Demand for graduates slips

January 8, 1999

Demand for top-flight graduates will slow this year, forcing many to try for lower level and even non-degree jobs, according to two reports.

The Association of Graduate Recruiters this week predicted that employer demand for graduates with good degrees would grow by just over 5 per cent in 1999. Last year, demand grew by nearly 14 per cent. The AGR, representing some 600 mainly blue-chip companies, found that many more recruiters intended to hold graduate intakes at 1998 levels.

But the Institute for Employment Studies' annual graduate review, due to be published next Friday, warns that only one in five of all graduates will find work in blue-chip companies. A substantial proportion of the remaining 80 per cent will be forced to compete for lower level jobs, some of which do not require a degree, according to the IES.

Carl Gilleard, chief executive of the AGR, said that there was no reason for graduates to worry, but he said: "There are signs that the current economic uncertainty is making employers think about recruitment this year. We will still have growth but the rate will slow."

Mr Gilleard said that the slow-down would work in favour of employers, in effect creating a "buyers' market". As a result average starting salaries for the bulk of graduates will increase by about 3 per cent to Pounds 17,000 this year compared with 5.4 per cent and Pounds 16,600 last year. Only 1 per cent of blue-chip employers surveyed offered starting salaries of less than Pounds 12,000 a year.

And if last year is anything to go by, salary premiums of about Pounds 1,000 will be offered to graduates with good degrees in certain high-demand subjects connected with science, engineering and information technology. Similar premiums could also be used to attract those with work experience. Last year employers paid an average premium of Pounds 2,000 for a graduate with a PhD.

Richard Pearson, director of the IES, which also carried out the 1998 survey for the AGR, urged graduates to consider their options carefully. He said: "It costs a lot more to go into higher education now and so students should not be misled by headlines saying that high-level graduate jobs are just waiting for them."

Mr Pearson said that many of the best blue-chip jobs would go to graduates of traditional research-led universities, but that such companies would do well to look at other universities where they will find graduates with good degrees in high-demand subjects.

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