Average graduate starting salaries are expected to rise by 4.2 per cent to £19,600 in 2001/2002, continuing to outstrip inflation, according to figures published on July 15 by the Association of Graduate Recruiters (AGR) at its annual conference. Starting salaries are predicted to increase further to an average of £20,300 in 2002/2003.
AGR’s half-yearly review of graduate salaries and vacancies – based on the responses of leading UK employers – also reveals that 2001/2002 starting salaries range from £11,000 to £37,000. Graduates entering the legal sector can still expect the highest median starting salaries (£28,000), followed by those in banking and finance (£23,500). The lowest median starting salary is anticipated in the accountancy sector (£17,500).
As the war for talent escalates, a quarter of companies are offering ‘golden hellos’ or some form of joining payment to attract top talent. These range from £500 to £11,000, with a median payment of £1,500.
However, vacancies are expected to fall by 6.5 per cent overall during 2001/2002. This contrasts sharply with the 14.6 per cent increase in vacancies predicted this time last year, perhaps reflecting changes to the market conditions and economy since September 2001.
But this fall is not uniform across all sectors. Thirty-two per cent of employers intend to increase their graduate intake and a further 29.5 per cent expect it to remain at the same level as last year, suggesting that employers have confidence in the labour market and business stability in the medium term. The growth in vacancies is highest for energy and water (29.2 per cent), while the sharpest fall is forecast in the IT, software and telecomms sector (39 per cent).
Anticipated shortfall has dropped four per cent since this time last year, with 14 per cent of employers now anticipating that they will not fill all their vacancies. Shortfalls are most likely in the food, drink and tobacco sector.
Carl Gilleard, chief executive of AGR, said: "Although employers continue to be cautious in the current economic climate, it’s encouraging that many are planning to maintain or increase their graduate intake over the next year. The war for talent is keeping starting salaries on an upward path. But it’s important to note that the market is not buoyant in all sectors. Some graduates, particularly those in IT, software and telecomms, will face stiffer competition than others to get the job they want."