AGR 2010 Winter Survey Report

The AGR Graduate Recruitment Survey 2010
Winter Review
Produced for AGR by
The AGR Graduate Recruitment Survey 2010

Winter Review
Graduate Recruitment Survey 2010 Winter Review
Association of Graduate Recruiters The Innovation Centre Warwick Technology Park Gallows Hill Warwick CV34 6UW
Survey produced for AGR by
CFE Phoenix Yard Upper Brown Street Leicester LE1 5TE
For more information please contact Hayley Lamb on 0116 229 3300 or hayley.lamb@cfe.org.uk Website: www.cfe.org.uk
All information contained in this report is believed to be correct and unbiased, but the publisher does not accept responsibility for any loss arising from decisions made upon this information.
CFE and the Association of Graduate Recruiters
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without prior permission of the publisher.
Contents
Foreword ................................................................................................................................... 2 Executive Summary ................................................................................................................... 3 Introduction .............................................................................................................................. 6
Methodology .................................................................................................................................................................. 6 Participation ................................................................................................................................................................... 7
Graduate vacancies and salaries .............................................................................................. 12

Graduate vacancies in 2009 and 2010 .......................................................................................................................... 12 Changes in vacancies by business sector ...................................................................................................................... 14 Vacancies in 2009 by business sector ........................................................................................................................... 18 Vacancies in 2009 by region ......................................................................................................................................... 19 Vacancies in 2009 by career area ................................................................................................................................. 19 Achievement of 2009 recruitment targets ................................................................................................................... 21 Diversity of graduate recruits in 2009 .......................................................................................................................... 22 Challenges in filling anticipated 2010 vacancies ........................................................................................................... 25 Graduate salaries in 2009 and 2010 ............................................................................................................................. 27 Graduate salaries in 2009 by business sector ............................................................................................................... 29 Graduate salaries in 2009 by region ............................................................................................................................. 29 Graduate salaries in 2009 by career area ..................................................................................................................... 31 Expected salary changes in 2010 by business sector .................................................................................................... 32 Lump sum payments to graduates in 2010 .................................................................................................................. 33 Education premiums and other remuneration for graduates in 2010 ......................................................................... 34
Graduate recruitment marketing ............................................................................................. 37

Total marketing spend in 2009 and 2010 ..................................................................................................................... 37 Graduate recruitment marketing activities in 2009 ..................................................................................................... 38 Spend on key activities in 2009 and 2010 .................................................................................................................... 39 Marketing spend per vacancy ....................................................................................................................................... 39 Targeting universities in 2009 and 2010 ....................................................................................................................... 40
Hot topics in graduate recruitment .......................................................................................... 44

School-leaver entry programmes ................................................................................................................................. 44 Recruiting for UK vacancies overseas ........................................................................................................................... 45 Advice to graduates in difficult times ........................................................................................................................... 46
Foreword
I begin by welcoming our new research partner, CFE, who have stepped up to the plate admirably and produced a very readable and fascinating report. I must also pay tribute to the previous research team at Trendence for the professional way in which they dealt with the handover. While I am expressing my gratitude, I want to issue a big thank you to all the organisations who took the trouble to complete the survey questionnaire. Without your efforts the Review would be a meaningless exercise. The more members who contribute, the more meaningful the findings become. These are busy times for graduate recruiters and we do appreciate your support in ensuring that the AGR Graduate Recruitment Survey continues to be the largest and most respected survey of its kind. It is our intention to build up the participation rate and if your organisation did not manage to complete the survey this time, prepare yourselves for the next survey, which is to be revised following a consultation exercise with AGR members, before it goes live in May 2010. Much has happened to the UK economy in the past 12 months and this has clearly had an impact on the graduate recruitment market but in what ways and to what extent? The Summer 2009 Graduate Recruitment Survey predicted significant cutbacks in recruitment activity. Were these predictions met? For the first time since we have undertaken the survey, graduate salaries were predicted to stagnate rather than rise. Was this actually the case? And what has been the impact of the recession on marketing activities and spend? To find out the answers to these and other intriguing trends in the sector, read on! Carl Gilleard Chief Executive AGR
Executive Summary
Graduate recruits, vacancies and salaries
The 8.9% decrease in graduate vacancies experienced during the 2008/09 recruitment season is far less dramatic than the 24.9% fall that was predicted in the Summer 2009 Review. While AGR employers anticipate a further 1.6% decrease in graduate vacancies during 2010, this does suggest that the fall in vacancies may have started to level out. The 2009 graduate vacancy market was dominated by accountancy/professional services, oil companies and investment bank/fund managers who together offered nearly half of 2009s graduate vacancies. Oil companies are expecting to significantly increase the number of graduates they recruit in 2010, while employers in the public sector are among those predicting a decrease in vacancies. More than half of graduates continue to be recruited in London and the South East although notable increases were reported in Scotland, the North West and Europe during 2009. The AGR employers predicting an increase in vacancies during 2010 attributed this to either an anticipated or actual growth in business. In most cases, employers predicting a decrease in vacancies reported that this was either a direct or indirect consequence of the economic climate. The vast majority of AGR employers did not face difficulties filling their 2009 graduate vacancies and over nine-tenths felt they met their 2009 recruitment objectives. However, AGR employers expecting to recruit graduates during 2010 predict they are likely to experience high dropout rates as candidates apply to a large number of organisations simultaneously. In 2009, almost half (48.1%) of graduate starting salaries ranged from 22,001 to 26,000, with only one in ten (11.9%) exceeding 36,001. For the second successive year, it is predicted that there will be no change to the average starting salary offered by AGR employers. Mirroring the Winter 2009 Review, the median starting salary for graduates recruited in 2010 is anticipated to be 25,000. Investment bank/fund managers and law firms again topped the salary charts in 2009. While most sectors predict there will be no change to graduate starting salaries during 2010, construction or consultancy and transport or logistics both anticipate increasing salaries by more than 6%. No sectors are expected to experience a dramatic decrease in salaries during the year. The proportion of organisations offering lump sum payments to attract graduates is expected to fall by 6.3 percentage points to 26.6% in 2010. There has been an 11.7 percentage point increase in the number of employers intending to offer a financial premium for qualifications above an undergraduate degree. Pension schemes and training for professional qualifications remain the most common non monetary benefits offered by AGR employers to graduates.
Graduate recruitment marketing

AGR employers median spend on graduate recruitment marketing activities in 2009 was 20,000. Although significantly less than the 80,000 predicted in the Winter 2009 Review, the median marketing spend is not expected to drop further in 2010. AGR members plan to use a mixture of marketing techniques for their 2010 recruitment campaign. More than nine-tenths will use brochures and/or the company website followed by on campus activities and advertising. Just under three-quarters plan to use online promotion techniques. Compared to 2009, AGR employers plan to allocate bigger median budgets on their recruitment websites and smaller median budgets on recruitment brochures for their 2010 campaign. Median budgets for online promotions, advertising and on-campus activities are expected to remain unchanged during 2010.
Hot topics in graduate recruitment

The proportion of AGR employers offering a school-leaver entry programme for 16 to 18 year olds has declined by 3.4 percentage points since 2008 and now stands at 26.3%. 2009 saw a further fall in the number of AGR employers looking overseas to fill their UK graduate vacancies. Despite this, many AGR employers still look abroad to ensure they recruit the most talented graduates available and to reap the benefits of an international workforce. As the UK emerges from the longest recession since records began, many graduates are still struggling to find a job. In these difficult times, the advice from AGR employers to graduates is to attend interviews well prepared. Conducting research into prospective employers and their sector is crucial, as is gaining interview practice. To graduates considering postponing their job search to improve their employability, AGR employers stress the importance of accepting temporary employment, undertaking skills training or accepting unpaid work. In the current climate, graduates must do everything they can to get ahead of the competition.
Introduction
Introduction
Welcome to the AGR Graduate Recruitment Survey 2010 Winter Review. The AGR Graduate Recruitment Survey is the definitive study of AGR employer members and their recruitment practices, providing up to the minute insights into conditions and trends in the graduate recruitment market alongside benchmarking of key market indicators such as vacancy and salary levels. As the leading survey of graduate recruitment practices, spanning the longest continuous series of recruitment seasons, the Survey is the primary source of information on graduate recruitment levels, methods and practices amongst AGR members an invaluable tool for assessing and optimising graduate recruitment activities. The Graduate Recruitment Survey is conducted twice a year. Undertaken on behalf of AGR by CFE, the Winter Review provides an assessment of the latest graduate vacancy levels and salary information while also examining AGR employers predictions for the near future. It describes the ways in which employers marketed their graduate opportunities during the 2009 recruitment season and provides insight into their recruitment marketing plans for 2010. The content of the Winter Review is largely unchanged from previous years, although work will shortly be undertaken to develop the content of both the Summer and Winter surveys to ensure they continue to meet the needs of AGR members. CFE will be consulting with a sub-group of AGR members as part of this process. It is envisaged that the format of the Winter and Summer Review reports will change following this consultation; in the meantime, we have included some additional commentary in the Policy Insight and Comparative Data boxes to position the findings in a wider context. The Summer Review, to be published in July 2010, will further investigate recruitment practices and graduate recruitment management.
Methodology
An online survey was developed and hosted on the CFE website. AGR employer members were invited to participate in the survey by an email which included the link to the survey and a personalised password. The survey contained a combination of different types of questions; some of these were mandatory in order to ensure a high in-variable response rate for key questions. Respondents were automatically routed through the survey on the basis of their response to previous questions. The survey was open for a period of four weeks between November and December 2009. The results were analysed using statistical software and are presented using tables and a variety of charts and graphs. In addition to frequencies and averages for the overall sample, data is also reported by business sector, region and career area where the size of the base is sufficiently large to permit robust analysis. The number of organisations that responded to each question is presented for each table and chart as the base; that is, the
total number of valid responses on which the figures or percentages are calculated. This changes for each question to reflect the routing not all respondents were asked the same questions.
Participation
361 AGR employers were invited to participate in the survey; responses were received from 214 of these which represents a 59% response rate. Collectively, responding organisations recruited 19,247 graduates in 2009. Submissions were received from a cross-section of AGR members in terms of business sector, size of organisation and the career area and region graduates are recruited to. The findings of the Graduate Recruitment Survey 2010 Winter Review can, therefore, be regarded as representative of AGR employer membership.
The following AGR members took part in the survey A

Accenture Accenture (Technology Solutions) Addleshaw Goddard AECOM Ltd AIESEC (UK) Ltd Airbus AkzoNobel ALDAR Properties PJSC Allen & Overy LLP American Express Amey Aon Ltd Arcadia Group Plc Argos Army Recruiting Group Headquarters Arriva Plc ASDA Stores Ashurst LLP Atkins Atos Origin Audit Commission AXA Group AXA Investment Managers Brodies LLP BT BUPA
C
Cabinet Office Cadbury Plc Cancer Research UK CapGemini UK Plc Capital One Carillion Construction Limited Centrica CFE CHP Consulting Citigroup Clifford Chance LLP CMS Cameron McKenna LLP COA Solutions Ltd Corus Group Plc Credit Suisse Cummins Ltd
D
Danone Davis Langdon LLP Deloitte Department for Work and Pensions Detica DHL International Ltd Diageo Plc Dixon Wilson DLA Piper UK LLP Doosan Babcock Energy Ltd DSG International Plc DTZ Dunnhumby Ltd
B
BAE Systems Baillie Gifford Baker & McKenzie Bakkavor Ltd Balfour Beatty BAM Construction Ltd Bank of America Corporation and Merrill Lynch & Co. Bank of England Barclays Bank Plc Barclays Capital Barclays Wealth Barratt Developments Plc BDO LLP Bechtel Limited Bircham Dyson Bell Bloomberg Bond Pearce LLP Boots Plc Bovis Lend Lease Limited BP International Ltd Brathay Hall Trust
E
E.ON UK EC Harris Edmund Nuttall Ltd Enterprise Enterprise Rent-A-Car Ernst & Young European Personnel Selection Office
Eversheds LLP
Kirkland + Ellis International LLP KPMG LLP
F
FactSet Europe Ltd Fidelity Investments Filtrona Plc Financial Services Authority Freshfields Bruckhaus Deringer Fujitsu Services
L
Linklaters LLP Lloyds of London Lloyd's Register Lockheed Martin Logica L'Oreal Lovells LLP London School of Economics and Political Science
G
Gardiner & Theobald LLP GCHQ Government Communications Headquarters GlaxoSmithKline Government Economic Service Graduate Recruitment Bureau Grant Thornton UK LLP
M
Macfarlanes LLP Majestic Wine Warehouses Ltd Marks & Spencer Plc Mayer Brown International LLP MBDA UK McDonalds Restaurants Ltd McKinsey & Company Mercer HR Consulting Microsoft Corporation Mills & Reeve LLP Millward Brown Moore Stephens LLP Morgan Stanley & Co International Plc Motability Operations Mott MacDonald Ltd Mouchel Mountbatten Institute
H
Hammonds LLP HAT Group of Accountants Hewitt Associates Hiscox HM Prison Service HM Revenue & Customs HSBC Hymans Robertson
I
IBM UK Ltd IMI Plc Imperial College London Infosys Technologies Ltd
N
Nabarro LLP National Express UK Limited National Grid National Nuclear Laboratory Nationwide Building Society Nestle UK Ltd Network Rail NG Bailey NHS Institute for Innovation and Improvement Nomura International Northern Foods Plc
J
J Sainsbury Plc J.P.Morgan Jaguar and Land Rover John Lewis Partnership Johnson Matthey Plc Jones Day
K
Kerry Foods Ltd
O
Olswang LLP Osborne Clarke Ove Arup International Ltd
SunGard Swiss Reinsurance Company
T
TAC Europe Tate & Lyle Taylor Wessing LLP Technip UK Ltd Tesco Stores Ltd Thales Group Ltd The Co-operative Group The National Audit Office TLT Solicitors LLP Towers Perrin Transport for London Trayport Ltd
P
Pilkington Group Ltd Pinsent Masons LLP PriceWaterhouseCoopers Procter & Gamble UK
Q
QinetiQ
R
Raleigh International RBC Capital Markets Reed Smith Richard Butler LLP Research in Motion UK Ltd Reynolds Porter Chamberlain LLP RM Rolls-Royce Plc Royal & SunAlliance Insurance Group Plc Royal Bank of Scotland Group Royal Mail RWE npower
U
UBS UK Intellectual Property Office Unilever UK United Biscuits United Utilities University for Lloyds TSB
V
VT Group Services Ltd
S
Santander UK Plc Scott Wilson Holdings Ltd Scottish Water ScottishPower Sellafield Ltd Shell International Ltd Siemens Plc Simmons & Simmons Skanska UK Sky Standard Bank Standard Life Plc Stephenson Harwood
W
W M Morrisons Waitrose Ltd Watson, Farley & Williams LLP Westinghouse Rail System Ltd Whitbread Plc Wolseley Plc WRC Plc
Z
Zurich Employment Services Ltd
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Chapter 1 Graduate vacancies and salaries
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Graduate vacancies and salaries

This chapter provides a comparative analysis of the actual vacancy and salary levels experienced by AGR employers in 2009 and predicted levels for the 2010 recruitment season. Please note: the predicted changes in vacancy and salary levels between 2009 and 2010 are based on the responses of employers who provided data in the Winter Survey for both 2009 and 2010. Those organisations that provided data for only 2009 or 2010 were discounted to ensure consistency with the method used in previous surveys, although their responses are included in all other analyses.
Graduate vacancies in 2009 and 2010

The decrease in vacancies observed in 2009 (8.9%) appears set to continue with a 1.6% drop expected for the 2010 recruitment season based on AGR employer predictions. The last decrease in vacancies observed in 2002 which stood at 6.5% - was similarly followed by a further small drop of 3.4% in 2003 so this is consistent with previous trends. However, the decrease expected for 2010 is relatively slight and suggests that the fall in vacancies may have started to level out. Moreover, with the final year-end figure for 2009 captured in this survey indicating an actual 8.9% decrease in vacancies, the decline in vacancies turned out to be less dramatic than feared in the Summer 2009 Review when a 24.9% fall was anticipated (Figure 1.1).
2000
14.7%
14.6%
2001 2002
2003
-6.5% -3.4% 15.5% 5.1% 5.2% 12.7% 0.6%

-8.9%
2004 2005 2006 2007 2008 2009 2010 (predicted)

-15% -10% -5%
-1.6%
0% 5% 10% 15% 20%
Figure 1.1: Graduate vacancy changes at AGR employers 2000 - 2010 (predicted) Percentage increase or decrease on previous year (varying bases)
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Comparative Data: Percentage change in vacancies

The Office for National Statistics Vacancy Survey provides estimates of the number of vacancies for which employers are actively seeking recruits from outside their organisation across the UK. This indicates that the decrease observed in 2009 amongst AGR employers was significantly less than that experienced across all occupations. Based on a three month rolling average for the period June to August 2009, a 29.0% decrease was observed when compared to the same period in 2008 for all job vacancies. Comparing the findings of the Office for National Statistics Vacancy Survey and the AGR Winter 2010 Review, we therefore see that graduate recruitment amongst AGR employers has not been as adversely affected by the recession and provides further cause for optimism in 2010.
Further evidence of the more positive outlook for 2010 is apparent in Figure 1.2. Overall, 51.5% of responding organisations predict to have more vacancies in 2010 than 2009; the comparable figure for the Winter 2009 Review, which compared the 2008 and 2009 recruitment seasons, was significantly less at 34.5%. This suggests that the significant slowdown in graduate recruitment experienced last year was primarily as a result of the recession and does not look set to continue. Although the increase is small, with one-quarter (25.8%) of AGR employers indicating that they will be offering between one to ten more vacancies in 2010, it represents good news for the graduates set to leave university in 2010 together with those who graduated in 2009 but have yet to find their first job. The percentage of organisations reporting a decrease in the number of vacancies has similarly dropped from 46.0% in the Winter 2009 Review to 31.0%. The majority of this decrease can be seen amongst the category one to ten fewer graduates (16.8%).
> 50 more
26-50 more
8.9% 2.6%
14.2%
11-25 more 1-10 more Same as 2009

1-10 f ewer
25.8% 17.4% 16.8%

8.4%
11-25 f ewer 26-50 f ewer 51-200 f ewer

0%
1.6% 4.2%
5% 10% 15% 20% 25% 30%
Figure 1.2: Changes in vacancy levels 2009 to 2010 (predicted) Base = 195
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Analysis of the number of vacancies offered by AGR employers in 2009 and predicted levels for 2010 (Figure 1.3) encouragingly indicates a small decrease in the number of organisations reporting no new vacancies (3.6% compared to 5.1%). Although still above the equivalent figure of 2.9% for 2008, as reported in the Winter 2009 Review, some initial signs of levelling out of graduate vacancies are apparent in 2010. Increases can also be seen in the percentage of AGR employers predicting between 26-50, 101250 and 251-500 vacancies (Figure 1.3).
More than 500
4.1%
4.6%
251-500
5.1% 3.6%
14.9%
101-250 4.6% 5.6% 8.2%
12.2%
76-100
2010 (predicted)
2009
51-75
11.2%
22.6% 19.9%
26-50
1-25
3.6%
34.9% 37.2%
No new vacancies
5.1% 2.1%
0.0%
Don't Know
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Figure 1.3: Number of graduate vacancies offered by AGR employers in 2009 and 2010 (predicted) Base = 195
Changes in vacancies by business sector

Figure 1.4 provides the expected percentage change in vacancies from 2009 to 2010 by sector. In stark contrast to the Winter 2009 Review, the majority of the bars are to the right of the vertical axis illustrating an anticipated increase in the number of vacancies. Those sectors reporting an increase in 2010 include the traditionally largest graduate recruiters: banking or financial services (24.5%), investment banks and fund managers (16.2%) and accountancy or professional service firm (0.4%), although in the case of the latter this is only marginal. This contributes to a more optimistic picture for graduate recruitment given the percentage of total vacancies typically offered by these operating sectors. However, the largest predicted increase between 2009 and 2010 is for oil companies (49.7%) and consulting or business service firms (47.2%) where there are almost half as many more vacancies in 2010 as in the previous year. However, a small number of sectors are predicting significant decreases in the number of vacancies offered in 2010, most notably third sector (49.2%) and transport or logistics (13.5%) organisations.
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Please note: oil and utility companies and third sector organisations have not featured previously as standalone operating sectors. In earlier Graduate Recruitment Surveys, they were included in the all other sector category as there were too few organisations to provide robust sector levels. However, due to the large number of vacancies offered by all other sectors if grouped in this way, which stands at almost onequarter (23.1%) of all vacancies in 2009 according to the final year-end figures, the above sectors in this Winter Review are presented in their own right. This is designed to provide more useful intelligence to AGR members about the sectors accounting for the largest number of vacancies in 2009. It should be noted that the number of organisations that responded to the survey from these sectors is small and the results should, therefore, be used with some caution. This is applicable to all the sector breakdowns provided in the Winter 2010 Review, including salary levels. The other category includes only those sectors not clearly belonging to a sector listed in the questionnaire and chemical or pharmaceutical companies.
Oil company Consulting or business services firm Construction company or consultancy Retail Banking or financial services Motor manufacturer IT hardware or software company Investment bank or fund managers FMCG company Engineering or industrial company Law firm Energy, water or utility company Accountancy or professional services firm Public sector Insurance company Transport or logistics company Third sector -49.2% Other -60% -40% -17.9% -20% 0% 20% 40% -7.5% -8.9% -13.5% 32.0% 30.9% 24.5% 22.8% 20.5% 16.2% 11.8% 10.3% 7.4% 5.3% 0.4%
49.7% 47.2%
60%
Figure 1.4: Expected percentage change in vacancies from 2009 to 2010 by sector Base = 195
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Comparative Data: Percentage change in vacancies by sector

The Office for National Statistics Vacancy Survey offers intelligence on the percentage change in vacancies by sector. However, as the business sectors used in the Graduate Recruitment Survey are reflective of AGRs membership rather than standard classifications, comparisons with the national picture are less robust. CFE will be undertaking some work to align AGR sectors with the Standard Industrial Classification (SIC) 2003, which is used in all major government surveys to categorise establishments by the type of economic activity in which they are engaged. The AGR sectors will also remain to ensure data is of value to members.
Policy Insight: Government support for key sectors

The Government is now taking a more active role in promoting the development of key sectors that it believes hold the key to economic growth and future prosperity. This increased activism was first signalled last year in the paper Building Britains Future New Industry, New Jobs and has meant that funding (including that provided to universities to place graduate interns with employers) is already being prioritised to support key sectors such as advanced manufacturing, life sciences and digital and creative industries. Related to this, plans were outlined in the Governments recent higher education framework, Higher Ambitions, to help deliver the higher level skills needed for these sectors to develop. This included enhanced support for STEM subjects degrees in the sciences, technology, engineering and mathematics. The 10,000 additional student places announced by the Government in 2009 were restricted to STEM subjects.
With a much more positive picture apparent for the 2010 recruitment season, what are the reasons behind this? AGR employers were asked how important several factors are in their predictions to recruit more or less graduates on a scale of one to six, where one is not important at all and six is very important. The mean score is provided in order to compare the importance ascribed to these factors. Figure 1.5 indicates that, amongst those employers who expect an increase in vacancies between 2009 and 2010, anticipated (4.32) and actual (4.25) growth in business were rated more highly than any other factor cited. This is in contrast to the Winter 2009 Review which indicated that the increase was primarily as a consequence of an increased strategic focus on graduates within organisations; anticipated growth in business in particular was of much less significance. With a mean score of 3.93, increased focus on graduates continues to be of importance in 2010 although it no longer remains the primary driver. Higher recent turnover of staff (2.55) and an increase in the number of applicants (2.48) were deemed by AGR employers as significantly less important in accounting for the increase in vacancies.
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Anticipated growth in business (b=80)
4.32
Actual growth in business (b=79)
4.25
More focus on graduate recruitment (b=81)
3.93
Higher recent turnover of staff (b=80)
2.55
Increase in the number of applicants (b=82)
2.48
Figure 1.5: Relative importance of various reasons for expected increase in vacancies from 2009 to 2010 Mean ratings on a scale from 1 (not important at all) to 6 (very important)
Figure 1.6 indicates that the impact of the economic climate is once again significant in explaining the decrease in graduate vacancies. Indeed, with a mean score of 4.51, direct result of the economic climate is deemed more important than any other factor cited. At 3.47, indirect result of the economic climate is also rated relatively highly and is consistent with the findings of the Winter 2009 Review. More positively for the increasing number of young people entering higher education, lower strategic focus on graduate recruitment was deemed of relatively low importance (2.39) and, therefore, reaffirms organisations commitment to the employment of graduates.
Direct result of the current economic climate (b=35) 4.51
Indirect result of the current economic climate (b=32)
3.47
Improved retention rates (b=30)
2.77
Lower focus of graduate recruitment (b=31)
2.39
Figure 1.6: Relative importance of various reasons for expected decrease in vacancies from 2009 to 2010 Mean ratings on a scale from 1 (not important at all) to 6 (very important).
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Vacancies in 2009 by business sector

In terms of the percentage of total vacancies, the graduate vacancy market in 2009 was dominated by accountancy and professional services (18.2%), oil companies (15.1%) and investment bank or fund managers (14.9%). Whilst the ascendency of accountancy and professional services was evident in the Summer Review where it topped the table at 24.4% - banking or financial services have dropped to fifth place in the table and law firms to sixth. In the case of banking and financial services, this represents a decrease of 5.7 percentage points and is indicative of the global credit crunch and banking crisis (Table 1.7). The increase in vacancies recorded by oil companies is unprecedented; in the Summer 2009 Review they were included in the other category and now feature as the second highest recruiter of graduates amongst AGR members at 15.1%. The gains made by investment banks and fund managers are similarly significant. In the Summer Review, investment banks stood seventh in the table at 5.5%.
Table 1.7: Vacancies at AGR employers by sector 2009 % of total vacancies
Accountancy or professional services firm Oil company Investment bank or fund managers Public sector Banking or financial services Law firm Retail Engineering or industrial company Consulting or business services firm IT / Telecommunications companies Construction company or consultancy Third sector Transport or logistics company FMCG company Energy, water or utility company Motor manufacturer Insurance company Other 18.2% 15.1% 14.9% 10.0% 7.9% 6.5% 5.6% 5.2% 3.3% 2.7% 2.3% 2.0% 1.7% 1.5% 1.0% 0.3% 0.3% 1.6%
Based on the responses of 195 participants (Base count of vacancies = 19,247)
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Vacancies in 2009 by region

At 42.8%, over two-fifths of 2009s total vacancies were in London. This represents a decrease when compared to the Summer Review where it stood at 49.0% and a narrowing of the gap between London and the South East (11.0%) by 6.5 percentage points. However, collectively London and South East account for over half (53.8%) of all vacancies in 2009 and thus reiterates the dominance of the South. Notable increases can be seen in the North West, Scotland and Europe, whilst decreases are evident in relation to the South West, Wales, East Anglia, the North East and Yorkshire (Table 1.8).
Table 1.8: Vacancies at AGR employers by region in 2009
% of total vacancies London South East The Midlands North West Scotland South West Wales Northern Ireland East Anglia North East Yorkshire Offshore British Islands Europe Rest of the world Ireland Asia USA 42.8% 11.0% 9.3% 8.3% 6.5% 6.2% 2.5% 1.4% 1.3% 1.2% 1.1% 0.3% 6.4% 0.6% 0.4% 0.3% 0.2%
Based on the responses of 195 participants (Base count of vacancies = 13,867*) *Due to the fact that some respondents did not know the exact number of graduates they recruited within each region.
Vacancies in 2009 by career area

Whilst there were once again more vacancies in accountancy than any other career area (14.8%), there has been a marked decrease when compared to the Summer Review where it stood at 24.7%. At 14.0%, general management has maintained its ground whilst legal work has dropped to third in the table (8.5%). This is indicative of the resurgence of general management due to the popularity of rotational schemes. Indeed, analysis of past AGR Graduate Recruitment Surveys indicates that general management has been
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falling in popularity over the past decade. Encouragingly, the percentage of vacancies in investment banking is higher than reported in the Summer Review 9.6% compared to 7.8% - possibly signalling some recovery following the turbulence in the banking and financial services sector (Table 1.9).
Table 1.9: Vacancies at AGR employers by career area in 2009
% of total vacancies Accountancy General management Investment banking Legal work IT Consulting Financial management Retail management Civil engineering Electrical / electronic engineering Mechanical engineering Human resources Sales Marketing Research and development Manufacturing engineering Logistics Purchasing Science Actuarial work Other 14.8% 14.0% 9.6% 8.5% 7.6% 6.7% 4.8% 3.6% 3.0% 2.9% 2.6% 2.5% 2.5% 2.2% 1.8% 1.6% 1.6% 1.2% 1.2% 1.1% 6.2%
Based on the responses of 195 participants (Base count of vacancies = 13,448*) *Due to the fact that some respondents did not know the exact number of graduates they recruited within each career area.
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Achievement of 2009 recruitment targets

The vast majority (80.5%) of AGR employers filled their graduate vacancies in 2009. Although marginally lower than the predicted rate reported in the last Summer Review where nine-tenths indicated that they anticipate to fill their vacancies this nevertheless confirms that the economic downturn has almost eliminated recruitment shortfall (Figure 1.10). Engineering or industrial companies have the strongest representation in the small group of participants who experienced a recruitment shortfall (17.6%). They are followed by accountancy or professional services, law and banking or financial services companies, which are equally represented. Moreover, analysis of recruitment shortfall by size of organisation indicates no discernible differences with both larger (defined as 2,500 employees or more) and smaller (up to 2,499 employees) organisations filling the majority of their vacancies.
No 18.4%
Don't know 1.1%
Yes 80.5%
Figure 1.10: Proportion of AGR employers with a recruitment shortfall in 2009 - Base = 185.
Analysis of the extent of shortfall in 2009 (Figure 1.11) indicates that for the majority (55.9%) it was relatively small at between one and five per cent of vacancies. Encouragingly, only a small minority of AGR employers stated that they experienced a shortfall of between 26 to 50 per cent of vacancies at 2.9%; however, over a quarter (26.5%) had experienced a shortfall of between 11 and 25 per cent.
60% 50% 40% 30% 20% 10% 0% 1 to 5 % of vacancies 6 to 10 % of vacancies 11 to 25 % of vacancies 26 to 50 % of vacancies 14.7% 2.9% 26.5% 55.9%
Figure 1.11: Extent of shortfall of graduate recruits in 2009 - Base = 34
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All respondents were also asked about the extent to which their organisation met its graduate recruitment objectives in 2009. Interestingly, over nine-tenths (94.6%) answered yes in response to this thus, indicating that respondents perceived their organisations to have achieved their aims despite a shortfall in the number of graduates recruited. Indeed, nearly four-fifths (79.4%) of those who indicated that they had a shortfall stated that they had achieved their objectives for 2009. This suggests that target numbers of vacancies are just that targets rather than bottom line must have recruits.
Diversity of graduate recruits in 2009

The majority of respondents monitor recruitment by both gender (74.6%) and ethnicity (54.5%) which is consistent with the findings of the Winter 2009 Review. This amounts to an increase of 5.2 percentage points in the proportion of AGR employers monitoring recruitment by gender. Disability is monitored by 45.1% of respondents and age by just over one-third (29.1%). Within the past year, the percentage of respondents monitoring recruitment by age has dropped by 6.6 percentage points to 29.1%. This is of particular interest as arguably a small increase may be expected following the introduction of the Employment Equality (Age) Regulations in 2006, which made it illegal to discriminate against employees, jobseekers or trainees on the grounds of age. Indeed, whilst previous Graduate Recruitment Surveys have indicated that age is receiving increasing awareness from AGR employers, this increase has not been sustained in 2009.
Gender
Just under three-quarters (72%) of respondents who monitor recruitment by gender stated that they know the number of male and female graduates recruited. For these respondents, the total number of males recruited in 2009 was 5,185 in comparison to 2,867 females. On average, each responding organisation recruited 45 males and 25 females. Table 1.12 provides data on the gender split across sectors. This indicates that males formed the majority of all graduates recruited to AGR employers in 2009 in all sectors with the exception of law firms. No difference was observed in the case of FMCG, where a 50/50 split was apparent. Males were significantly over-represented in a small number of operating sectors, including investment bank or fund managers, engineering or industrial companies, construction companies or consultancy, and transport or logistics, where they comprised over three-quarters of graduate recruits. This is consistent with the findings of previous AGR Graduate Recruitment Surveys.
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Table 1.12: Gender split across sectors Male

Transport or logistics company Investment bank or fund managers Engineering or industrial company Construction company or consultancy Energy, water or utility company Oil company Public sector IT / Telecommunications companies Consulting or business services firm Retail Accountancy or professional services firm Banking or financial services Insurance company FMCG company Law firm Other 83.3% 81.3% 76.7% 76.6% 75.9% 73.3% 72.7% 66.4% 65.4% 61.3% 59.6% 57.9% 55.6% 50.0% 45.0% 58.4%
Female
16.7% 18.7% 23.3% 23.4% 24.1% 26.7% 27.3% 33.6% 34.6% 38.7% 40.4% 42.1% 44.4% 50.0% 55.0% 41.6%
Based on the responses of 115 participants
Age
Figure 1.13 indicates that almost four-fifths (78.6%) of graduates recruited in 2009 whose age is known by the responding organisation are aged 24 years or below. This represents a slight decrease of three percentage points when compared to the Winter 2009 Review. Whilst the figure reported for 25-34 year olds is broadly consistent (16.6% in 2009 compared to 16.8% in 2008), the percentage of graduates aged 35 years and over has more than doubled between 2008 and 2009 from 1.6% to 4.9%. This represents an increase of 3.3 percentage points. In absolute numbers (derived from 62 responding organisations) 2,373 recruits were 24 years old or less, 500 recruits were aged 25-34 years and 147 recruits were 35 years old and over.
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35 or older 4.9% 25 to 34 years old 16.6%
24 or less 78.6%
Figure 1.13: Percentage of graduates recruited by age Based on the responses of 62 participants (Base count of vacancies = 3020)
Ethnicity
Over half (54%) of respondents who monitor recruitment by ethnicity stated that they know the number of graduates recruited from a minority ethnic background. For these respondents, the total number of black and ethnic minority graduates recruited was 1,344, which is equivalent to an average of 21 graduates per responding organisation. Ethnic minority graduates accounted for up to 10% of all graduates recruited in 2009 in two-fifths (42.6%) of responding organisations. At 22.2%, the next largest category was 11% to 20% (22.2%) followed by 31% or more (20.4%). The average percentage of ethnic minority graduates recruited was 17.4%.
50% 45% 40% 35% 30% 25% 20% 14.8% 15% 10% 5% 0% Up to 10% 11% to 20% 21% to 30% 31% or more 22.2% 20.4% 42.6%
Figure 1.14: Percentage of graduate recruits from ethnic minorities Base = 54
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Figure 1.15 indicates that almost one-third of ethnic minority graduates recruited in 2009 were Indian (31.2%). This represents an increase of 7.8 percentage points when compared to the figure for 2008 reported in the Winter 2009 Review. At 15.7%, the next largest category is Chinese (15.7%) followed by Pakistani (11.2%).
Indian Chinese Pakistani Mixed Other Asian Black African Bangladeshi Black Caribbean Black other 0% 1.7% 5% 10% 15% 20% 25% 30% 8.3% 6.5% 5.2% 11.2% 9.6% 10.7% 15.7%
31.2%
35%
Figure 1.15: Breakdown of ethnic minority graduates recruited Base = 54
Disability
56% of respondents who monitor recruitment by disability, as defined by the responding organisation, stated that they know the number of graduates recruited with either a physical or mental impairment. Amongst these, the total number of disabled graduates recruited was 149. On average, each responding organisation recruited 3 graduates with a disability and 66 graduates without a disability.
Challenges in filling anticipated 2010 vacancies

AGR employers expecting to recruit graduates in 2010 responded to a sequence of questions about the challenges they anticipate to face in filling their vacancies on a scale of one to six, where one is definitely will face and six is definitely will not face. Candidate dropout because graduates are applying to a large number of organisations (3.34) and graduates perceptions of the industry sector (3.34) are the two main challenges that AGR employers anticipate that they are most likely to face. Whilst graduates perceptions has been a relatively consistent challenge in recent years, candidate dropout represents a new challenge and is reflective of the economic downturn which has seen unprecedented levels of youth unemployment. The recession is not only affecting those traditionally at risk of unemployment, such as the low skilled, but also those with higher
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level qualifications including recent graduates. Indeed, data published indicates that, in the quarter September to December, one in six unemployed 18-24 year olds hold a degree; this is up from one in five three years ago (Source: The Guardian, 6th January 2010). In this context, graduates are applying to a large number of organisations to increase the likelihood of success rather than identifying a more limited number to approach. Interestingly, both candidate dropout and graduates perceptions relate to the quality of applicants rather than internal issues relating to AGR employers. Dropout is an unfortunate yet understandable side effect of the tightening jobs market for employers. Late changes in the businesses requirements (3.27) is only marginally below that of candidate dropout and graduates perceptions and therefore also poses a significant challenge. In an uncertain economic climate, delayed decisions or late changes may adversely affect their ability to meet their targets for 2010.
Candidates dropout because graduates are applying to a large number of organisations Graduates' perceptions of the industry sector Late changes in the businesses' requirements Not enough applicants with the right skills Limited resources to market graduate vacancies properly Shortage of applicants in specific geographical areas Not enough applicants with the right qualifications Offering a competitive starting salary Candidates dropout because selection and assessment process is slow Offering a competitive graduate training and development programme 1.87 2.6 2.42 2.41 2.39 2.96 2.83
3.34 3.34 3.27
Figure 1.16: Relative likelihood to face different challenges in filling expected graduate vacancies in 2010 Base = 199; Mean ratings on a scale from 1 (definitely will not face this challenge) to 6 (definitely will face this challenge)
Policy Insight: Government support for employability skills

The Government has outlined plans to ask all universities to produce a statement on how they promote student employability, setting out what they are doing to prepare their students for the labour market, and how they plan to make information about the employment outcomes of their provision available to prospective students. Universities will be expected to demonstrate how they prepare their students for the world of work and support the development of generic employability skills such as team working, business awareness and communication.
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Graduate salaries in 2009 and 2010

For the second consecutive year, it is predicted that there will be no change in the median starting salary of graduates working for AGR employers in 2010. For the first time in the history of the Graduate Recruitment Survey, the Winter 2009 Review predicted stagnation in salary levels; both the Summer 2009 and Winter 2010 Reviews confirmed this to be true with the average graduate employed by an AGR employer earning 25,000 in 2009. Although the 2010 figures are predictions, this trend looks set to continue in the prevailing economic climate with the class of both 2009 and 2010 the first cohorts to pay top-up fees for higher education provision in England and Wales feeling the full impact of the downturn (Figure 1.17).
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (predicted) 0% 0.0% 0.0% 1% 2% 3% 4% 5% 1.8% 2.0% 2.4% 3.4% 2.7% 2.6% 4.1%
5.7%
7.1%
6%
7%
8%
Figure 1.17: Changes in median graduate starting salaries at AGR employers 2000 - 2010 (predicted) Percentage increase or decrease on previous year (varying bases)
Comparative Data: Median salary for adults with a degree or equivalent qualification
The Labour Force Survey, which interviews some 53,000 UK households each quarter, is one of the most drawn upon sources of information on the labour market. It asks questions about all aspects of the labour market, including salary level. The latest publicly available data indicates that, in the quarter July to September 2009, the median salary for adults with a degree or equivalent level qualification was 30,004. This amounts to a difference of 17% when compared to the median salary offered by AGR employers. However, it must be remembered that the figure reported in the Labour Force Survey is the average salary for all degree qualified adults in the UK and not a starting salary. In this context, the starting salary offered by AGR employers is, therefore, competitive.
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Figure 1.18 indicates that one-quarter (25.0%) of responding AGR employers expect to offer a starting salary of between 24,001 to 26,000 in 2010, with a fairly even distribution between 22,001 to 24,000 (20.1%) and 26,001to 31,000 (20.7%). Just under two-thirds of survey respondents are represented in these bandings.
13.0% 11.9% 7.6% 8.6% 20.7% 22.2% 25.0% 22.7% 20.1% 25.4% 4.9% 5.9% 4.9% 2.7% 3.9% 0.0% 0% 5% 10% 15% 20% 25% 30% 2010 (predicted) 2009
36,001 or more
31,001 to 36,000
26,001 to 31,000
24,001 to 26,000
22,001 to 24,000
19,001 to 22,000
Less than 19,000
Don't know
Figure 1.18: Graduate starting salaries at AGR employers in 2009 and 2010 (predicted) Base = 184
Policy Insight: The importance of a good salary

A good salary is more important than ever to recent graduates - the class of 2009 is the first to have paid up to 3,225 in top-up fees for each year of study and the financial cost of obtaining a degree is only likely to increase in the future. The Government recently launched an independent review of student fees led by Lord Browne, the former head of BP, and it is widely expected that the review will recommend that the current cap on tuition fees should be lifted. Projections in a report published by Universities UK in 2009 indicated that even a modest increase in fees to 5,000 could lead to graduates owing an average of 26,000.
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Graduate salaries in 2009 by business sector

Investment bank or fund managers top the salary chart in 2009 with a median starting salary of 38,250 an increase of 3,250 when compared to 2008. Law firms have dropped from first to second place in figure 1.19, which is in part accounted for by the drop in salary offered by this sector, from 37,000 in 2008 to 35,000 in 2009. Oil companies for the first time appear in the chart in third place. Not unsurprisingly, third sector organisations offer the lowest median started salary in 2009 at 19,000 followed by the public sector and retail (both offering starting salaries of 23,000).
Investment bank or fund managers Law firm Oil company Banking or financial services Consulting or business services firm IT / Telecommunications companies Motor manufacturer Insurance company FMCG company Accountancy or professional services firm Energy, water or utility company Transport or logistics company Engineering or industrial company Construction company or consultancy Retail Public sector Third sector Other 28,500 27,750 27,000 26,000 25,500 25,500 25,000 25,000 23,500 23,500 23,000 23,000 23,000 19,000 25,000
38,250 35,000 33,500
Figure 1.19: Median graduate starting salaries at AGR employers in 2009 by sector Base = 184
Graduate salaries in 2009 by region

Unsurprisingly, London continued to top the median starting salary table in 2009, although the decrease observed in recent years has continued from 28,375 in 2007, 28,000 in 2008 and 27,750 in 2009. The South East has maintained its position in second; however, the Midlands has over-taken the South West for third place thus suggesting a narrowing of the gap between the South and elsewhere. Interestingly, East Anglia which offered a median starting salary in 2008 of 23,250 has dropped from fourth to last of all of the regions in the UK (Table 1.20). This may reflect changes to the sectors recruiting in this area since the Winter 2009 Review; in 2008, accountancy was the main sector whereas in 2009 it was retail.
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Table 1.20: 2009 starting graduate salaries by geographical area

Median salary
London (Base= 136) South East (Base= 78) Midlands (Base= 75) South West (Base= 71) North West (Base= 74) Scotland (Base= 65) Yorkshire (Base= 57) Wales (Base= 34) Northern Ireland (Base= 25) North East (Base= 45) East Anglia (Base= 30) 27,750 24,500 24,000 24,000 23,750 23,500 23,500 23,250 23,000 23,000 23,000
Upper Quartile
33,500 27,000 26,000 26,500 25,000 26,000 25,000 25,000 25,000 25,500 25,000
Lower Quartile
24,500 23,000 23,000 23,000 23,000 22,250 22,750 20,500 20,750 22,500 23,000
USA (Base= 2) Europe (Base= 20) Asia (Base= 5) Ireland (Base= 8) Offshore British Islands (Base= 4) Rest of the world (Base= 5)
34,750 28,500 28,500 25,000 25,000 26,750
36,000 37,750 37,250 27,750 27,750 37,250
33,500 22,500 24,750 23,000 20,500 22,000
Comparative Data: Median salary for adults with a degree or equivalent qualification by region
Data from the Labour Force Survey similarly confirms the dominance of the South in terms of salary level. Analysis of data on the median salary for adults qualified to degree level or equivalent in the UK by Government Office Region for the quarter July to September 2009 indicates that London tops the table at 34,008. It is followed by the South East (33,592), East of England (32,578) and West Midlands (30,004). The North East and North West regions offer the lowest median salary at 27,976 and 27,248 respectively. The regions used in the Graduate Recruitment Survey differ marginally from the classification of Government Office Region used in major national datasets; development work will be undertaken to align these sectors to facilitate analysis in the future.
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Graduate salaries in 2009 by career area

Table 1.21 indicates that investment banking continued to offer the highest median starting salary when compared to all other career areas offered by AGR employers in 2009. This is consistent with the Winter 2009 Review, although it should be noted that legal work which previously shared first place with investment banking has dropped to second in the chart with a difference of 3,250 between these functions. This is reflective of the decrease in median starting salaries in the legal sector, from 37,000 in 2008 to 35,000 in 2009. Consulting, actuarial work and IT have maintained their positions in third, fourth and fifth place, with small increases in salary observed for all career areas apart from IT, where a decrease of 500 is apparent. However, the most notable difference is in relation to accountancy, which was previously in sixth place with a median starting salary of 25,000, now sits in fifth from the bottom of the table in seventeenth place. Although only a relatively modest decrease of 500 in the median starting salary of graduates entering this function is apparent when compared to 2008, other career areas including sales, science, purchasing, electrical engineering, mechanical engineering, and research and development have increased their salaries and overtaken accountancy in the table.
Table 1.21: 2009 starting graduate salaries by career area
Median salary Investment banking (Base= 16) Legal work (Base= 34) Consulting (Base= 24) Actuarial work (Base= 15) IT (Base= 63) Sales (Base= 31) Science (Base= 14) Financial management (Base= 48) Electrical / electronic engineering (Base= 35) Human resources (Base= 43) Marketing (Base= 41) Research and development (Base= 21) Manufacturing engineering (Base= 21) Purchasing (Base= 22) Logistics (Base= 20) Mechanical engineering (Base= 38) Accountancy (Base= 45) General management (Base= 48) Civil engineering (Base= 22) Retail management (Base= 14) Other (Base= 37) 38,250 35,000 28,250 28,000 26,000 26,000 25,500 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 24,750 24,500 24,500 24,250 23,750 24,000 Upper Quartile 41,500 37,250 32,250 30,000 28,500 27,250 27,500 28,500 26,750 27,000 26,750 27,500 26,500 26,250 27,000 26,000 26,000 27,000 25,250 26,750 27,000 Lower Quartile 32,250 26,250 25,250 25,000 23,750 23,000 25,000 23,500 23,000 23,000 23,000 24,000 23,000 23,500 23,000 23,000 23,000 23,000 23,000 23,000 23,000
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Expected salary changes in 2010 by business sector

Table 1.22 is reflective of the predicted stagnation in the overall median starting salary of graduates recruited during the 2010 season, with eight sectors reporting no change in the salary level offered to graduates. Of these, this is the second consecutive year for which there is no change for investment bank or fund managers. The banking or financial services and accountancy or professional services sectors experienced a decrease between 2008 and 2009 and is, therefore, indicative of the levelling off of their salary levels. The anticipated stagnation in public sector salaries is in part accounted for by the squeeze on public sector salaries and pensions as the Government attempt to scale back the 178 billion deficit. The Pre-Budget Report issued in December 2009 indicates that this is set to continue with a two year cap of 1% on all public sector pay settlements from 2011. At 8.7%, the largest increase can be seen in construction, which is the only sector to increase its salary for a second consecutive year. Transport and logistics, consulting or business services firms and law reported no change between 2008 and 2009.
Table 1.22: Predicted salary change from 2009 to 2010 (predicted) by sector
Construction company or consultancy Transport or logistics company IT / Telecommunications companies Consulting or business services firm Law firm Energy, water or utility company Banking or financial services Accountancy or professional services firm Public sector Investment bank or fund managers Retail Oil company Third sector FMCG company Insurance company Engineering or industrial company +8.7% +6.4% +5.6% +2.7% +2.5% no change no change no change no change no change no change no change no change -2.0% -2.0% -2.1%
Base= 179* *Participants who recruited in a specific sector in 2009 but are not planning to recruit in that sector in 2010 were not taken into account for the calculation of salary changes. As a result, some sectors do not appear in the above table.
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Lump sum payments to graduates in 2010

Figure 1.23 indicates that just over one-quarter (26.6%) of responding organisations intend to attract and reward successful candidates in 2010 with a lump sum payment. Not unexpected in the current economic climate, this amounts to a decrease of 6.3 percentage points since the Winter 2009 Review. It follows that there has been a significant increase in the percentage answering no in response to this question (64.5% compared to 55.1% in the Winter Review which amounts to 9.4 percentage points).
Yes 26.6%
Don't Know 8.9%
No 64.5%
Figure 1.23: Proportion of employers expecting to pay lump sums to graduate recruits Base = 203
At 33.3%, the largest category is lump sums between the value of 1001 and 2,000. Just under onequarter (24.1%) of responding organisations pay between 2,001 and 3,000 whilst one-fifth (22.2%) pay 4,001 and above (Figure 1.24). The median lump sum expected to be offered by AGR employers in 2010 is 2,500, which represents an increase in this figure for the first time since 2008 of 500.
4,001 or more 3,001 to 4,000 2,001 to 3,000 1,001 to 2,000 Less that 1,000 Don't Know 0% 3.7% 5% 10% 15% 20% 9.3% 7.4%
22.2%
24.1% 33.3%
25%
30%
35%
40%
Figure 1.24: Predicted lump-sum payments for 2010 Base = 54
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Lump sums are paid when graduates start work in the vast majority of organisations (79.6%); only a small minority (11.1%) make a payment when the offer is made. At 46.3%, payment is in addition to salary in almost half of responding organisations.
Paid when graduate starts work
79.6%
Payment is in addition to salary
46.3%
Paid when offer is made
11.1%
Payment is repayable loan
7.4%
Payment is an advance of salary
3.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Figure 1.25: Facts about lump-sums paid - Base = 54
Education premiums and other remuneration for graduates in 2010

Just under one-third (29.7%) of responding organisations intend to offer a financial premium for qualifications above an undergraduate degree in 2010. This represents an increase of 11.7 percentage points when compared to the Winter 2009 Review and thus suggests that competition for talent continues despite the economic crisis. Figure 1.26 indicates that more organisations offer a financial premium for PhD degrees (12.3%) than for a postgraduate degree (9.9%), such as an MA or MSc. Relevant work experience attracts a financial premium in only a small minority of responding organisations (5.9%). PhD degrees attract the highest median financial premium at 3,000 followed by postgraduate degrees (1,125) and relevant work experience (1,000). Please note: the above percentages have been calculated on the total number of respondents to this question rather than those who offer educational premiums only, as in the Winter 2009 Review. These figures are, therefore, not directly comparable with previous Graduate Recruitment Surveys and should be used indicatively.
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We do not pay premiums PhD degree Postgraduate degrees Relevant work experience Other qualifications 0% 12.3% 9.9% 5.9% 4.9% 10% 20% 30% 40% 50% 60%
70.4%
70%
80%
Figure 1.26: Qualifications for which premiums are paid - Base = 203
Pension schemes (96.1%) and training for professional qualifications (84.7%) continue to be offered by the vast majority of responding organisations in 2010 and maintain their position as the popular non-monetary benefits. Private healthcare (65.0%), free or subsidised sports and leisure facilitates (60.1%) and study leave and sponsorship (59.6%) remain in third, fourth and fifth position in the table when compared to the Winter 2009 Review with almost no discernible difference in the percentages reported. Whilst the relocation package continues to fall in popularity (30.0% compared to 33.9%), it is travel where the largest decrease is apparent; it has dropped by 8.3 percentage points from 40.3% in 2009 to 32.0% in 2010 (Figure 1.27).
Pension Scheme Training for professional qualifications Private healthcare Free or subsidised sports or leisure facilities Study leave or sponsorship Travel Relocation package Share options/schemes Company car We will not offer any benefit Don't Know 0% 0.5% 0.5% 20% 40% 60% 80% 6.9% 32.0% 30.0% 29.6% 65.0% 60.1% 59.6% 84.7%
96.1%
100%
Figure 1.27: Benefits offered - Base = 203
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Chapter 2 Graduate recruitment marketing
36
Graduate recruitment marketing

In this section we turn the spotlight on AGR members graduate recruitment marketing practices, and in particular the size of recruitment marketing budgets and the proportionate spend on different marketing activities and approaches. Employers were asked to specify their actual spend in 2009 and their predicted spend in 2010 on key marketing activities. These activities were: employers own graduate recruitment brochures and websites; graduate recruitment advertising; online graduate recruitment promotions; and employer presence at graduate careers fairs and on-campus presentations. The survey also asked employers to indicate how their spending was distributed within each of these areas.
Total marketing spend in 2009 and 2010

The final year-end data for total marketing spend per organisation indicates that the predictions made by AGR employers for 2009 were extremely optimistic. Estimated at 80,000, the actual figure was some 60,000 less at 20,000. This suggests that the full impact of the recession was not felt until after AGR employers set their budgets for the 2009 recruitment season and, as the economic climate worsened, they were forced to downgrade their total marketing budget. More positively for 2010, no further decrease is expected with median total marketing spend remaining steady at 20,000. Figure 2.1 indicates an increase in predicted marketing spend in 2010 across all bandings with the exception of 30,001 to 40,000 and 40,001 or more. Whilst a decrease of only 1.1 percentage points is apparent in relation to the former, the equivalent figure for 40,001 or more is considerable at 10.1. The increase observed across the remaining categories is marginal, with no difference observed in relation to 10,001 to 20,000; the notable exclusion is the category 20,001 to 30,000 which has increased by 9.1 percentage points.
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40,001 or more 3.7% 4.8%
19.7% 29.8%
30,001 to 40,000
20,001 to 30,000 8.5% 8.5% 6.9% 6.4% 5.3% 4.3%
46.3% 37.2%
10,001 to 20,000
4,001 to 10,000
Up to 4,000
2010 (predicted) No Budget 9.6% 9.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2009 45% 50%
Figure 2.1: Median total spending on graduate recruitment marketing in 2009 and 2010 (predicted) Base = 188
Graduate recruitment marketing activities in 2009

The traditional mainstays of graduate recruitment marketing activity continue to feature in AGR members recruitment plans for 2010. As Figure 2.2 shows over nine-tenths (92.8%) of respondents to the survey plan to utilise brochures and/or company websites, with 89.7% of recruiters planning to use on-campus activities such as attendance at careers fairs, presentations or promotions. Interestingly, although still an important method of marketing, the percentage of recruiters saying they will use paper-based advertising has fallen from 95.1% in the Winter 2009 Review to 86.7%. This may be an indication of planned cutbacks in advertising during the recession.
Brochure/company website
92.8%
Career fairs/campus presentations or promotion
89.7%
Advertising
86.7%
Online promotion
72.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Figure 2.2: Graduate recruitment marketing activities planned for 2010 - Base = 195
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Spend on key activities in 2009 and 2010

Figure 2.3 indicates an interesting finding: that there is no difference in the predicted median spend of responding AGR employers in both 2009 and 2010 on online promotions, careers fairs and paper-based advertisements. This is particularly surprising given the increasing popularity of online methods, including social media. Expenditure on careers fairs and paper-based advertisements in 2009 was less than that predicted in the Winter 2009 Review (by 5,000 and 6,000 respectively), presumably as a consequence of the economic climate, with the figures reported predicted to remain static in 2010. An increase in spend on recruitment websites is predicted, with a decrease expected for recruitment brochures.
15,000 Online promotions (Base= 95) 15,000 15,000 Careers fairs/ campus promotions (Base= 135) 15,000 15,000 Paper Based ads (Base= 127) 15,000 7,000 Recruitment website (Base= 125) 5,000 2,000 Recruitement brochure (Base= 139) 3,750
2010 (predicted) 2009
Figure 2.3: Median spend 2009 and 2010 (predicted) on key activities Varying Bases
Marketing spend per vacancy

Marketing spend per vacancy has been calculated by dividing the total marketing budget available to AGR employers in 2009 and 2010 by the number of vacancies. At 800, the median marketing spend per vacancy in 2009 was significantly below the figure of 2,533 predicted in the Winter 2009 Review. Moreover, this is predicted to decrease further still during the 2010 recruitment season to a meager 540. This is reflective of the slowdown in graduate vacancies and salaries which had not impacted upon graduate recruitment marketing until the 2010 season. It follows that, in contrast to the Winter 2009 Review, a small decrease in median marketing spend per vacancy is apparent across all bandings (Figure 2.4) with the exception of up to 1,000, which has increased by 7.2 percentage points from 47.2% to 54.4%. Smaller proportions of AGR employers are, therefore,
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expected to be spending in the highest brackets in 2010 which is reflective of the overall decrease in marketing spend per vacancy. Moreover, an increase of 2.5 percentage points is apparent in relation to the percentage of organisations with a null budget per vacancy which is predicted to increase from 5.6% in 2009 to 8.1% in 2010.
10,001 to 20,000
1.9% 3.7% 7.5% 10.6% 8.1% 11.2% 20.0% 21.7%
4,501 to 10,000
2,501 to 4,500
1,001 to 2,500
Up to 1,000 47.2% 8.1% 5.6% -10% 0% 10% 20% 30% 40% 50%
54.4%
Null budget per vacancy
60%
Figure 2.4: Median marketing spend per vacancy in 2009 and 2010 (predicted) Base = 161
Targeting universities in 2009 and 2010

When asked if they had targeted UK universities for campus events or local advertising, the vast majority of AGR recruiters (82.2%) said they had done so. This proportion is forecast to remain largely unchanged into 2010 (82.6%) (Figure 2.5).
82.6% Yes 82.2% 13.1% No 17.4% 4.2% Don't Know 0.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2010 (predicted) 2009 90% 100%
Figure 2.5: Whether targeted and whether will target UK universities - Base = 213
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Further analysis of those 175 employers who targeted UK Universities for campus events and local advertising shows that 42.9% of employers targeted between 1 and 10 universities, with a further 33.7% targeting between 11 and 20 universities and 22.9% targeting over 20 universities. As Figure 2.6 shows, the forecasted picture is one of an increase in the proportion of employers targeting the mid range figure of 1120 universities with a resultant reduction in the numbers seeking to target 10 or less and 20 or more.
50% 45% 40% 35% 30% 25% 19.9% 20% 15% 10% 5% 0% 1 to 10 11 to 20 more than 20 22.9% 37.5% 42.9% 38.6% 33.7%
4.0% 0.6% Don't know
Figure 2.6: Number of UK Universities targeted for campus events in 2009 and 2010 (predicted) Base (2009) = 175; Base (2010) = 176
Personal contact with university careers advisers is the most utilised form of communication with universities with 65.7% of AGR members saying they adopted this approach. A further 41.7% of members said they had made personal visits to academics on campus. The broader approach of the use of open days for careers advisers and academics were less popular methods of communication with universities in 2009 with 34.9% and 13.7% of recruiters adopting these approaches respectively. However, significantly more recruiters are planning to use open days in 2010 with 43.2% of recruiters saying that they plan to run open days with careers advisers and 22.7% mentioning that they plan to run open days with academics. This growth is in part attributed to AGR-led sector focus groups. In 2009, four sectors (retail, banking or financial services, engineering and FMCG) ran events targeted specifically at careers advisers; in 2010, the number of sectors running similar events is expected to increase to six.
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67.0% Personal visits to careers advisors on campus 65.7% 47.7% Personal visits to academics on campus 41.7% 43.2% Open days' for careers advisors 34.9% 22.7% Open days' for academics 13.7% 2010 (predicted) 11.9% Don't Know 5.1% -10% 0% 10% 20% 30% 40% 50% 60% 70% 2009
Figure 2.7: Communication methods used to contact universities in 2009 and 2010 (predicted) Base (2009) = 175; Base (2010) = 176
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Chapter 3 Hot topics in graduate recruitment
43
Hot topics in graduate recruitment

This final chapter of the Winter Review addresses a series of current hot topics in graduate recruitment. The chapter begins with our annual look at the prevalence of school-leaver entry programmes among AGR employers, as well as examining the proportions of members who actively recruit for UK vacancies abroad and their reasons for doing so.
Policy Insight: The demand for university places is outstripping supply

In January 2010, the Higher Education Statistics Agency revealed that than 1.14m students started undergraduate or postgraduate courses in 2008/09 a jump of 7% on the previous year. In the face of this unprecedented demand, it is estimated that as many as 200,000 individuals could miss out on a place at university. Cuts in the higher education budget have also meant that universities face fines if they recruit more students than planned, despite the slow progress being made towards the Governments target of 50% of 18-30 year olds achieving a higher level qualification. In Skills for Growth, the Governments national skills strategy published in 2009, this target was increased to 75% and expanded to include young people completing an advanced apprenticeship or equivalent technician level course.
School-leaver entry programmes

The proportion of AGR employers who offer a school-leaver entry programme for 16 to 18 year olds has declined from 29.7% in the Winter 2009 Review to just over 26.3%. An entry programme for school-leavers is under consideration at 12.6% of those organisations who currently do not operate one (see Figure 3.1). This is an increase from the 10.6% of employers who reported they were considering implementing an entry programme for school-leavers in the last Winter Review.
44
Yes 26.3% Don't Know 6.6% Don't know 2.8% No 70.9%
Yes 12.6%
No 80.8%
Figure 3.1: Proportions of employers operating a school-leaver entry programme (16-18 years) Base = 213
Figure 3.2: Proportion of employers not yet operating but considering a school-leavers programme Base = 15
Recruiting for UK vacancies overseas

The number of AGR members looking overseas to fill UK graduate vacancies continues to steadily fall. Onefifth (22.8%) of survey respondents reported this as being part of their recruitment policy in Winter 2009 Review, while this year (as shown in Figure 3.3) the figure has fallen again to 18.4%. This may be a reflection of the tightening graduate jobs market, resulting in more home-grown talent applications and less need to look overseas. Of the AGR employers who plan to recruit overseas, 25.6% are from the investment bank or fund manager sector, with a further 17.9% from engineering or industrial companies and 12.8% from the banking or financial services sector. All of these expect an increase in vacancies in 2010. Just under one-third (30.8%) of those respondents who actively market UK vacancies abroad limit this activity to Europe, down from 36.0% in last years Winter Review (see Figure 3.4).
Yes 18.4% Europe 30.8% Don't know 2.4%
Global 69.2% No 79.2%
Figure 3.3: Proportions of employers actively marketing UK vacancies overseas - Base = 212
Figure 3.4: Foreign marketing: geographical extent Base = 17
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Figure 3.5 reflects a strong concern with widening the talent pool when it comes to graduate recruitment. Respondents were asked to rate on a scale of one to six how important the following factors are in their decision to recruit overseas, where one is not important at all and six is very important. Of those organisations who actively recruit overseas, the most important reasons for doing so are to recruit the very best talent available (5.2) and because it is deemed important for international business to have an international workforce (5.0). More positively, overseas recruiters gave less importance to there being insufficient UK candidates with the right skills (3.0) and that graduates from other countries have a strong work ethic and desire to succeed (2.8).
To recruit the very best talent that is available 5.2
International business so we need an international workforce
5.0
Insufficent candidates with the right skills in the UK Graduates from other countries have a strong work ethic and desire to succeed Insufficent candidates with the right qualifications in the UK
3.0
2.8
2.8
Figure 3.5: Relative importance of various reasons for recruiting overseas graduates Base = 39; Mean ratings on a scale from 1 (not important at all) to 6 (very important)
Advice to graduates in difficult times

As the rate of graduate unemployment continues to rise, we asked AGR employers what advice they would offer graduates in these difficult times. Policy Insight: Wider context of graduate unemployment
While there is evidence to suggest that individuals with higher level qualifications are less likely to be unemployed, graduates are certainly not immune from the effects of the recession. Data obtained by the Liberal Democrats in December 2009 showed that the rate of unemployment in the recession is rising fastest among 18 to 24 year olds who have degrees. In the three months to September 2009, one in five unemployed 18 to 24 year olds had a degree up from one in six three years ago. (Source: The Guardian, 6 January 2010)
Respondents were asked to rate seven factors on a scale of one to six, where one is not important at all and six is very important. The mean scores are presented in Figure 3.6. As we can see, the most important advice that employers would give to graduates searching for jobs during periods of fewer vacancies is a recommendation to conduct rigorous research into potential employers (5.5) and into the sector prior to
46
interviews (5.4). This is aimed at ensuring that graduates have a clear understanding of what the business is about prior to interview. Other important advice employers would give to graduates is to hone their skills through gaining interview practice (5.2) and to be flexible and willing to relocate (5.1) to broaden the number of opportunities available to them, although interestingly we have already seen that financial support towards the cost of relocation is decreasing in popularity amongst AGR employers.
Conduct rigorous research into potential employers prior to interviews Conduct rigorous research into sector prior to interviews 5.5
5.4
Gain interview practice
5.2
Be willing to relocate
5.1
Apply early
4.8
Broaden job criteria
4.6
Be willing to do an industrial placement to get a foot in the door
4.5
Figure 3.6: Relative importance attributed to various pieces of advice to students searching for jobs during periods of fewer vacancies Base = 210; Mean ratings on a scale from 1 (not important at all) to 6 (very important)
In the current challenging climate for graduates seeking employment, some graduates might consider postponing their further job search in order to improve their employability. AGR members were, therefore, asked what advice they would give to graduates in this position on a scale of one to six, where one is not important at all and six is very important. Accepting temporary paid employment is the advice given most importance (4.7), closely followed by advice to graduates to undertake further skills training (4.2) and to accept unpaid work (4.1). This is of particular interest given that only a small proportion of survey respondents are offering an education premium for work experience in 2010. It, therefore, appears that in a competitive recruitment market graduates are increasingly being required to undertake work experience simply to gain a graduate position with an AGR employer. Clearly this advice from employers indicates the need for graduates to maintain their employability through showing a desire to take some form of employment and emphasises the importance employers put on graduates having the right skills. Employers seem less positive about advising graduates to take time out in the form of a gap year (3.6), or for them to gain experience in a field other than their preferred career area (3.6). Undertaking further educational development is the advice rated of least importance by employers (3.5). This might indicate that graduates with non-academic aims who find themselves frustrated in the job search should not always succumb to the temptation of returning to university (Figure 3.7).
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Accept temporary paid employment
4.7
Undertake skills training
4.2
Accept unpaid work
4.1
Take a gap year Gain graduate job experience in a field other than preferred career area Undertake further educational development
3.6
3.6
3.5
Figure 3.7: Relative importance attributed to various pieces of advice to students considering the postponement of their job search in order to improve their future employability Base = 206; Mean ratings on a scale from 1 (not important at all) to 6 (very important)
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Founded in 1968, the Association of Graduate Recruiters is an independent, not-for-profit organisation dedicated to supporting employers in all aspects of graduate recruitment and development. Our aim is to set the agenda for change in graduate recruitment and development and our unrivalled knowledge and experience in this field gives employers the edge.
CFE are research and consultancy specialists in employment and skills. We have been providing our expert services to public and private sector clients for over twelve years. We re-invest our profits to fund innovative research projects and our Policy Insight series. With over 35 dedicated staff, we work on behalf of government departments and agencies, local authorities, colleges, universities and employers.
www.agr.org.uk
www.cfe.org.uk

AGR 2010 Winter Survey Report

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The AGR Graduate Recruitment Survey 2010

Produced for AGR by

The AGR Graduate Recruitment Survey 2010

Graduate Recruitment Survey 2010 Winter Review

Survey produced for AGR by

CFE Phoenix Yard Upper Brown Street Leicester LE1 5TE

CFE and the Association of Graduate Recruiters

Graduate Recruitment Survey 2010 Winter Review

Graduate vacancies and salaries .............................................................................................. 12

Graduate recruitment marketing ............................................................................................. 37

Hot topics in graduate recruitment .......................................................................................... 44

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Graduate recruitment marketing

Hot topics in graduate recruitment

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

The following AGR members took part in the survey A

Graduate Recruitment Survey 2010 Winter Review

Kirkland + Ellis International LLP KPMG LLP

Graduate Recruitment Survey 2010 Winter Review

SunGard Swiss Reinsurance Company

Graduate Recruitment Survey 2010 Winter Review

Chapter 1 Graduate vacancies and salaries

Graduate Recruitment Survey 2010 Winter Review

Graduate vacancies and salaries

Graduate vacancies in 2009 and 2010

-6.5% -3.4% 15.5% 5.1% 5.2% 12.7% 0.6%

2004 2005 2006 2007 2008 2009 2010 (predicted)

Graduate Recruitment Survey 2010 Winter Review

Comparative Data: Percentage change in vacancies

11-25 more 1-10 more Same as 2009

25.8% 17.4% 16.8%

11-25 f ewer 26-50 f ewer 51-200 f ewer

Graduate Recruitment Survey 2010 Winter Review

More than 500

101-250 4.6% 5.6% 8.2%

Changes in vacancies by business sector

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Comparative Data: Percentage change in vacancies by sector

Policy Insight: Government support for key sectors

Graduate Recruitment Survey 2010 Winter Review

Anticipated growth in business (b=80)

Actual growth in business (b=79)

More focus on graduate recruitment (b=81)

Higher recent turnover of staff (b=80)

Increase in the number of applicants (b=82)

Indirect result of the current economic climate (b=32)

Improved retention rates (b=30)

Lower focus of graduate recruitment (b=31)

Graduate Recruitment Survey 2010 Winter Review

Vacancies in 2009 by business sector

Based on the responses of 195 participants (Base count of vacancies = 19,247)

Graduate Recruitment Survey 2010 Winter Review

Vacancies in 2009 by region

Vacancies in 2009 by career area

Graduate Recruitment Survey 2010 Winter Review

Graduate Recruitment Survey 2010 Winter Review

Achievement of 2009 recruitment targets