Question: What do 400 professionals working in graduate recruitment talk about when they get together? Well, not surprisingly, they talk about graduates.

Last week at the Association of Graduate Recruiters (AGR) annual conference at the Celtic Manor Resort in Wales, the first debate was about the value that graduates bring to the organisations that employ them. The results of an in-depth research project suggested that graduates contribute a staggering £1 billion of added value to the UK economy annually - which is really quite impressive when you stop to think about it.

The research, conducted in 22 different organisations, shows that graduates bring added value through:

Creative destruction: a capacity to articulate innovations and the ability to cope with the changes this brings about.

Speed to value: they develop faster than other employees and add value to an organisation more quickly. They hit the ground running and demonstrate leadership qualities at a faster rate.

Corner fighting: not just having good ideas but the skills to articulate ideas into the cut and thrust of working life.

Stimulating change: initiating change - not just accommodating it.

Re-inventing the wheel: not looking at things and thinking, "That's too difficult", but coming up with solutions and being innovative because they want to make their mark.

There's a general consensus among employers that graduates contribute in the region of three times their own salaries. Based on the number of places that AGR members offer in a year and the salaries they pay, that adds up to massive £1bn.

Delegates also took the opportunity to take a hard look at their professional practices. In particular, they concentrated on the rapid advances that have been made in online technology. More than half of AGR members now only accept applications for graduate level jobs online and a third are testing candidates online.

The debate focused on whether the selection process has gone too far down the technology road. There were probably as many views expressed as there were interested parties. However, there was general agreement that online recruiting is only as good as the system in place and it is essential that employers only use systems that are user-friendly. The interaction with candidates, be it face to face or at a distance, is still crucial and employers must ensure that candidates are treated well. As one delegate put it, "Today's rejected candidate could be tomorrow's potential customer."

There's further positive news for graduates looking for a job this year. The AGR Summer Graduate Review shows that graduate level vacancies in 2004 are up by an encouraging 15.5 per cent. Some of the biggest gains were in information technology and investment banking - sectors that have been through lean times and where some catch-up taking place.

Salaries are also on the up, although only by 3.4 per cent. Nevertheless, successful candidates for graduate-level jobs with AGR members can expect to earn £21,000, on average.

The South-east of England is the most buoyant area for vacancies and the highest-percentage salary rise can be found in the Midlands (8 per cent) so, presumably, we can expect more Audi TTs on the streets of Birmingham in the coming months. The top-paying sectors continue to be investment banking, consulting and law. The public sector is holding up surprisingly well and there has been a slight narrowing of the gap between the top and the bottom payers as the most generous chose not to increase their starting salaries at all in 2004.

Another encouraging finding was a quarter of the respondents reporting that the quality of candidates has risen in 2004. Despite this, there are still some sectors struggling to fill all their vacancies, usually through a lack of suitable skills, in particular technical or business skills.

Prospects of getting a graduate career may have improved, but the competition remains tough. On average, there are 37 applicants for each vacancy, six of whom are invited for a first round interview, three of whom are then invited to a final assessment centre. Of course, many candidates will have applied to several businesses, so the ratio is not as severe as it at first seems.

Prospects for graduates in 2005 are also promising. Only one in 10 businesses foresee a reduction in vacancy level while 27 per cent expect to be recruiting more graduates than in 2004. And a final word of advice for job seeking graduates and finalists - your degree is important, and often is the key to open the career door, but don't forget that employers look for other qualities as well. These include "soft" skills such as being a good communicator or team worker, work experience, and good old fashioned commitment and motivation.

Carl Gilleard is Chief Executive of the Association of Graduate Recruiters