Against a backdrop of economic uncertainty, rising prices, loan repayments and unaffordable house prices, financial concerns are dominating the Class of 2011’s career choice criteria.
Yet there is hope for this year’s graduates, according to research from management consultancy, Hay Group: average graduate level salaries may be considerably higher than they expect.
Hay Group compared graduate level salaries from its’ remuneration database PayNet with 400 UK graduates’ expectations for six key company functions: HR, finance, IT, sales & marketing, legal and engineering.
Salary data is based on over 10,000 graduate level wages in over 600 mid-sized and large private sector organisations in the UK.
Contrary to conventional wisdom, salary is the main contributing factor for new professionals, Hay Group found.
The overwhelming majority (93 per cent) of this year’s graduates describe base pay as an important or very important factor in their career choice.
And their top three criteria after salary are all unashamedly financial: benefits were cited by 51 per cent of this year’s graduates, followed by future earnings outlook (45 per cent) and bonus potential (37 per cent).
Assumptions that the financial crisis would promote a less monetary attitude to the workplace look wide of the mark. Idealistic criteria are very low on graduates’ priority list when choosing a career.
Passion for the job is an important factor for just 16 per cent, as are the values and beliefs of an organisation. The ability to make a difference was the least important consideration of all, registering in just 4 per cent of graduates’ top three criteria.
Christopher Smith, reward information consultant at Hay Group comments: “The economic climate is clearly influencing graduates’ career decisions.
“Acutely aware of the difficult labour market and rising living costs, they are looking for a career path that makes financial sense first and foremost. Idealistic factors barely come into consideration.”
Yet graduates’ financial ambitions may be more realistic then they think.
Hay Group found wide discrepancies between what they expect to earn and graduate level salaries in the most common professional functions of mid-to-large private sector organisations – the UK’s main graduate employers.
On average, the Class of 2011 underestimates the starting wage they can expect across the six functions by almost Ã‚Â£7,500.
For example, graduates put a starting salary in the finance division at just Ã‚Â£18,880, but could actually expect over Ã‚Â£7,100 more. In reality, a graduate level employee could earn an average of Ã‚Â£26,000 in the finance function of a mid-to-large organisation.
In HR, graduates envisage a starting salary under Ã‚Â£19,700, but could actually earn almost Ã‚Â£26,300 on average – a difference of around Ã‚Â£6,500.
Christopher comments: “Confidence in the market is understandably subdued amongst the Class of 2011.
“Confronted by an uncertain outlook, graduates have lowered their remuneration expectations well below what they can expect to earn in the main functions of the UK’s largest graduate employers.”