The latest research from the Association of Graduate Recruiters paints a pretty gloomy picture of the job market for university students about to head out into the big wide world: vacancies are down by a quarter, salaries are stagnating, and they’re likely to be competing with about 50 people for every vacancy. Just what they'll want to hear as they bask in post-finals euphoria. But will companies live to regret these cutbacks, just as they did after slashing graduate numbers in the aftermath of the dotcom bust?
The bad news is that the market has deteriorated much more substantially than most recruiters expected. Back in February, the AGR’s winter survey found companies predicting a drop-off in vacancies of just over 5% this year - whereas in practice it’s been almost 25% (which doesn’t say much for their economic analysis skills, it has to be said). That’s the biggest slump since 1991. IT, engineering and banking have been particularly hard hit, with vacancies dropping more than 40%, but most industries are down (even the public sector, which fell 8%). Only the utilities sector bucked the trend – presumably because we still need electricity and water – but then these companies hardly take on any graduates anyway.
The inevitable consequence of there being fewer jobs is that there’s more competition for each place. Almost half of all recruiters received over 50 applications for every single vacancy, and one in four found themselves wading through 1,000-2,500 application forms. Not surprisingly, over 90% of employers now expect to fill every available vacancy this year – which wouldn’t have happened in the good times. And of course, higher demand means less incentive to increase salaries – for the first time in the history of the survey, the average starting salary is the same as it was last year, i.e. £25,000. (Though it’s worth pointing out that law and banking jobs may be thinner on the ground, but they’re still paying 37k and 36k respectively - so there’s still a battle on for the top talent.)
You may also be unsurprised to learn that the recession has made it easier to keep hold of grads – the majority of firms now boast retention rates above 90%. So we’re not sure whether to be surprised by the Institute of Leadership & Management’s latest study, which suggests that some of those in graduate roles are unhappy with their lot. Apparently half believe their companies are badly-managed, a similar proportion wants more opportunity to innovate, and one in three feels ‘stifled and undervalued’ by their senior managers. It’s easy to believe that the development of the next generation of leaders might be some way down the corporate agenda at the moment, which isn’t ideal in the longer term. On the other hand, at least these lucky graduates actually have a job at the moment, which is more than can be said for many of their contemporaries...
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