COLD COMFORT FOR CLASS OF 09
COLD COMFORT FOR CLASS OF 09
First confirmed recruitment figures for the year
offer little solace for hard-pressed graduates
One in four graduate vacancies disappear
Competition intensifies with an average of 48 applications for every job
Quality of job applications is up as shaken grads sharpen up their act
Average graduate salary remains frozen at 25,000
Recruiters predict no change for 2010
Graduate jobs have been cut by one quarter this year according to the Association of Graduate Recruiters (AGR), which published the summer edition of its bi-annual survey today (Monday 6 July), the opening day of its annual conference. Vacancies have plummeted by 24.9% in the latest recruitment round approaching levels not seen since the last recession in 1991 and far exceeding the modest dip of 5.4% predicted by the same recruiters in February.
The gloomy picture painted by todays survey is one of not only fewer jobs but also of stagnant salary levels and much increased competition. Even the engineering sector has experienced vacancy cuts of over 40% and eight sectors have experienced reductions amounting to hundreds of recruits, with IT and banking worst hit. The only sector to buck the trend is energy, water or utilities with a 7.1% rise in vacancies. The vast majority of employers (91.9%) are expecting to fill all of their vacancies this year with recruitment shortfalls of previous years now a distant memory.
Carl Gilleard, Chief Executive of the AGR, said: I wish we had better news to announce today but we cannot hide from the fact that dramatic vacancy cuts will make the job search very tough for graduates both this year and probably next year too. However, It is important to look at this in context and to point out that very few employers have abandoned their graduate recruitment programmes altogether and most are likely to reinstate recruitment levels at the first sign of an upturn in the economy.
I would also like to reassure graduates that though things will be harder, their degree is a valuable asset and that there are still opportunities out there for those who do their research and focus on quality rather than quantity of applications. It is heartening to see that the class of 2009 appears to be equal to this challenge with many of our members reporting a marked improvement in the quality of graduate applications this year.
One small consolation is that paid graduate internships have been relatively unaffected by the downturn and most employers are offering at least 10 placements. The Governments new internships scheme, while not a panacea, will also help many graduates this autumn.
The AGR continues to campaign on behalf of graduate recruitment in the UK and over the next year we will be focussing all our efforts on discouraging short-termism and ensuring employers do not back away from their graduate schemes.
The AGR is the independent voice of graduate recruitment in the UK and its bi-annual survey provides the most extensive and detailed insight into the state of the graduate jobs market. Todays edition is based on the responses of 226 graduate recruiters in the UK across 15 sectors who will employ a total of 12,650 graduates in 2009. The research was carried out by trendence in May and June 2009.
A majority of employers (62.7%) are offering fewer vacancies than last year with the average number of vacancies now just 20 per employer, down from 35 in 2008. The drop of 24.9% in vacancies in todays edition of the AGR survey has far outstripped the prediction of 5.4% made by employers in the winter edition of the AGRs survey in February.
In terms of sectors, accountancy and professional services has increased its share of vacancies while engineering and industrial companies has tumbled to 7.5% from the 10.1% predicted in February. IT, engineering, construction and investment banking have all seen dramatic job cuts of more than 40%, while law has experienced reductions of 19.1%. Even the public sector has reported a decline of 8.1%. Only one sector, energy, water and utilities, a relatively small recruiter of graduates, has seen a growth in the number of vacancies (7.1%).
Employers are remaining cautious in terms of vacancy predictions for 2010 with 53.4% expecting little change. While 22% are cautiously optimistic, 11% think there may be worse still to come. However, only 3.4% expect another severe cut in vacancies.
The majority of employers (52%) are still offering more than 10 paid internships each year, mostly over the summer vacation, although they report that fewer internships are being converted into permanent jobs.
While Februarys vacancy cut predictions proved to be far short of the mark, employers were spot on in terms of salary forecasts. The average graduate starting salary has frozen for the first time in the history of the AGRs survey at 25,000. A majority of employers (57.7%) are offering graduate employees salaries of between 22,001 and 27,000 this year.
The three top sectors in terms of average starting salaries are law firms (37,000 a 1% cut on last year), investment banks or fund managers (36,000), and consulting or business services, which is the only sector to buck the static trend with a 21.6% increase on last year to 31,000.
London, as always, is leading the way with an average starting salary of 29,000. Wales and Northern Ireland are at the bottom of the salary table at 16,000 and 13,000 respectively. In terms of job types, investment banking and legal work share the top spot while accountancy, previously sixth in the table, has tumbled to second from last place.
The overall freeze on starting salaries looks set to continue in 2010 with almost half (48.5%) of employers expecting no change and 25.7% only planning to offer a cost-of-living rise. One fifth of employers felt unable to make a prediction because of the current economic instability.
Applications and selection criteria
Dramatic cuts in vacancy levels have unsuprisingly translated into much greater competition this year with nearly half of employers receiving more than 50 applications for every graduate job.
Competition is particularly fierce in investment banking, banking or financial services, retail and engineering and the industrial sector, all of which received more than 50 applications per job. One fifth of employers received between 501 and 1,000 applications this year and 25% had to work their way through 1,001 to 2,500 applications.
In terms of process, more employers than ever are insisting on online applications only the figure has risen from 74.3% in 2008 to 81.1% this year. Single rather than rolling start dates remain the preferred option for most employers and September the most common starting month.
There is evidence to suggest that intense competition is causing erratic graduate behaviour in some cases with candidates applying for jobs they would not normally have considered or are not passionate about.
Perhaps the most notable aspect of this years applications has been their improved quality. It seems this years graduates are taking particular care over their applications in the face of increased competition with 40% of employers reporting higher standards this year.
Retention, which has previously been a major challenge for employers of graduates, has predictably been less of an issue this year as flighty Generation Y has its wings clipped by the recession. For graduates taken on one year ago retention of between 91% and 100% was achieved by 71% of organisations. The survey also examines retention rates for graduates recruited three and five years ago as well as the reasons most commonly cited for graduates leaving an organisation.