Graduate recruitment picture unpredictable


Two new surveys agree that 2002 was an awful year for graduate recruitment but take widely diverging views on the prospects for 2003.

Employment researchers Income Data Services (IDS) say that graduate recruitment slowed sharply in 2002 and see few signs that demand will pick up in the coming 12 months. But the Association of Graduate Recruiters’ (AGR) take on the graduate market in 2003 is considerably more optimistic.

IDS attribute the sharp deterioration in the graduate recruitment market in 2002 to continuing economic uncertainty, and falling business demand.

Graduate recruitment fell by 3.4 per cent in 2002, with the largest cuts taking place in manufacturing and finance. The overall drop in recruitment in the service sector was lower at 5.3 per cent, but there were wide variations in demand.

This downturn in recruitment activity has also had a knock-on effect on starting salaries. Ranging from £9,500 to £35,000, the median graduate starting salary of £19,000 in 2002 was unchanged from the median the previous year. Looking ahead to 2003, the median is expected to rise modestly to £19,625 for this year's intake.

The IT sector was also badly hit. Technology services giant EDS recruited just 12 graduates in 2002 compared to 400 the previous year. In contrast, six retail companies, including the ASDA, Arcadia Group and Somerfield, increased their demand for graduates.

But despite the weakness of the graduate market, around one in five employers surveyed said that they were unable to fill all their graduate vacancies in 2002. Shortfalls were most commonly reported in engineering functions.

The picture in the public sector was entirely different, however. Demand for graduates rose by 13.3 pr cent in 2002, mirroring the overall recruitment picture of falling private sector demand being offset by large increases in the public sector workforce.

The AGR’s figures for 2002 show an even more marked fall in activity for 2002 – a 6.5 per cent drop in vacancies. But they predict that employers will recruit 7.9 per cent more graduates this year than they did in 2002.

Nearly half of recruiters told the AGR that they are recruiting more graduates this year than in 2002, while less than a third are cutting back on their vacancies.

The AGG also believes that starting salaries will rise by 2.5 per cent overall, reaching a median of £20,000 this year. Graduates entering an investment bank or fund management firm stand to receive the highest median starting salaries (£35,000), followed by those in consulting and business services (£28,500) and law (£28,000).

The AGR says that the biggest growth in graduate recruitment for 2003 will be in telecommunications (up 61.3 per cent), IT companies (up 59.1 per cent), consulting and business services firms (up 36.4 per cent) and commercial and retail banking (up 36.1 per cent). The largest drops in vacancies are in media companies (down 42.6 per cent), motor manufacturers (down 19.5 per cent) and chemical or pharmaceutical companies (down 13.2 per cent). Vacancies in the public sector will fall by 6.3 per cent.

By location, the biggest growth in vacancies is in the Midlands (up 18 per cent), East Anglia (up 17.1 per cent) and Wales (up 16.5 per cent), while Ireland will see vacancies fall the most - by 7.7 per cent.

Although graduate recruitment in London is set to remain virtually static (up one per cent), this AGR says that the capital still accounts for the largest proportion of expected vacancies in 2003 - nearly half of all graduate positions are likely to be in or around London.

The IDS figures are part of their annual survey of graduate pay and progression covering123 major employers across all sectors of the economy. The AGR January Graduate Recruitment Survey 2003 is based on responses provided by 222 AGR members.