Press releases

Graduate market remains buoyant but predicted salary rise lowest for five years

Research published today (Tuesday 7 February 2006) by the AGR (Association of Graduate Recruiters) reveals that graduate vacancies will continue to grow in 2006 for the third consecutive year. But almost half of recruiters are not confident that they will be able to fill all vacancies.

The AGR Graduate Recruitment Survey 2006 is the definitive independent bi-annual survey of some of the UK’s leading employers. The Winter Review analyses predictions for the forthcoming year including graduate vacancies, salaries and other key trends. The survey, carried out by Hobsons, is based on the responses of 222 AGR members – many of the UK’s largest graduate recruiters in both public and private sectors. The research for this latest report was carried out during November 2005.

The survey reveals that the number of graduate positions is predicted to increase by 14.6% - significantly higher than last year’s vacancy increase of 5.1%.

Graduate salaries also look set to continue rising – AGR members are predicting a median starting salary of £23,000 in 2006. This is only an increase of 2.3%, the smallest increase for five years, but employees do not foresee starting salaries to be a recruiting challenge in 2006.

Despite increased numbers of graduates in the UK a significant number of employers are still experiencing some difficulty in filling all vacancies. Reasons cited for this include ‘Not enough applicants with the right skills or qualifications’ and ‘Graduates’ perception of the industry sector’.

Carl Gilleard, chief executive of the AGR, comments: “For the third year running vacancies for graduates are predicted to rise, which is great news for the ‘Class of 2006’. Starting salaries are also set to increase, with the graduate recruitment market remaining buoyant, and employers continuing to acknowledge the additional contribution to the bottom line that graduates bring.

“However, final year students should be aware that nearly half of recruiters expect to face difficulties in fulfilling recruitment objectives – with the largest factor being a lack of applicants with the right skills. Employers are likely to be looking to graduates who can demonstrate softer skills such as team-working, cultural awareness, leadership and communication skills, as well as academic achievement.”

Vacancy levels

For the third consecutive year, employers are predicting an increase in graduate vacancies with around one in four vacancies in accountancy and professional services, either within accounting firms or financial institutions, or accountancy roles within organisations in other sectors. Law and investment banking are also forecast to be recruiting large numbers of graduates.

The greatest percentage increase in vacancies is expected in manufacturing engineering, sales, research and development, IT and investment banking.

Starting salaries

The median starting salary for graduates in 2006 is predicted to rise to £23,000. This is an increase of 2.3% on last year, one of the smallest salary increases in the AGR survey’s history, just slightly above expected inflation.

The biggest increases are reported by organisations in the public sector (9.5%), telecommunications (4.7%) construction (3.9%) and oil (3.7%). For the fifth year in a row, several sectors predict no change in starting salary for graduates – including law, insurance, banking or financial services and IT. Investment banking starting salaries remain unchanged for the third year at £35,000.

Bonuses and allowances

The number of organisations planning to pay graduates a lump sum signing-on payment has increased only slightly to 38%. The median bonus paid has also remained the same for the third year running at £2,000. The majority of organisations offering such a bonus will award the graduate when he or she starts work.

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www.agr.org.uk

For further information please contact

Victoria Harris or Nicola Dodd at Colman Getty PR

Tel: 020 7631 2666 Email: victoria@colmangettypr.co.uk

Notes to Editors

1. Carl Gilleard, chief executive of AGR, is available for interview.

2. The AGR Graduate Recruitment Survey 2006 is based on responses provided by 222 AGR members.

3. Press copies of the report are available on request from Colman Getty PR. The full report is available free to AGR members and is available to non-members priced £200, visit www.agr.org.uk for further details.

4. The AGR (Association of Graduate Recruiters) is the recognised national voice for all employers involved in graduate recruitment. Established in 1968, the AGR now has around 600 members including a significant number of public and private sectors businesses, which collectively employ 20 per cent of the graduate market. It represents those providing a high proportion of graduate vacancies in the UK and is increasingly involved with research in and around the recruitment needs of employers.

5. The AGR Graduate Recruitment Survey has been conducted on behalf of the AGR by Hobsons’ Planning and Research Division. Hobsons is the single largest provider of global education and recruitment information services and research, and as such is the market leader in helping organisations around the world practice excellence in student recruitment planning, development and delivery.

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