on offer to graduates by 15.5% in 2004. This follows two years of reduced vacancies in 2002 and 2003, when employers cut their recruitment by 6.5% and 3.4% respectively.

IT companies, investment banks and chemical or pharmaceutical companies reported the largest increases in vacancy levels in 2004 ñ up 52.1%, 50.9% and 43.2% respectively. Motor manufacturers and construction companies reported a drop in vacancy levels.

Starting salaries
The median starting salary for graduate level jobs across all sectors is 21,000, which represents a rise of 3.4 per cent on last year. One in five employers are offering starting salaries of 25,000 or more, while nine per cent are paying 17,500 or less to new recruits.

Forty-two per cent of employers have increased their starting salaries by more than 2.5 per cent in 2004, while seventeen per cent provided a ëcost of livingí rise of around 2.5%. Nearly two in five employers (thirty nine per cent) have left graduate starting salaries unchanged and just two per cent have reduced their starting salaries.

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 biggest increase is reported in the Midlands where starting salaries have increased by 8.7 per cent to 20,000.

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 ten per cent to 22,000. The public sector reports a 3.1 per cent increase in starting salaries to 19,700.

Selection and assessment
Nearly a quarter of employers (24 per cent) reported that the applications they received were generally of a higher standard to those received last year. Thirty-three per cent of employers are using 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.

Adding value beyond measure
New research published on Monday 12 July by the AGR at its annual conference shows that graduates contribute approximately 1 billion of added value to the UK economy on an annual basis. Adding Value Beyond Measure, a research project conducted by Dr Antony Hesketh, reveals a general consensus among organisations that graduates contribute in the region of three times their own salaries. The 21,500 places offered by AGR members alone contributed approximately 1 billion, indicating that the business case for graduate recruitment programmes is as strong as ever.