Bye bye to 'golden hello'

January 9, 1998

EMPLOYERS will be reluctant to offer "golden hellos" to attract fee-paying graduates, but will increasingly turn to sponsorships and salary differentials to lure high-fliers, according to the Association of Graduate Recruiters.

The Graduate Salaries and Vacancies Survey 1998, conducted for the AGR by the Institute for Employment Studies, predicts that investing in higher education tuition fees will yield an acceptable return as graduate vacancies and starting salaries continue to increase. Extramural activities such as work experience will be particularly well rewarded, it says.

Graduate recruiters will need 18.5 per cent more recruits in 1998, but they expect a struggle. In 1997 vacancies grew by 13.1 per cent, compared to 1996, but over half of recruiters were unable to fill them.

Average graduate starting salaries in 1998 are expected to rise above average growth, from a 1997 median of Pounds 15,500 to Pounds 16,000. At the top end of the starting pay scale, salaries are expected to rise 5.1 per cent to Pounds 20,000. Only 10 per cent of recruiters pay less than Pounds 14,000.

Salary progression for graduates increases rapidly. Graduates who started work in 1996 on an average starting salary of Pounds 14,774 were able to command Pounds 17,000 in 1997. Graduates who started work in 1994 on Pounds 13,500 progressed to Pounds 21,000.

Roly Cockman, chief executive of the AGR, said: "Even with the projected financial implications for students, university education is a very good investment."

More employers than ever - three-quarters of survey respondents - are providing work experience for undergraduates, and are offering higher salaries for students with such experience.

In 1997, over 50 per cent of employers offered paid differentials to reward work experience and outside skills, compared to 34 per cent in 1996. More sponsorship deals for final-year students will be on offer in 1998. In 1997, 40 per cent offered sponsorship.

But the survey found a general reluctance to turn to golden hellos, in response to mounting student debt levels, and the spectre of tuition fees. Employers recognised that graduates face increasing debt burdens, and expressed concern, but the survey found that there was a stand-off between competing organisations over golden hellos. "The largest factor which could trigger the introduction of golden hellos was the intention of key competitors," the report said.

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