Graduate starting salaries are predicted to rise for the first time in three years in 2012, although the number of vacancies available in the UK will contract slightly, new research has forecast.
Salaries for university leavers are expected to increase by 4 per cent to Ã‚Â£26,000 this year after “an unprecedented period of stagnation”, according to the latest survey from the Association of Graduate Recruiters (AGR).
The starting rate had remained at Ã‚Â£25,000 since 2009. Between 2006 and 2008, salaries grew by an average of 2 per cent a year, following a peak of 7 per cent in 2005.
Investment banks continued to offer the highest graduate starting salaries in 2011 at Ã‚Â£38,250, followed by law firms at Ã‚Â£37,000, found the study. Regionally, London saw the highest median rate of Ã‚Â£27,250 – but this still trailed behind the average starting wage in Europe (Ã‚Â£28,500) and the USA (Ã‚Â£30,250).
Carl Gilleard, chief executive of the AGR, said: “The predicted increase to graduate salaries is significant and sizeable, particularly given the context of starting salaries remaining stagnant for the past three years. This will no doubt be welcome news to the government and the higher education sector, but moreover to graduates themselves.”
The bi-annual survey of more than 200 AGR members – who recruited 21,000 graduates last year – also found that while the number of graduate vacancies increased by 1.7 per cent in 2011, 2012 job places were forecast to drop by 1.2 per cent.
But Gilleard added that despite this prediction, the graduate market remained “relatively stable” against the backdrop of an uncertain economy.
Financial services firm PwC – the UK’s largest private-sector recruiter – said it had opened applications early for this year’s graduate intake of 1,200, due to increased demand.
“Once again, this year we’re attracting record levels of interest, as students respond to fears in the economy by starting their career decision process earlier and with more focus,” said Gaenor Bagley, PwC’s head of people.
She added that interest in the company’s regional positions was seeing “a renaissance” as students became less “London-centric”.
Fellow accountancy firm Ernst & Young said it was recruiting at more than pre-recession levels, but urged university leavers to gain some professional experience in an increasingly competitive labour market.
“To stand out from the crowd, graduates need to build up their work experience,” said Stephen Isherwood, head of graduate recruitment at E&Y.
“It’s a great way of showing potential employers that you have initiative and are equipped with skills for the workplace. We’re aiming to recruit over 50 per cent of our graduate trainees from our various work experience and internship programmes, so it can also provide a real foot in the door.”
The AGR research also revealed that graduate employers were wary of two-year degree programmes, which condense academic content from three to two years of study.
While half of the organisations had not heard of this new type of course, the remaining were concerned that students would be prevented from developing skills or participating in industry work experience due to heavy workloads.
The survey also found that nearly all recruiters (96 per cent) were planning to use online promotions – such as social media, job boards and company websites – to target students; although the vast majority (89 per cent) were still planning to visit university campuses.