Graduates face 4% drop in demand

GRADUATE recruitment will have fallen by nearly 20 per cent in two years when the new intake starts work later this year, according to research published today.

The slump in demand for degree-holders seems to be levelling off - 4 per cent lower than last year compared with a 15 per cent drop in 1991 - but job prospects remain bleak, the top pay unit of Incomes Data Services reports. This year, a record 163,00 students will enter the market - nearly 10 per cent more than last year.

Graduates, however, can expect starting salaries 3 per cent above last year's - marginally more than the inflation rate. Those taking up jobs with a major employer in the private sector will receive an average pounds 13,450 compared with pounds 12,600 in the public sector.

The IDS report Pay and Progression for Graduates says that more than 90 per cent of the 100 major employers covered were pleased with the quality of candidates in 1992, although some argued that an increasing college output had not been matched by a rise in quality.

Among the complaints were that new graduates lacked analytical abilities, persuasive skills and the ability to communicate.

With the Department of Education pointing out that only 38 per cent of last year's graduates found permanent employment, IDS reports that graduates are clinging on to jobs once employed.

The top pay unit found a wide variation in recruitment. While the Ford Motor Company has virtually suspended its intake after employing 128 last year, Nestle, Royal Insurance and British Sugar plan to increase job opportunities.

In 1992, basic starting salaries for first degree graduates ranged from pounds 8,500 at Applied Environmental Research Centre, to pounds 17,850 at Andersen Consulting. However, the vast majority were grouped around the median of pounds 13,000. About 90 per cent of employers paid starting salaries between pounds 11,000 and pounds 15,000.

It was found that even in the present recession, some companies were encountering recruitment problems, especially in engineering and production.

The highest additional payments for postgraduate qualifications were made by chemical and pharmaceutical companies engaged in scientific research. The highest salary for PhD graduates was pounds 21,000 at the pharmaceutical group Roche Products.

Some firms pay a substantial premium for a doctorate. Albright & Wilson paid pounds 13,500 for a graduate and pounds 16,500 for a PhD.

Pay and Progress for Graduates, IDS, 193 St John Street, London EC1V 4LS.

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