Graduate recruitment numbers are on the up according to the findings from our most recent survey of graduate schemes. But while it seems that there will be more demand for graduates this year, this is not being translated into significantly improved starting salaries. Our findings suggest that median graduate starting salaries in 2013 will be £25,500, unchanged from the previous year.
While the numbers of graduates taken on in 2012 increased by just 0.1 per cent on the year before, organisations told us that they expected to take on 7.7 per cent more graduates over the course of 2013. And although some sectors such as finance look set to reduce numbers, the service sector and particularly retail look set to take on significantly more graduates than was the case in 2012. The retail sector is projected to increase its graduate intake by almost 30 per cent.
Although such figures are good news for graduates searching for a job, flat starting salaries mean that the real value of pay packets is eroded by increases in the cost of living. And this has been a trend for a number of years now, with most major surveys reporting no significant uplift in the salaries graduates can expect when they first join employers. For instance, both our own and High Fliers’ research have found that starting salaries have remained unchanged for four consecutive years. And although the Association of Graduate Recruiters predicts that salaries will rise by 1.9 per cent, this figure is based on an unmatched year-on-year comparison of median salaries, and therefore any reported increase will also be influenced by a change in the composition of the survey’s sample.
Our own calculation is based on a matched group of companies from one year to the next. And rather than looking at the average salary for all companies in 2012 and comparing this to 2013, we look at the average year-on-year increases at individual companies. What we found was that 72 per cent of employers are not planning to increase their graduate salaries in 2013.
While the majority of organisations each year have been freezing salaries, our research uncovered a note of caution for any employer that has done this consistently since the start of the financial crisis. Although each year the median increase in starting salaries was zero, over a longer term period, between 2009 and 2012, more than half the organisations in the sample increased salaries by 4 per cent or more. Such a trend suggests that even though salary freezes are widespread, employers need to consider increasing their starting rates if they are to remain competitive against rival recruiters.