The uncertain economic climate is beginning to have an impact on graduate careers and salaries, a survey of employers has found.
Increases in graduate starting salaries are slowing down, graduate job vacancies have fallen and graduates are choosing careers with more job security rather than riskier enterprises, according to a report on data gathered for the Association of Graduate Recruiters' graduate salaries and vacancies annual review.
A survey of 178 employers who provided information for three recruitment years, from 1999-2000 to 2001-02, shows that average annual increases in graduate salaries are expected to fall from 5.1 per cent last year to 3.2 per cent this year.
AGR members predict an overall 4 per cent decrease in the number of graduate job vacancies, with some industries making huge cutbacks - such as electronic and electrical engineering, which predict that vacancies will fall by 56 per cent. But some industries, such as energy and water suppliers, predict significant growth.
Graduates reacted to the shifting market by applying in larger numbers for "safer" jobs. In the public services, the number of applications per graduate vacancy has risen from ten 18 months ago to 25 this year.
There is still a strong demand for graduate recruits, with 43 per cent of AGR members reporting a shortfall last recruitment year.
The survey says top graduate starting salaries have risen to £35,000, and should reach an average of £20,000 this year. The bottom 10 per cent of graduate recruits will earn less than £17,000. Graduates with five years of service now typically earn about £10,000 more than those with just a year under their belt.
The survey shows there is an undersupply of key generic and personal skills among graduates. The biggest skills gaps, rated as most important by employers, are in motivation and enthusiasm, interpersonal skills, team working, oral communication and flexibility.
Carl Gilleard, chief executive of the AGR, said: "It is encouraging that some employers are maintaining their graduate intake despite the economic climate. The lessons learned in the early 1990s are clearly being taken on board as employers recognise the dangers and cost implications of stopping graduate programmes completely.
"But graduates need to be on the ball, flexible about their preferred industry choice and clear about the skills employers are looking for."