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Graduate Recruitment Projected to Rise

Date added: Monday 16th April 2012

Graduate recruitment is expected to rise in 2012 compared with 2011 but with so many graduates competing for every vacancy firms see no need to increase starting salaries.

A survey by Incomes Data Services (ICS) forecasts a rise of 9.1% in graduate recruitment this year compared with 2011. According to IDS, the services sector is planning to boost graduate numbers by 38% in the coming year, while the public/not-for-profit sector expects to increase intake by 6.7%, a turnaround from the 5% reduction last year.

Nasreen Rahman, principal researcher for IDS explains, "Demand for graduates is expected to be relatively buoyant in 2012, but this is unlikely to impact pay levels. With economic sentiment picking up, employers are starting to expand their graduate programmes further, with some employers now re-opening schemes that had been put on ice during the downturn."

So much for the good news as Nasreen Rahman goes on to say "However with so many graduates competing for positions it is clear employers see little need to boost starting salaries."

Salaries remain static

IDS explains that the rising cost of living (as measured by RPI currently at 3.7%) means that graduates entering the workforce this summer will find themselves worse off than their predecessors were almost a decade ago, as starting salary rates for graduates lag further behind inflation. According to IDS, the median starting salary for graduates will be 25,000 this year, unchanged from 2011. When adjusted to account for inflation, this reveals a 2% pay cut from 19,020 in 2011 to 18,705 in 2012.

IDS explain that there were 46 applicants for every graduate vacancy in 2011, up 12% from 41 in 2010. Legal firms are projected to pay graduates the highest starting salaries this year, with pay of 36,000 at the median, which remains unchanged from 2011. In contrast, the lowest starting salaries in 2011 were paid by the public/not-for-profit sector (22,958). Starting salaries for roles in banking and finance are also projected to remain unchanged this year, at 31,250, while starting salaries in professional services remain at 24,750.

IDS Press Release "Graduate starting salaries to fall to lowest real-term level since 2003" issued 16 Apr 12 for further information.

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