Graduates set to ride out choppy UK jobs' market

2005

Demand for graduates from employers is likely to get more, not less, fierce over the next year, despite growing uncertainty over the UK jobs' market, a new survey has suggested.

Yet the lure of going it alone and starting your own business also appears to be strong among students.

The jobs' study by specialist journal IRS Employment Review found employers who recruited new graduates reported a strong demand in 2004/05, with more than half wanting to recruit as many graduates as in the previous year.

Three out of 10 wanted to recruit more and only one in six said they had reduced graduate recruitment.

The overall recruitment picture is one steady as she goes, with no material changes in the labour market for new graduates, it predicted.

There has been no boom and the growth in graduate vacancies has simply kept pace with university output, it added.

While the difficulties employers faced in recruiting suitable graduates had not got worse, nevertheless four out of 10 organisations said they did have problems recruiting the graduates they needed.

The modest upswing in demand was being matched by an equally modest rise in the average starting salary for new graduates, rising by 3 per cent, said IRS Employment Review.

Other key points of the survey included the finding that the growing proportion of graduates with good degrees – firsts or upper seconds – was making it more difficult to choose between applicants.

Employers did not feel age discrimination legislation would have a substantial impact on graduate recruitment, although the full implications would not become clear until after October next year.

The most effective attraction methods were national newspaper advertising, recruiters' corporate websites and job boards.

And while eight out of 10 graduate recruiters now had their own website, one in three was unaware that disability discrimination law applied to online recruitment.

IRS Employment Review recruitment and retention editor Neil Rankin said: "Our latest survey shows that new graduates can continue to feel confident about their job prospects.

"The claim, by some commentators, that the UK is producing too many graduates is not borne out by our findings; in fact, a substantial minority of employers still has problems recruiting the graduates they need," he added.

On entrepreneurship, a separate study by the National Council for Graduate Entrepreneurship has reported that three quarters – 67 per cent – of students would possibly or seriously consider setting up on their own or with others in the foreseeable future.

London graduates are most likely to think this way (72 per cent), followed by the Midlands, the North West and South East.

But graduate recruiters need not panic just yet. When it comes to actual intentions, just four per cent of students said they planned setting up their own business as a likely next step upon graduation.

The most popular option was still to get a full-time job (59 per cent); followed by continuing in higher education (13 per cent) and taking a year out (10 per cent).

Ian Robertson, NCGE chief executive, said: "While many of the skills acquired at university, such as constructing a debate and presenting ideas, are invaluable to aspiring entrepreneurs, our institutions need to play a more active role in creating the kind of innovative environment where enterprise can flourish, providing budding entrepreneurs with the necessary inspiration and business acumen to take their ideas forward."

Financial worries and high levels of student debt were the two most likely reasons for deterring students from starting up a business, it added.

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