Outlook brighter for graduates: Employers forecast a return to 1992 recruitment levels with finance sector the best hope. Barrie Clement reports

EMPLOYMENT prospects for this summer's 160,000 university graduates are 'distinctly brighter', with the demand for their services predicted to increase by nearly 50 per cent in the finance sector alone.

Overall, employers forecast that they will take 16 per cent more university leavers this year and that median starting salaries will be pounds 14,000, compared with pounds 13,500 in 1993.

Salaries for recently recruited graduates are increasing by more than 10 per cent, compared with rises for the rest of the workforce of about 2 per cent.

A report by Incomes Data Services shows that degree holders who had been in employment for three years received salaries a third higher than the starting pay of the 1993 intake.

The latest management pay review published by IDS shows that most starting salaries were in the pounds 12,500-pounds 14,496, with pay generally lower in the finance sector than in manufacturing.

The highest payer in the survey of 100 employers was Baring Brothers, the merchant banker, which offers pounds 18,250 to university leavers. The worst payer was the Applied Environmental Research Centre, which offers pounds 8,500.

Just over one-third of employers paid higher salaries to those graduates with additional qualifications and experience. Trainee actuaries and engineers were paid more than other graduate recruits.

The survey also found an increasing trend towards temporary contracts. Last year, about one-sixth of the organisations surveyed used them.

The reasons for the forecast upturn in the demand for graduates, according to employers, is increased economic confidence and a belief that the worst of the job-cutting exercises are over.

However, the report cautions aginst 'over-optimism', arguing that most employers are simply returning to 1992 levels of recruitment.

Finance companies were planning to take on 47.8 per cent more university leavers this year, while manufacturing employers envisaged taking 17.8 per cent more. The service sector was expected to increase its intake by only 4.1 per cent.

The accountants KPMG Peat Marwick indicated they would take on 211 graduates in 1994 compared to 115 in 1993 and 238 the previous year.

Following reductions last year, two high street banks intended to restore recruitment to the levels of 1992. However, two other banks, the National Westminster and the Royal Bank of Scotland, along with the retailer Asda, intended to take on significantly more graduates this year. Asda recruited only 24 new graduates in 1993, but now plans to employ more than 200.

Despite the recession, some employers had significantly increased recruitment in each of the last two years. Marks & Spencer recruited just 70 degree holders in 1992, but the intake was increased to 220 in 1993, caused by a restructuring. The trend is expected to continue this year with the company planning to employ 300 new graduates.

Management Pay Review (Research File 29); Incomes Data Services, 193 St John St, London EC1V 4LS.

------------------------------------------------------------------------ GRADUATE RECRUITMENT ------------------------------------------------------------------------ Year Median starting September Average number salary pounds pa RPI % of graduates recruited 1989 10,450 7.6 67.3 1990 11,549 10.9 63.5 1991 12,300 4.1 47.9 1992 13,000 3.6 41.7 1993 13,500 1.8 35.8 1994* 14,000 3.5-4.0 41.6 ------------------------------------------------------------------------ *Expected. Source: Incomes Data Services Ltd ------------------------------------------------------------------------