As A-level results day brings university choice into focus for thousands of students, new research finds a mixed outlook for the graduate labour market.
Demand for graduates remains high, the study by HR website XpertHR shows. But the starting salaries that graduates can expect to earn have been frozen for almost a decade.
This year’s graduates are heading into a robust recruitment market, with eight out of 10 employers (79%) covered by the research taking on new recruits in 2018/2019. Employers are typically taking on as many or more graduates than in previous years.
A-level students who are weighing up their choice of degree course should bear in mind that the strongest employer demand for graduates recruits is for vacancies in engineering, marketing and sales roles.
However, the research also reveals that employers have not increased their graduate starting salaries for a decade, with data from previous surveys in the annual series showing no change since 2008/2009.
Key findings from the survey of 214 public and private sector employers surveyed show that:
- The median graduate starting salary is frozen at £24,000 – the same level as a decade ago.
- Larger employers tend to offer higher graduate starting salaries, as the table below shows.
- The overall range of salaries on offer is wide, running from £15,750 to £55,000. The salaries pitched at £35,000+ in our sample are to be found at finance employers and law firms.
| Graduate starting salaries 2018/2019 | |||
| Size of organisation | Lower quartile (£pa) | Median (£pa) | Upper quartile (£pa) |
| 1 to 249 employees | 20,000 | 23,000 | 25,500 |
| 250 to 999 employees | 21,000 | 25,000 | 28,000 |
| 1,000+ employees | 23,000 | 25,500 | 27,500 |
| All employers | 21,000 | 24,000 | 27,000 |
| Sample: 163 organisations.
Source: XpertHR. |
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Some graduates may find that their salary stretches a little further in 2018/2019. In April 2018, the Government increased the minimum salary requirement for paying back student loans to £18,330 for graduates who started university before September 2012 and £25,000 for those who started university after September 2012. This means that new graduates earning the median starting salary of £24,000 will find themselves below the new student loan repayment threshold.
Any A-Level students who are disappointed by their grades and worried about missing out on their choice of university course might find reassurance in survey findings that employers are starting to look beyond the traditional graduate recruitment model.
Degree apprenticeships – which allow employees to balance their work with study for a degree-equivalent apprenticeship qualification – are increasingly popular with employers as an alternative to graduate recruitment. More than one-third of employers offer degree apprenticeships or plan to do so. One private sector employer says: “I believe these offer a fantastic opportunity and a cost-effective alternative to the traditional degree route.”
XpertHR managing editor for pay and HR practice Sheila Attwood said:
“There is mixed news for recent graduates from our survey. Employers are generally keen to take on graduates and recognise the value that they have to offer. But the evidence shows that pay has not kept pace with rising prices over recent years, and in common with other employees, they will feel the squeeze. Some students receiving their A-level results this year might instead consider a degree apprenticeship rather than a traditional degree. These are increasingly popular with employers, and offer candidates a chance to earn a wage while they gain work experience and study for a degree-equivalent qualification.”
Rebecca joined the HRreview editorial team in January 2016. After graduating from the University of Sheffield Hallam in 2013 with a BA in English Literature, Rebecca has spent five years working in print and online journalism in Manchester and London. In the past she has been part of the editorial teams at Sleeper and Dezeen and has founded her own arts collective.
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