Smart moves: Stand in line for quality graduates

It's worth paying tuition fees just to get a degree under your belt, writes Philip Schofield

A NEW survey should give heart to young people having second thoughts about taking a degree because of the recently imposed tuition fees. The latest survey of members of the Association of Graduate Recruiters (AGR) shows a sustained growth in graduate vacancies, and that more than half of AGR's members cannot fill all their posts. Moreover, graduate starting salaries are rising faster than average earnings. And the salary progression of those graduating in recent years has also outstripped growth in average earnings.

The survey finds that more than half of graduate recruiters expect to increase the numbers they recruit over the next three years. Only three per cent expect their graduate recruitment to fall by the year 2000. The graduate salaries and vacancies survey is carried out by the Institute for Employment Studies (IES) and published by AGR each January. It looks at trends in the graduate job market, records the starting salaries of the preceding year's graduates, and forecasts vacancy levels and starting salaries for the coming year.

The number of vacancies in 1997 reported was 13.1 per cent up on the numbers actually recruited in 1996. This is only slightly lower than the growth in 1996 (14.1 per cent). Most vacancies (77.5 per cent) are in non-industrial organisations.

AGR members expect even greater growth in 1998. Overall, they calculate they will need 18.5 per cent more graduate recruits than in 1997. Moreover, almost one in five predict a "significant increase" in recruitment over the next three years, while another third predict a marginal increase in vacancies. A further third expect to maintain their current recruitment levels.

As vacancies increase, recruitment problems become more widespread. The report notes that 52 per cent of employers were unable to fill all their vacancies this year. This is the highest proportion this decade, and "could indicate a return to the serious recruitment difficulties of the late 1980s". But so far the shortfall for most employees has not been severe. While many reported a shortfall, "the majority of these (62 per cent) were unable to fill a relatively small proportion of their vacancies".

The survey examined the reasons behind the problem. Most complaints were about the quality of applicants. While high-calibre graduates do enter the labour market, "it is becoming increasingly difficult to identify them among the large pool of applicants, and it is even harder to recruit them". There was also what is described as "the familiar complaint" about science and technology graduates lacking interpersonal skills and commercial awareness.

Some commentators have said this is evidence that academic rigour is declining and that universities do not do enough to make graduates employable. But AGR chief executive, Roly Cockman, says that is a bit of a distortion. "In general, employers are not finding it difficult to find people with the academic ability they are looking for. The difficulty is in finding the interpersonal skills." He says developing employability skills in higher education is "very patchy, but some universities have it as a very serious objective". He hopes the Dearing Report and Government White Paper will give a push to those universities which have not yet taken it seriously.

Some vacancies are unfilled because of miscalculation in the selection process. A vacancy typically draws 100 applications and the selection process is time-consuming and costly. Mr Cockman says that if an employer seeks 20 graduates and gets only 17, "there's a great reluctance to go round the circle again". It may not be cost-effective to recruit those last three, so the employer will opt to manage without them.

Hugh Smith, manager of British Telecom's graduate entry programmes and chairman of AGR, says that BT recruited 300 graduates in 1995, 520 in 1996 and 780 in 1997 - and he expects the increase to be maintained.

On the calibre of today's graduates he says that they always manage to fill their vacancies. "I don't think we can say the supply is not there or the skills are inadequate, but you have to look hard to find the calibre you need. The best people to judge are the managers. I don't hear them saying: 'they're not what they used to be'."

In 1997 the typical graduate starting salary, excluding London allowances, was pounds l5,500, an increase of 6.4 per cent on the year before. There are considerable variations - with one in 10 starting on pounds 19,225 or more and another one in 10 earning pounds 14,000 or less. This year's typical starting salary is forecast to be pounds l6,000.

Just over half of employers paid differentials - PhDs and MPhils got an average pounds 2,000 extra, Masters pounds 918, sponsored recruits and those with relevant work experience pounds 750, mature graduates pounds 600, and sandwich degree graduates and first-class degrees pounds 500. However, very few employers offer "golden hellos".

Salary progression for recent recruits has increased relatively fast. Graduates hired in 1996 at pounds 14,774 now receive a median of pounds 17,000. After three years those recruited in 1994 at pounds l3,500 are now on pounds 2l,000.

Summing up the report, Mr Cockman says "the market is moving in favour of graduates" and that young people of ability should not be discouraged from going to university because of fees. "It is an investment which will reap long-term rewards."