Employers planning surge in graduate recruitment in 2014
According to Incomes Data Services’ (IDS) annual “Pay and Progression for Graduates” report, employers are expecting to hire 18% more graduates this year, following a modest upturn of 4.3% last year.
IDS says this is likely to be welcome news for the growing numbers of candidates chasing each job – especially as the research shows there were 60 applications for every vacancy in 2013 compared to 49 in 2011.
IDS’ research found that the finance sector is finally looking to recruit again, with graduate recruitment in financial services expected to increase by 42% this summer, following a fall of 3% in 2013.
The manufacturing and service sectors are also bullish, with both expecting to increase their graduate recruitment by 22%.
“Recruitment prospects for this year’s crop of graduates look brighter than they have for a long while as the number of job opportunities is set to rise sharply,” says Nasreen Rahman, assistant editor at IDS.
“Some sectors such as finance appear to be making up for lost time, aiming to recruit several times more graduates in 2014 than they did in 2013.”
But despite the recruitment upturn, the IDS research shows this is not translating into higher graduate starting salaries. The majority (57%) of employers froze their graduate starting salaries again last year, continuing a trend from the start of the recession, and 65% have not increased their rates for 2014. In both 2013 and 2014 the median “increase” in starting salaries was zero.
Law firms offered the highest median graduate salaries last year, at £35,000, followed by financial services firms with £26,500.
Just 22% of graduate employers now offer their new recruits a “golden hello”, down from half six years ago.
“Employers are keeping a tight lid on what they are willing to pay their new recruits,” Nasreen Rahman adds.
“Graduate starting salaries are still effectively frozen, so those fortunate enough to be recruited onto a training programme will be paid less in real terms than their predecessors as employers take advantage of the competition for places. The class of 2014 will be paid less than the class of 2008.”
Average pay for internships £17,500 as they gain in popularity as recruitment tool
IDS’s research also reveals the extent to which internships and industrial placements have gained in popularity as a means for employers to recruit talent and for graduates to enhance their career prospects.
Although internships have attracted some public criticism because some are unpaid, IDS’s research shows that interns were paid an average of £17,502 last year, with those on work placements paid £16,726.
Both have overtaken the traditionally established route of employers offering sponsorship to students during their studies in return for a promise to work for them after graduation. 42% of respondents offer internships and 39% had industrial placements, compared with 19% who have traditional sponsorship programmes for undergraduates.
“Despite some concerns that not all interns are being rewarded for the work they do, all of our extensive survey sample compensated their interns, recognising this as a good way to raise their profile and attract talent,” says Nasreen Rahman. “For students and graduates, both internships and work placements can be good ways to get a foot in the door.”
The IDS survey is based on responses from over 100 organisations, ranging from small independent firms to FTSE-listed companies and public and not-for-profit employers. The report is unique in that it gives detailed breakdown of salaries as well as salaries by graduate programme and recruitment numbers providing a more accurate comparison for benchmarking purposes than aggregate figures alone.
Incomes Data Services, part of Thomson Reuters, is the leading UK information and research service on employment issues, providing a range of publications for employers, trade unions, government departments and other agencies. For more information, visit: www.incomesdata.co.uk