Graduate vacancies set to increase for fourth consecutive year

Graduate vacancies expected to rise by 15.1%
Salary increase expected to be lowest in six years
Recruiters expect continued challenges in filling vacancies

The Association of Graduate Recruiters (AGR) today publishes its biannual Graduate Recruitment Survey, revealing that graduate vacancies are predicted to grow for the fourth year running.

The AGR Graduate Recruitment Survey 2007: Winter Review, the definitive independent graduate recruitment survey of the UKís leading employers, reveals that the number of vacancies for graduates entering the job market in 2007 is predicted to increase by 15.1%, significantly higher than last yearís actual vacancy increase of 5.2%.

The continued rise in vacancies is not accompanied by a similar hike in starting salaries. The median graduate starting salary is expected to rise by just 2.1% to 23,431. This predicted salary increase is the lowest for six years.

This increase in vacancies for graduate entry level positions continues to provide recruiters with challenges - over 40% of those surveyed anticipate difficulties in filling all positions in 2007. And despite fierce competition between recruiters for the best talent, less than 18% believe shortfalls are attributable to their starting salaries not being competitive, as shown by the significantly small increase in salaries for 2007.

Employers cited a number of recruitment challenges including:

Lack of applicants with the right combination of skills e.g. team-working and leadership
Lack of applicants with the right qualifications for specific job roles
Issues with specific geographical locations
Applicantsí perceptions of the industry sector

The AGR Graduate Recruitment Survey 2007: Winter Review, which surveyed 211 members of the AGR, was carried out during November 2006. The definitive independent graduate recruitment survey, it analyses predictions and trends within the graduate recruitment market for the forthcoming year, focusing in particular on graduate vacancies and salaries. The AGR is the recognised national voice for graduate recruitment and its members include many of the countryís largest public and private sector recruiters of graduates as well as a growing number of small and medium sized enterprises.

Carl Gilleard, Chief Executive of the AGR, comments, ìOnce again, we are seeing an increase in the number of graduate level vacancies which is great news for anyone applying for a graduate job this year. The current buoyancy of the UK economy is visibly affecting the graduate recruitment market.

ìThere is, however, a continuing anticipation that there will be some difficulty in filling these vacancies. This is due to a number of factors including the ability for some organisations to compete in a buoyant market. The main shortfalls appear to be in industries where specific qualifications are essential, such as construction and engineering, and where applicants are unable to demonstrate the right combination of ësofterí skills such as team-working, in addition to their academic achievements.î

Vacancy levels
Employers are again predicting an increase in graduate vacancies, with the growth in numbers of vacancies highest in investment banks or fund managers and accountancy or professional service firms.

There are also increases predicted within transport and logistics, construction, telecommunications and the public sector.

Geographically, London is still the epicentre for graduate level jobs. In 2006, London experienced a 10% increase and this rise is expected to continue. Globally, vacancies in Europe are predicted by organisations surveyed to rise by 18.4% in the next recruitment season.

Starting salaries
The median starting salary for graduates in 2007 is predicted to rise by less than inflation at 2.1% to 23,431, the lowest increase for six years. In 2006, the highest median salary of 36,000 was paid out to graduates in investment banking and fund management, with law firms breaking the 30,000 barrier for the first time, offering a median of 31,300.

The largest increases are reported by organisations from the FMCG sector, oil and energy, water and utilities, followed by those in banking and financial services and construction companies.

Bonuses and allowances
2007 sees a predicted decrease in the number of organisations offering lump sum payments for graduates, although this is still a significant 35.4%, with the median amount paid out staying at 2,000.

Regarding other benefits, 90.2% of organisations surveyed offered pension schemes and the provision of travel allowances as a sign-on incentive has risen, with over a third of respondents offering this, perhaps to counteract the increase in the number of graduates who are unwilling or unable to relocate.