2006 Graduates Command 20,300 Starting Salary

UK graduates can expect to earn an average starting salary of around 20,300 this year, according to the latest First Rung: Graduate Pay Trends report from management consultancy Hay Group.

The study, released today and based on information from public and private sector employers throughout the UK, pegs the average starting salary at 20,306.

Public Sector Pay Outstrips Private Sector
The Hay Group research reveals that for the first time, public sector starter salaries are above those being offered in the private sector.

The average salary for a graduate going into the public sector will be 21,445 this year ñ 7% above the average private sector wage of 20,035. Civil service pay is outpaced only by the lucrative oil industry, where graduates can hope to secure an average starting salary of over 25,300.

Rob McPherson, the pay analyst at Hay Group who conducted the study, commented:

ìThe Class of 2006 can look forward to an average starting salary of around 20,300. The real surprise for this yearís graduates is that public sector jobs are now paying more than the private sector.

ìAs we a see a trend towards increasing professionalisation in the public sector, management training schemes in public bodies such as the NHS and the Civil Service are paying graduates very competitive wages.î

Graduate Pay Inflation Falls Behind
Wage inflation for university leavers is lagging behind national levels, the report finds. Ahead of the national average in 2004-5, this year graduate pay is up just 2.4% since 2005. This compares to a national wage inflation level of 3.2% over the last year. Initial post-degree pay levels have increased by 18% since 2000, compared to an overall wage inflation of 19%.

South West Leaps Ahead
London and the South East are predictably ahead in the regional graduate pay stakes, with starting salaries in inner London pegged at 12% above the national average at 22,737. However, this must be viewed alongside the substantially higher cost of living in the capital.

Starting salaries in the South West have leapt ahead during 2006 - the region is now the best-paid location for graduates outside the South East. Traditionally a low paid area, starter salaries in the South West will average 20,028 for university leavers this year.

Scotland remains a fertile job-hunting ground for graduates, with starting salaries pegged at an average 19,872, the second highest level outside the South East.

Rob McPherson said:

ìPay levels in the South West generally are on the rise, and this appears to be having an upward effect on starter salaries. Scotland also offers attractive wages for university leavers. Graduates in these regions would be well advised to stay put.î

The North West, however, has fallen substantially down the graduate pay ladder since 2005, when the area was the highest paid for university leavers outside of the South East. The region now comes in at a poor seventh in the graduate pay table for 2006, with typical starting salaries 3.3% below the national average at 19,639.

Northern Ireland Bottom of the Pay League
East Anglia (19,039), the West Midlands (19,019) and Northern Ireland (18,654) offer graduates the poorest salaries, with graduate pay pegged at 6-8% below the national average - making Northern Ireland the UKís lowest paying region for university leavers.

Engineers Top of the Class
Engineering again proves the most highly paid graduate profession, with an average starting salary of 21,681 - 7% above average graduate pay.

Aspiring legal, IT and finance professionals will be disappointed that these careers do not offer graduates the huge starting salaries that might be expected. Legal wages are ranked third, IT fourth and finance sixth in the Hay Group graduate pay table ñ with starting salaries coming in at 20,618, 20,453 and 20,100 respectively, all below the national average.

Call centre and customer service employees remain the worst paid graduates, receiving 7.7% below the norm at 18,746, while graduates choosing a career in sales must rely on commission to make up for a 3.9% shortfall in basic salary (19,514).

Rob McPherson commented:

ìIT, law and finance professionals can expect to earn well during their careers, but starter salaries for these competitive professions are relatively low. Moderate pay in the IT sector in particular is due partly to a surplus of graduates entering the industry.î