Recruiters predict highest increase in graduate vacancies in ten years

- Vacancies for graduates predicted to increase by 16.4%, despite current economic fears

- Salaries expected to increase modestly at a median level of 2.1%

- Employers anticipate difficulties in filling all their vacancies

- In 2007 a median of 26.7% of graduates recruited came from minority ethnic backrounds, up from 15.1% in 2006

The bi-annual survey into the status of graduate recruitment, released by the Association of Graduate Recruiters (AGR), reveals that vacancies are on the increase for the fifth year running, in spite of uncertainties regarding the UKís current economic situation.

The Association of Graduate Recruiters Winter Review 2008, the definititve, independent survey of the UKís leading employers of graduates, reveals that the number of vacancies anticipated for graduates entering the market into graduate level jobs this year will increase by 16.4%. Salaries for entrants will also increase, by a median of 2.1 %, around the level of inflation, bringing the median salary for graduates to 24,000.

However, despite such encouraging statistics, recruiters still envisage they will face difficulties in filling all vacancies, with 67% anticipating challenges. The reasons attributed for this include graduatesí perception of the business sector and their increasing selectiveness, and for employers, not enough applicants with the right skills. Conversely, a quarter of recruiters are now actively marketing their UK vacancies to overseas graduates, with the principle reason for this being ëto recruit the very best talent that is availableí.

There is encouraging news regarding the ethnicity of graduates, with a median of 26.7% of graduates recruited in 2007 coming from minority ethnic backrounds. The highest ethnic group was Indian (19.3%), followed by Chinese (18.2%) and Black African (13.7%, up from 7.7% in 2006).

The AGR is the recognised national voice for graduate recruitment. Its members include organisations of all sizes and sectors, in both the public and private sector. The Winter Review surveyed 217 employers, and was carried out in November and December 2007, analysing key trends and predictions in the sector.

Carl Gilleard, Chief Executive of the AGR comments, ìThe findings of our 2008 survey will make encouraging reading for graduates entering the workforce this year, as the market appears to be as bouyant as it has been for the past five years. Concerns about elitism within graduate recruitment also seem to be a thing of the past with the profile of graduates starting roles in 2007 being more reflective of the diverse make up of UK graduates.

ìHowever, the anticipated recruitment shortfall makes worrying reading, particularly in certain sectors, where recruiters fear they will not fill a significant number of the vacancies available. It does indicate that recruiters are becoming increasingly discerning, and will not lower their standards to fill these positions. The fact that employers are beginning to widen their recruitment field outside of the UK, may have wider long-term implications for the UK economy, and both employers and graduates may have to amend their expectations in order to narrow this gap.

ìThere is a strong message in these results for those seeking a graduate post in 2008 ñ donít delay, start applying for posts straight away and make sure that you prepare your applications carefully to ensure you market yourself well. Despite the growth in vacancies, it is still a very competitive and demanding market out there!î

Facts and figures in more detail
Vacancies:

- It is predicted that in 2008, graduate vacancies will grow by 16.4% This will be the fifth consecutive year of growth with 2008 enjoying the highest percentage growth in a decade.

- 17.2% of employers have reduced their intake targets, 13.3% do not expect any change while the remaining 69.5% all have more vacancies than last year.

- All sectors are anticipating growth other than pharmaceuticals and insurance firms.

- 24.9% of the respondents actively market their vacancies overseas and of those that do the vast majority (70.6%) do not restrict their marketing to Europe.

Recruitment Shortfall in 2007 and Challenges for 2008

- In 2007 43.5% of employers experienced a shortfall in filling their vacancies, equating to an average of 14.2 vacancies per employer compared to 12.3 the previous year.

- The proportion expecting recruiting challenges in 2008 has risen to a worrying 67.1%

- There are a number of reasons for this; an equal proportion (55.9%) quote ëGraduates perceptions of the business sectorí and ëNot enough candidates with the right skillsí. 52.4% also suggest that there are ëChallenges in certain geographical areasí while 43.4% refer to ëNot enough applicants with the right qualificationsí. Shortfall has been an issue for a number of years but this is the first time that ëGraduate perceptionsí has topped the list of reasons.

Diversity in the Graduate Market

- The proportion of females recruited in 2007 fell by 3.5% to 39.1%. That this is well below the proportion of females graduating can be partly explained by the type of careers covered in the survey and more importantly those not covered i.e. medical and teaching careers. This does not, however, account for the 3.5% fall last year and further research would have to be undertaken to establish the causes.

- The proportion of graduates recruited from ethnic minorities rose from 15.1% in 2006 to 26.7% in 2007. This significant rise can largely be attributed to extensive and effective marketing/targeting by employers to improve the ethnic mix of their workforces.

Salaries

- In 2007 graduate starting salaries in graduate level jobs rose by 2.4%. This year it is anticipated that there will be another modest rise of 2.1%. The median starting salary in 2008 in a graduate level job is expected to be 24,000.

- There is still a wide spread of starting salaries with 14.1% paying salaries of over 35,000 and 7.6% paying starting salaries of less than 20,000.

- Investment banks and law firms are now running neck and neck as the most generous paymasters whilst the public sector has fallen to the bottom of our league table along with transport or logistics and retail.

- 33% of employers pay graduates lump-sum payments at the start of their career (down from 35.4% in 2006) and in 2008 this is predicted to be a median of 2,000.