Graduate recruitment market weathers the credit crunch storm despite gloomy predictions

Graduate level vacancies remain healthy with an 11.7% rise but starting salaries are kept in check

Average starting salary is 24,500

Competition for jobs intensifies with an average of more than 30 applications for most graduate vacancies

Employers begin to drop the 2:1 degree as the gold standard selection tool

The graduate recruitment market is surviving the economic downturn despite recent gloomy forecasts, according to new research released today (Tuesday 8 July) by the Association of Graduate Recruiters (AGR) at the organisationís annual conference.

Carl Gilleard, Chief Executive of the AGR, said: ìThis yearís eagerly-anticipated survey was something of an unknown quantity; the optimistic predictions of our Winter Review early in the year were rapidly overtaken by concerns about an economic downturn. Until today we have had only anecdotal evidence of how the change in the economic climate has affected the graduate recruitment market.î

ìThe results of the 2008 survey present a mixed picture; they are surprisingly positive in relation to the number of vacancies available with a respectable increase across the sectors and good predicted growth for 2009. However, although employers are still hiring, this yearís survey shows the smallest rise in graduate salaries in recent years and in most cases employers will offer no more than a cost of living rise next year.î

The AGRís Graduate Recruitment Summer Review is the UKís largest independent survey of the countryís leading graduate employers and the definitive barometer of the employment situation for graduates in the UK. This yearís survey, carried out by the trendence research institute, was based on the responses of 242 of the AGRís private and public sector members who collectively employ 23,727 graduates.

Vacancies
Despite fears that employers worried by the economic climate would start reducing or abandoning their graduate recruitment schemes, this yearís survey shows that vacancies for graduate level positions are actually growing with a respectable rise of 11.7% on 2007 figures. Though growth in vacancies has slowed slightly, almost three-fifths of employers surveyed expected to report an increase in vacancies in 2008.

The top recruiting sectors continue to be accountancy and banking which between them offer more than a third of all vacancies. The transport and FMCG sectors, however, have seen the greatest growth in the number of vacancies with a 50% increase on 2007. The overall outlook remains positive with 32% of all employers expecting vacancy levels to grow in 2009 and 74% expecting to fill their 2008 vacancies.

Salaries
The findings of the survey in relation to graduate starting salaries are modest with an overall growth rate this year of just 1.8%. The median salary for 2008 stands at 24,500 compared with 24,063 in 2007. The most common salary range for employers to offer is 22,001 to 24,000.

At the upper end of the scale, law firms have now outstripped investment banks with a starting salary of 36,500 compared to 35,000. Predictions for 2009 are notably cautious with almost half of employers planning to tighten their belts by giving only a cost of living rise. Nearly a quarter do not expect their salaries to change at all as concerns about overheads in the current economic climate begin to bite.

Applications
The number of applications for jobs continues to grow as the competition for graduate schemes intensifies. Survey participants received an average of 30.7 applications per vacancy with the FMCG trade, at the top of the range, receiving an average of 112 applications for each job. Applications for IT and banking have also grown and overall nearly one tenth of employers reported having received more than 10,000 applications this year. Interestingly though, more than half of employers are not satisfied with their ability to retain graduates once they are taken on.

Selection
One of the most striking findings of this yearís survey is the proportion of employers who have decided to drop the 2:1 degree as their main application criterion for graduate jobs. One third of employers are now asking for a 2:2 or above, as well as other skills and relevant work experience. The main reasons that employers cited for dropping the 2:1, which has until now been the gold standard of selection criteria, were the increasing importance of life skills as well as academic skills and the need to widen the talent pool.

World Class Skills
Employers were also surveyed on a number of questions relating to the overall theme of this yearís AGR conference - ëDelivering World Class Skillsí. Two fifths of employers supported the Governmentís ambitious target of ensuring that 40% of the UK workforce holds a degree by 2020, but 30% said they thought it was unrealistic and undesirable.

The survey shows a general agreement amongst employers that the UK is facing a skills shortage, with a majority (56.4%) expressing concern about a lack of hard skills such as writing, literacy and leadership and 55% saying that a lack of so-called ësoftí skills, such as the ability to communicate well, poses a serious problem for their business. A lack of other soft skills, such as a graduateís ability to manage their own learning, problem solve and be self-motivated were also a concern. A significant proportion of employers are also worried about low levels of knowledge in mathematics and IT/technology and most believe the answer to the skills and knowledge shortage is to focus on the development of elites rather than on widening participation.