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Higher skills, but for what jobs?

Douglas Fraser | 12:26 UK time, Tuesday, 6 July 2010

Two years after the banking crisis, with a new government pledging to "rebalance the economy", to which recruiters should this summer's graduates be posting their job applications?

Engineering? Science? No, it's banking, finance and accountancy. If they want big salaries, it's investment banking.

And of course, they've got to go to London and south-east England, which together have more than half of graduate vacancies, at least from the bigger companies.

The average UK starting salary for a graduate is stuck for the third year at £25,000.

In London, it's £28,000 and for most of the rest of the UK, including Scotland, it's £23,000.

Anecdotally, that's a lot more than some are having to settle for.

Scattergun applications

The figure comes from the most recent survey from the Association of Graduate Recruiters (AGR), showing how tough going it is for those now leaving university.

Vacancies are down 7%, after a 9% fall last year.

The 200 larger recruiters that contributed to its research say they're more likely to look for 2:1 degrees, and there's a sharp increase in the numbers expecting relevant work experience.

A growing number, up to 7% of them, are only bothering to look for graduates from certain universities.

And a trial is under way to look beyond the blunt instrument of the traditional degree classifications.

Eighteen universities are trying out a Higher Education Achievement Report, which will include course marks, extra-curricular activities and employability skills.

It's a hirers' market.

Many recruiters say the quality of application has gone up, but they are also under pressure from the sheer weight of numbers.

Graduates are firing off applications in huge numbers, and sometimes in a scattergun approach, meaning the 69 applications for every job - more than double the number two years ago - may not be as bad as it looks.

Across 200 companies with 18,000 vacancies this year, they report nearly 700,000 applications.

A tenth of the recruiters surveyed say they've received more than 10,000 applications each.

Pulling pints and shelf-stacking

The numbers are swelled by those who graduated last year.

A recently-published survey by university career advisers found around 20,000 (about a tenth) are unemployed, and 50,000 more are under-employed - not using the skills they've gained, often in pubs and restaurants, unskilled retail jobs or the grimmer end of the call centre business.

The straits in which graduates find themselves is clear from speaking to smaller businesses.

One pub in Glasgow's west end says almost every second person coming through the door during the day is asking if there are jobs on offer.

The AGR research shows how some sectors are doing better than others.

Investment bank jobs, which are coming close to filling half the gap created when they shed staff two years ago, are paying a median £35,000.

A legal job will pay slightly more. But the law is one of the toughest areas for finding a job at all.

It is telling that the spectrum of starting salaries puts engineering and industry close to the bottom, at £23,000, with that sector reporting a decline of one fifth in the number of jobs available.

That tells you much of what you need to know about the challenge of economic rebalancing.

It's not what I'm hearing from Aberdeen, however, where the offshore sector is keen to recruit young engineers.

It's also worth noting one response from a company in the fast-moving consumer goods sector - with the sharpest vacancies fall of any - that it has shifted its recruitment to non-graduates, as it has found graduates "may not be the best fit for the company".

It reports they lack the employability skills for the roles previously offered to them.

Skill shortages

It's also worth noting that IT is seen as a sector with weak recruitment, when it's also seen as the sector that will see skill shortages before too long.

The short-term market message is very different to the long-term interests of the economy.

Capita Learning & Development has responded to the AGR figures with a warning about that skills gap.

Although you might say it has a vested interest in doing so, it says 70% of business leaders fear that inadequate staff skills are the greatest threat to their ability to capitalise on the recovery: "More than half admit their under-trained workforces is struggling to cope with expanded job remits following waves of jobs cuts during the recession".

The public sector has been a place graduates can go to take up the slack when private sector jobs decline.

The survey found an increase of 5% in guideline pay for the public sector, reflecting national pay rates more than the state of the market.

However, that was before a Whitehall pay freeze was imposed on salaries over £21,000.

More significant is that the public sector respondents expected the number of vacancies to drop by nearly 10%, and that too was before the depth of the government's cuts became clear.

That reduction is expected to hit hardest in the areas outside the south-east of England, in which public sector recruitment has been particularly important in this graduate market.

Comments

  • Comment number 1.

    Just finished my final year at the university of hertfordshire and have been applying for many jobs. Some companies dont bother replying, some reply and say that you have the skills and grades for the job, however you dont have the experience.

    My question to employers is: How can graduates gain experience if you dont give them that experience or give them a chance?#

    I begin to wonder what the point in going to university is when graduates from oxford and cambridge with 1st or 2:1 cant get a job.

    If the system wont change, there will be a mass emigration of young skilled, educated, hard working graduates that will go elsewhere in look of a proper job.

  • Comment number 2.

    Meanwhile, recruiting agencies are moaning ad nauseum about not being able to source people in the UK. Someone, somewhere is telling a whole pile of porkies.

  • Comment number 3.

    Douglas, not exactly breaking news is. In fact it was the lazy journalism that caught my eye.

    'The average UK starting salary for a graduate is stuck for the third year at £25,000.

    In London, it's £28,000 and for most of the rest of the UK, including Scotland, it's £23,000.'

    What rubbish. This is clearly the exeption to the rule rather than the norm. Douglas, I challenge you to have search for graduate jobs in Scotland that start around the £23,000 mark. I guarentee you will not conclude this is the average starting salary.

    Interesting that this article is out the same day is the one on London (can't remember the name). This highlights the lack of opportunity and investment in the North (anywhere outside of London).

  • Comment number 4.

    @tartanspecial

    What do you think the average graduate starting salary in Scotland is?

  • Comment number 5.

    I have three sons. Two did engineering degrees and the third is a year away from finishing a finance degree.

    Number one son is a materials specialist in the aerospace sector and works in the USA. He won't be back because there are very limited opportunities for him here.

    Number two son did a degree in mechanical engineering and is now a project manager for a wide variety of projects. He is looking at moving to Australia where there is an increasing demand for his sort of skills.

    Number three son has very sensibly looked at opportunities - or the lack of them - in Scotland and the UK and is already talking about moving as soon as possible to either Canada or Australia. As he is heavily into motor sport I think Australia is the place for him. A country that races V8's on biofuel is a country that has spirit!

    The point is though that for my three lads Scotland holds no attraction because it has insufficient dynamic and exciting companies to make it attractive enough not just to retain graduates but to provide jobss for them in the first place.

    As to why this is the case then look no further than our unsupportive financial services sector and extremely ignorant politicians.

  • Comment number 6.

    @Wee-Scamp

    I spent a couple of years in Brisbane. It and Australia offer a fantastic life to people with good jobs, and the wages for a lot of jobs there are better than you can get in the UK now. Queensland is almost eight times bigger than the UK. It has a smaller population than Scotland and it looks like most of it's about to be dug up for minerals to send to China - hence the demand for engineers.

    Western Australia's even bigger - about 11 times the size of the UK and it's being dug up even more than Queensland!

    Try and get your son to head for Western Australia in preference to Queensland. If you're going out to see him in their summer, dodging our winter ;-), the dryer heat in WA is more pleasant than the stickier heat on the coast of Queensland.

    Seriously, the opportunities in Australia and Canada, because they have commodities the Chinese are buying, dwarf the opportunities in the UK just now. And they're not saddled with crippling public debt. I see Jim Rogers is saying today he still thinks there's nothing worth investing in in the UK. What was that Proclaimers song again about a letter from America?

  • Comment number 7.

    @alexvan

    He went over for last Xmas and the New Year. He has a friend he was at uni with who now lives in Melbourne. He then went down to Sydney for New Year celebrations which he decided put the Edinburgh Hogmanay party to shame :-)

    He is hopefully going out for another visit later this year. Perth this time. I have friends there who work in the oil/gas sector.

    Yes - I read that Jim Rogers article. I agree with him.

  • Comment number 8.

    @ alexvan

    Circa £19k. Agree with all posts. Great if you can find a good job in Scotland, but it isn't the be all and end all.

 

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