Graduates’ pessimism over labour market prevails, despite fresh job opportunities
Graduates believe that they have fewer job opportunities than five years ago, despite most companies continuing to offer graduate schemes.
Two thirds of graduates say there are significantly fewer graduate schemes than five years ago
But 85 per cent of companies have not cut back spending on schemes
More graduates are prioritising career progression and the ability to make a difference over bonuses and benefits
Starting salary expectations are lower than reality, in line with last year
Two thirds (64 per cent) of graduates believe that significantly fewer schemes are on offer than in 2007 and three out of five (61 per cent) say the majority of their classmates have been unable to secure a graduate job at all.
However, 85 per cent of companies say that they have not cut back their graduate schemes in the last five years, and almost all (98 per cent) report that their scheme is important to their organisation’s future.
Hay Group’s Class of 2012 study is based on the views of 600 graduates and interviews with senior managers at 40 of the UK’s largest graduate employers, including Coca-Cola, Marks & Spencer, Jaguar Land Rover, Royal Mail and Caterpillar.
There is clearly a gap between graduates’ perceptions of the job market and the reality. Although the latest labour market statistics showed that unemployment has started to drop and pay has increased slightly*, there is still a very gloomy perception of the UK job market. Our research suggests that this is starting to filter down and is affecting graduates’ confidence. Christopher Smith
Industrial Brands Sector Leader at Hay Group
Selling themselves short
Many graduates underestimate how much they can expect to earn. However, average entry-level wages have risen over the last year in most sectors (see Table 1).
In starting a graduate position, two thirds (67 per cent) of graduates expect a salary of £15-20,000 but Hay Group’s data shows that in key business functions such as finance, legal, engineering, IT, HR and sales and marketing, graduates can expect to earn between £25-30,000.
Christopher Smith, comments: “Perhaps unsurprisingly, confronted by a continuingly uncertain economic outlook, graduates have lowered their pay expectations.
“It is important that individuals are aware of what they can realistically expect to earn with the UK’s largest graduate employers or graduates risk selling themselves short and holding back their future earning potential.”
Heart over head
Surprisingly, Hay Group’s research shows that graduates are placing less importance on their overall earnings and benefits than last year, with less than one in ten (8 per cent) stating that base salary is one of their top three considerations when applying for a job. This is in contrast to almost half (45 per cent) in 2011.
In addition, just a year ago, more than a third (37 per cent) of graduates considered bonus potential to be important, however this year the figure has fallen to just 7 per cent.
Similarly, only 5 per cent are now considering their pensions and healthcare options to be important, compared to half (51 per cent) in 2011.
Instead, graduates now appear to be more interested in the ability to make a difference, with (51 per cent) considering this to be a key factor in their job choice, compared to just 4 per cent last year.
So what can graduates do to get ahead of the recruitment claim?
The majority of companies (93 per cent) reported that the best way for graduates to ensure they are ready for the work place is to carry out work experience in a relevant sector. Almost three quarters (73 per cent) also recommended that graduates make sure that they know all about the company before applying for a scheme.
Helen Alkin, Recruitment Manager at Marks & Spencer says: “Whilst the temptation might be to apply to 20 or more companies, this will only dilute the quality of their application and demonstrate that they have not really done their homework.”
Table 1: Pay data comparison between 2012 and 2011
Back to top
About the study
Hay Group’s research is based on responses from 600 2012 graduates who have applied for at least one scheme and interviews with HR professionals at 40 of the UK’s largest graduate employers. Average salary data is taken from Hay Group’s remuneration database, PayNet, which is based on the salary data of over 10,000 graduate level wages in over 600 mid-sized and large private sector organisations in the UK.