Graduate employers may cast net wider for recruits

Employers believe a rise in university tuition fees will result in a less diverse pool of graduates, a survey of some of the biggest graduate employers in the UK has found.

January 25, 2011

The 222 companies polled by the Association of Graduate Recruiters also predict that future graduates will expect higher starting salaries as a result of the increased investment in their education, despite the fact that employers are unlikely to pay any more.

In response to the threat to socio-economic diversity, Carl Gilleard, chief executive of AGR, said a “sizeable minority” of employers were now considering new entry routes for school leavers. “Diversity in the workforce is something that employers have been concerned about for some time,” he said. “There is an advantage in having more diverse routes into your talent pipeline. Going to university for a three or four-year degree course isn’t necessarily the best option for everybody.”

The AGR survey found that the graduate job market may be turning a corner. Employers reported an 8.9 per cent rise in the number of graduate vacancies in 2009-10 – the first increase since the recession began. The upward trend is predicted to continue, with a further increase of 3.8 per cent expected in 2010-11.

But the poll also found that employers feared there would be a lack of candidates with postgraduate qualifications in future.

More than a quarter (28.3 per cent) of AGR members said they planned to make changes to their recruitment practices as a result of the Browne Review, including developing closer relationships with universities, programmes aimed at undergraduates while they are still studying, and working with a wider pool of universities.

Earlier this month, the accountancy firm KPMG announced a new scheme to hire people at age 18, under which some recruits will receive a salary and have their course costs met in full as they study for a degree while also working for the company.

However, the majority of those polled said the changes to the higher education funding system was unlikely to result in a change to the quality of degree courses in the UK.

Employers warned that they would not increase their own financial rewards, even if tuition fees rose. The median starting salary was fixed at £25,000 for the second year in a row, and is predicted to remain the same next year.

Employers are also holding back other incentives, such as a “golden hello” lump sum, as demand for jobs still outstrips supply.

David Willetts, the universities minister, said a degree remained a good investment in the long term although the job market remained very competitive for new graduates.

Nicola Dandridge, chief executive of Universities UK, said the survey was a “clear indication” that UK graduates were still highly valued by employers.

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