The Graduate Market in 2015 Annual review of graduate vacancies & starting salaries at Britain’s leading employers
Produced by High Fliers Research
Produced by:
High Fliers Research Limited King’s Gate 1 Bravingtons Walk London N1 9AE Telephone 020 7428 9000 Fax 020 7428 9111 Email surveys@highfliers.co.uk Web www.highfliers.co.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. © High Fliers Research Limited 2015. 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 the prior permission of the publisher, High Fliers Research Limited.
The Graduate Market in 2015
Contents
Page
Executive Summary
5
1.
Introduction
7
Researching the Graduate Market About High Fliers Research The Times Top 100 Graduate Employers
2.
Graduate Vacancies
9
Job Vacancies for Graduates Graduates Recruited in 2014 Expected Graduate Vacancies in 2015
Type & Location of Graduate Vacancies in 2015 Changes to Graduate Vacancies 2005-2015
3.
Graduate Starting Salaries Starting Salaries for Graduates Graduate Salaries in 2015
19
4.
Internships &Work Placements
23
Recruiting Graduates through Work Experience Programmes Availability of Work Experience in 2015
5.
Graduate Recruitment in 2014-2015
26
Promoting Graduate Programmes Graduate Recruitment Challenges in 2014-2015 Graduate Recruitment Promotions in 2014-2015 Universities Targeted by Employers in 2014-2015 Graduate Applications Received in 2014-2015
3
New to graduate recruitment? Get off to a flying start. For the last twenty years, High Fliers Research has conducted detailed research into the graduate recruitment market in the UK, providing the country’s leading employers with a unique insight into the attitudes and aspirations of final year university students. Now, the company is delighted to offer professional training for new or recently-appointed graduate recruiters through intensive one-day courses , available monthly throughout the year at the High Fliers Research Centre in London. The courses have been designed to provide a highly practical insight into best-practice graduate recruitment and are ideal for those with up to 12 months experience of working in recruitment marketing or selection. For more information about future training courses or to book a place, please call Carla Smith on 020 7428 9000 or email carla.smith@highfliers.co.uk
The Graduate Market in 2015
Foreword
Executive Summary
The Graduate Market in 2015 is a study of the latest graduate vacancies and starting salaries at the UK’s one hundred best-known and most successful employers, conducted by High Fliers Research during December 2014 : • The number of graduates hired by organisations featured in The Times Top 100 Graduate Employers rose by 7.9% in 2014, compared with recruitment in 2013, the largest annual rise in graduate recruitment for four years. • Last-minute increases in employers’ recruitment targets and a sharp rise in the number of graduates turning down or reneging on job offers meant that more than 700 graduate positions were left unfilled last year. • The UK’s leading employers plan to expand their graduate recruitment even further in 2015 with 8.1% more entry-level vacancies than last year, the third consecutive year that graduate vacancies have increased. • This substantial increase in graduate vacancies for 2015 takes graduate recruitment beyond the pre-recession peak in the graduate job market in 2007 and means that there will be more opportunities for this summer’s university-leavers than at any time in the last decade . • Employers in nine out of thirteen key industries and employment areas are expecting to take on more new graduates than in 2014. • The largest growth in vacancies is expected in the public sector , accounting & professional services firms , banking & finance employers , retailers and the Armed Forces , which together intend to recruit over 1,200 extra graduates in 2015. • The largest recruiters of graduates in 2015 will be Teach First (2,060 vacancies) , PwC (1,570 vacancies) and Deloitte (1,100 vacancies) . • Recruiters have confirmed that 31% of this year’s entry-level positions are expected to be filled by graduates who have already worked for their organisations , either through paid internships, industrial placements or vacation work. • Graduate starting salaries at the UK’s leading graduate employers are expected to increase for the second year running in 2015, reaching a median of £30,000 for the first time. • More than a quarter of top graduate programmes will pay new recruits more than £35,000 when they start work and four organisations are offering salaries in excess of £45,000 to this year’s graduates. • The most generous salaries in 2015 are those on offer from investment banks (median of £45,000) , law firms (median of £40,000) , banking & finance firms (median of £36,500) and oil & energy companies (median of £32,500) .
5
The Graduate Market in 2015
• The highest published graduate starting salaries for 2015 are at Aldi (£42,000) and the European Commission (£41,500) . • There is little evidence that graduate starting salaries are rising in reaction to the introduction of higher university tuition fees – most employers that have opted to increase their graduate pay in either 2014 or 2015 appear to have done so in order to compete effectively with other employers recruiting graduates. • Over four-fifths of the UK’s leading graduate employers are offering paid work experience programmes for students and recent graduates during the 2014-2015 academic year – an unprecedented 13,049 paid work placements are available. • Two-thirds of employers provide paid vacation internships for penultimate year students and over half offer industrial placements for undergraduates (typically lasting 6-12 months as part of a university degree course). • Many more employers now also have work experience places for first year undergraduates – over a quarter of organisations offer paid internships and two-fifths of employers run introductory courses, open days and other taster experiences for first year students. • Nearly half the recruiters who took part in the research repeated their warnings from previous years – that graduates who have had no previous work experience at all are unlikely to be successful during the selection process and have little or no chance of receiving a job offer for their organisations’ graduate programmes. • A quarter of the country’s leading employers have increased their graduate recruitment budgets for the 2014-2015 recruitment round. • Employers have been actively marketing their 2015 graduate vacancies at an average of 19 UK universities, using a variety of local recruitment presentations , campus careers fairs , skills training events, promotions through university careers services , online advertising and social media . • Graduate recruiters made more use of local careers fairs , recruitment presentations , skills training events , campus brand managers and social media , during this year’s recruitment campaigns – and did less advertising in local career guides and sector guides. • The ten universities most-often targeted by Britain’s top graduate employers in 2014- 2015 are Manchester, Nottingham, Warwick, Cambridge, Oxford, Durham, Bristol, Imperial College London, University College London and Leeds. • A third of employers said they had received more completed graduate job applications during the early part of the recruitment season than they had last year and a similar proportion believed the quality of applications had improved too. • Together, the UK’s top employers have received 6% more graduate job applications so far, compared with the equivalent period in the 2013-2014 recruitment round.
6
The Graduate Market in 2015
Chapter 1
Introduction
Researching the Graduate Market Welcome to The Graduate Market in 2015 , the annual review of graduate vacancies and starting salaries at Britain’s top employers, produced by High Fliers Research . This research, conducted during December 2014, examines how many graduates the leading employers recruited in 2014 and assesses their latest recruitment targets for 2015. It also analyses the starting salaries on offer to new graduates,
the number of paid work experience places that are available to students & recent graduates, and reviews the promotions being used by employers to publicise their graduate vacancies during the 2014-2015 recruitment season. This is the tenth year that High Fliers Research has produced its independent assessment of the graduate job market. The research is based on a study of graduate recruitment at the organisations named as The Times Top 100 Graduate Employers 2014 in a poll of 18,336 final year students to find “Which employer offers the best opportunities for graduates”. About High Fliers Research Established in 1994, High Fliers Research is an independent market research company which specialises in student and graduate research. It has worked with more than 140 leading employers to measure the impact of their graduate recruitment campaigns on campus and help them understand their position in the graduate job market.
The company is best-known for The UK Graduate Careers Survey – its comprehensive annual study of over 18,000 final year undergraduates at thirty leading universities – which is supported and funded by up to 70 national & international employers each year. The survey gives employers a unique insight into the career expectations and aspirations of final year students – just weeks before they graduate – and provides a definitive record of their search for a graduate job.
For the last decade, High Fliers Research has also conducted regular surveys of Britain’s top employers to research current graduate vacancy levels, starting salaries and benchmark the latest graduate recruitment practices. The company hosts The National Graduate Recruitment Conference , a one-day event held exclusively for graduate recruiters in September each year, as well as providing monthly professional training courses for new recruiters. Internationally, High Fliers Research works closely with the Australian Association of Graduate Employers , the South African Graduate Recruitment Association and the New Zealand Association Graduate Recruitment to carry out their annual surveys of graduate employers, new recruits and young managers.
7
The Graduate Market in 2015
The Times Top 100 Graduate Employers As part of the campus research for The UK Graduate Careers Survey 2014 , 18,336 final year students from thirty leading universities were asked the unprompted question “Which employer do you think offers the best opportunities for graduates?”.
Between them, finalists named over 1,200 different organisations during the survey – the one hundred employers with the most student votes formed The Times Top 100 Graduate Employers for 2014. It is these employers that are included in the research for The Graduate Market in 2015 report:
McKinsey & Company MI5 – The Security Service Microsoft Mondelēz International Morgan Stanley Morrisons Nestlé Newton Europe NGDP for Local Government NHS Norton Rose Fulbright Oxfam Penguin Random House Police Procter & Gamble PwC RAF Red Bull Rolls-Royce Royal Bank of Scotland Group
Accenture Airbus Aldi Allen & Overy Apple Arcadia Group Army Arup Asda Atkins BAE Systems
Department for International Development Diageo DLA Piper Dyson E.ON EDF Energy European Commission ExxonMobil EY GlaxoSmithKline Goldman Sachs Google Grant Thornton Herbert Smith Freehills Hogan Lovells HSBC IBM J.P. Morgan Jaguar Land Rover John Lewis Partnership KPMG L’Oréal Lidl Linklaters Lloyds Banking Group Lloyd’s Foreign & Commonwealth Office Freshfields Bruckhaus Deringer Frontline GE
Bain & Company Baker & McKenzie Bank of America Merrill Lynch Barclays BBC
BlackRock Bloomberg Boots Boston Consulting Group BP British Airways British Sugar BT Cancer Research UK Centrica Channel Four Citi Civil Service Clifford Chance Credit Suisse Deloitte Deutsche Bank
Royal Navy Sainsbury’s Santander Savills Shell Siemens Sky Slaughter and May Teach First Tesco Transport for London UBS Unilever WPP
M&S Mars McDonald’s
8
The Graduate Market in 2015
Chapter 2
Graduate Vacancies
Job Vacancies for Graduates The first part of the research examines the number of graduate vacancies available at the UK’s leading employers in 2015, compared with recruitment in 2014. Graduate vacancies for 2015 are typically positions with an autumn 2015 start date, promoted during the current 2014-2015 recruitment season. A year ago, The Graduate Market in 2014 reported that following a modest increase in the number of graduates hired in 2013, the country’s top employers were planning to expand their graduate recruitment substantially in 2014. Vacancies for university-leavers were expected to rise by at least 8%, taking graduate recruitment to its highest level since 2007. The latest research shows the outlook for 2015 continues to be very upbeat with the UK’s leading employers expecting to hire 8.1% more graduates than were recruited during 2014, making this the third year running that graduate vacancies have increased (see Chart 2.1 ).
Chart 2.1 How Employers’ Vacancies for Graduates Changed from 2005 to 2015
Up 8.1%
2015
Up 7.9%
2014
Up 2.5%
2013
2012
Down 0.8%
Up 2.8%
2011
Up 12.6%
2010
Down 17.8%
2009
Down 6.7%
2008
Up 10.1%
2007
Up 10.8%
2006
Up 10.9%
2005
15
-15
Percentage change in graduate vacancies on the previous year 10 5 0 -10 -5
20
-20
Source - The Graduate Market in 2015
9
The Graduate Market in 2015
Graduates Recruited in 2014 The last six years have certainly been a turbulent time for the graduate job market. Although nearly a quarter of graduate vacancies at the UK’s best-known employers were cut at the start of the recession in 2008 and 2009, employment prospects for university-leavers improved considerably over the following two years, but dipped again during the 2012 recruitment season before recovering once more in 2013. At the start of the 2013-2014 graduate recruitment season in September 2013, it was clear that a much more buoyant mood had returned, with the leading employers preparing to hire 1,000 additional new recruits in 2014, compared with their graduate recruitment in 2013. As the recruiting round unfolded, this confidence grew and employers’ graduate recruitment targets increased further during the season. In January 2014, recruiters were expecting the annual rise in recruitment would be at least 8% and by July 2014, the final estimate put the growth in graduate jobs at more than 12% (see Chart 2.2 ). This is the first time since before the recession that recruitment targets had risen at each stage of the recruitment season and the considerable optimism amongst employers meant that by the summer of 2014, recruiters in eleven out of thirteen key industries expected that their graduate intake would be higher than in 2013. By autumn 2014, a total of 18,129 graduates started work with the organisations featured in The Times Top 100 Graduate Employers – an annual increase of more than 1,300 graduates, compared with recruitment in 2013 (see Table 2.4 ). This is a lower figure than had been predicted in July 2014 and it is clear that in several sectors vacancies were left unfilled, either because graduates turned down job offers or reneged on offers they had accepted, or because the late change in recruitment targets had made it impossible to source additional graduates in time. Some recruiters also commented that increased competition from other recruiters and a lack of quality applications had made it difficult to fill all their vacancies. Almost three-quarters of the unfilled graduate vacancies were at accounting & professional services firms, in the public sector and the Armed Forces. Had all the available vacancies in 2014 been filled successfully, the annual increase in recruitment would have been 12.3%. Chart 2.2 How Graduate Recruitment Targets Changed during 2014
Recruitment Targets for 2014 Published in September 2013
17,901 graduate vacancies
Recruitment Targets for 2014 Revised in January 2014
18,264 graduate vacancies
Recruitment Targets for 2014 Revised in July 2014
18,753 graduate vacancies
Actual Graduates Recruited in 2014 Confirmed in December 2014
743 unfilled
18,129 graduates recruited
vacancies
15,000
0
10,000
20,000
5,000
Graduate vacancies at Britain’s top employers in 2014
Source - The Graduate Market in 2015
10
The Graduate Market in 2015
Chart 2.3 How Employers’ Graduate Vacancies Changed in 2014, compared with 2013
Recruited 50+ graduates more than in 2013
15%
Recruited 1-50 graduates more than in 2013
30%
Recruited the same number of graduates as in 2013
14%
Recruited 1-50 graduates fewer than in 2013
35%
Recruited 50+ graduates fewer than in 2013
6%
0
10
20
40
50
30
Percentage of top graduate employers
Source - The Graduate Market in 2015
Table 2.4 Analysis of Graduate Vacancies in 2014, by Industry or Business Sector
Recruitment target for 2014, as revised in Jan 2014
Recruitment target for 2014, as revised in July 2014
Actual graduates recruited by Dec 2014
Recruitment target for 2014, as published in Sept 2013
% change from recruitment in 2013 p 16.3% p 6.0% p 3.3% p 28.9% p 11.6% p 20.8% q 3.6% p 13.7% q 4.1% p 43.9% q 20.8% p 13.1% q 13.3% p 7.9%
Vacancies added (cut),
Industry or Business Sector
compared with 2013
3,848 1,036
4,442 1,157
4,174 1,094
Accounting & professional services Armed Forces Banking & finance Consulting Consumer goods Engineering & industrial Investment banking IT & telecommunications Law Media
4,000 1,050
586 62 27 140 40 297 (80) 102 (28) 116 (115) 409 (187) 1,327
955 590 372
918 617 351
849 625 386
840 600 423
1,591 2,383
1,650 2,148 830
1,726 2,122
1,575 2,265 600 714
760 709 247 526
846 659 380 437
714 338 505
368 540
Oil & energy Public sector Retailing ALL SECTORS
3,508 1,599 18,264
3,415 1,516 18,753
3,537 1,224 18,129
3,280 1,520 17,901
Source - The Graduate Market in 2015
11
The Graduate Market in 2015
Expected Graduate Vacancies in 2015 After the significant increase in graduate vacancies in 2014, it is particularly encouraging that the organisations featured in The Times Top 100 Graduate Employers are now aiming to expand their graduate recruitment programmes even further in 2015. Overall, graduate vacancies are expected to increase by 8.1% this year as more than half the leading employers are planning to recruit more graduates, with four organisations confident that they’ll be hiring at least a hundred extra graduates during 2015. A third of employers plan to recruit similar numbers of graduates to their 2014 intake, whilst a fifth have fewer entry-level vacancies this year. The median number of vacancies for at the top employers in 2015 is 100 graduates but seven of the largest employers are preparing to hire more than 500 university-leavers in the coming months (see Chart 2.6 ). The largest recruiters of graduates in 2015 are expected to be the accounting & professional services firms, public sector employers, investment banks and engineering & industrial firms, who have combined recruitment targets of over 10,000 graduate positions (see Chart 2.5 ). When compared with the final recruitment figures for 2014, vacancies for graduates are set to increase in nine of the thirteen main employment areas (see Table 2.7 ). The biggest growth is at public sector organisations, accounting & professional services firms, banking & finance employers, high street retailers and the Armed Forces, which together expect to have over 1,200 extra graduate roles in 2015. Vacancy numbers are unchanged in the IT & telecommunications sector but are likely to be lower this year at media organisations, oil & energy companies and consulting firms. Whilst this data confirms there will be another welcome increase in the number of new graduate jobs available at the UK’s top employers in 2015, recruiters warn that 31% of all vacancies are expected to be filled by undergraduates who have had previous work experience with their organisations, such as paid internships or industrial placements.
Chart 2.5 Industries or Business Sectors with the most Graduate Vacancies in 2015
4,624 vacancies
Accounting & professional services
3,771 vacancies
Public sector
1,820 vacancies
Investment banking
1,708 vacancies
Engineering & industrial
1,319 vacancies
Banking & finance
1,314 vacancies
Retail
1,246 vacancies
Armed Forces
3,000
4,000
5,000
0
1,000
2,000
Number of vacancies at top graduate employers
Source - The Graduate Market in 2015
12
The Graduate Market in 2015
Chart 2.6 Graduate Vacancies at the UK’s Top Employers in 2015
7%
Recruiting 500+ graduates
16%
Recruiting 251-500 graduates
19%
Recruiting 101-250 graduates
Median - 100 vacancies
32%
Recruiting 51-100 graduates
23%
Recruiting 1-50 graduates
3%
No graduate vacancies in 2015
0
10
20
40
50
30
Percentage of top graduate employers
Source - The Graduate Market in 2015
Table 2.7 Analysis of Graduate Vacancies in 2015, by Industry or Business Sector
Recruitment target for 2015, as revised in Dec 2014
Vacancies added (cut),
Recruitment target for 2015, as published in Sept 2014
% change from recruitment in 2014 p 10.8% p 13.9% p 20.8% q 2.4% p 10.3% p 5.0% p 2.3% p 10.6% q 14.5% q 11.7% p 13.7% p 13.9% p 8.1% NO CHANGE
% of vacancies likely to be filled by graduates who had already worked for employer
compared with 2014
Industry or Business Sector
4,624 1,246 1,319
450 152 227 (15)
Accounting & professional services Armed Forces Banking & finance Consulting Consumer goods Engineering & industrial Investment banking IT & telecommunications Law Media
4,500 1,300 1,330
29 - 61 33 54 35 74 25 52 19 55 8 23 31
610 396
570 375
37 82 41 - 75 (112) (52) 454 160 1,479
1,708 1,820
1,675 1,895
845 780 661 394
786 750 504 535
Oil & energy Public sector Retailing ALL SECTORS
3,771 1,314 19,701
3,852 1,383 19,673
Source - The Graduate Market in 2015
13
The Graduate Market in 2015
Location & Type of Graduate Vacancies in 2015 Examining where in the UK employers expect to recruit graduates for shows that more than four-fifths of organisations are offering vacancies in London for 2015 and almost half plan to hire new recruits for positions in the south east of England (see Chart 2.8 ). Whilst this doesn’t necessarily mean that the majority of graduate vacancies are in or around the M25, it does confirm that most major employers have opportunities within the region. The north west of England, the Midlands and the south west have the next highest numbers of employers recruiting graduates into them, followed by the north east of England and Yorkshire. Of all the English regions, East Anglia is the least likely to yield graduate vacancies – 40% of employers have opportunities there in 2015. A total of 46% and 39% of graduate employers have entry-level jobs on offer in Scotland and Wales respectively and a quarter are recruiting for opportunities in Northern Ireland. The Graduate Market in 2015 also records the type of job functions that employers are hoping to recruit graduates into this year. The most frequent requirement is for IT and finance vacancies – around half of employers offer roles in these areas, irrespective of their organisation’s main purpose (see Chart 2.9 ). Over a third of employers have vacancies in
Chart 2.8 Location of Graduate Vacancies at leading UK Employers in 2015
83%
London
50%
North West
50%
The Midlands
47%
South West
46%
South East
46%
Scotland
44%
North East
43%
Yorkshire
40%
East Anglia
39%
Wales
25%
Northern Ireland
0
20
40
80
100
60
Percentage of top graduate employers
Source - The Graduate Market in 2015
14
The Graduate Market in 2015
human resources or general management, a third are recruiting for marketing or engineering positions and approximately a quarter are looking for graduates to work in research & development or sales. These results underline the obvious disparity between what organisations are perceived to do and their potential recruitment needs. For example, the number of vacancies at so- called ‘IT companies’ is relatively small and yet the volume of graduates needed to work in IT functions at a wide range of employers in other business sectors is substantial.
Chart 2.9 Type of Graduate Vacancies at leading UK Employers in 2015
53%
IT
48%
Finance
37%
Human resources
36%
General management
33%
Marketing
30%
Engineering
27%
Sales
24%
Research & development
21%
Transport & logistics
19%
Accountancy
19%
Consulting
19%
Purchasing
17%
Law
14%
Retailing
12%
Investment banking
Property 10%
9%
Media
0
20
40
80
100
60
Percentage of top graduate employers
Source - The Graduate Market in 2015
15
The Graduate Market in 2015
Changes to Graduate Vacancies 2005-2015 The period from 2005 to 2007 proved to be something of a boom in graduate recruitment – the number of vacancies for university-leavers at the UK’s leading graduate employers increased by more than 10% annually and there were more opportunities for graduates in each of the fourteen key industries and business sectors. But the onset of the global financial crisis and the recession that followed in the UK had a profound effect on the graduate market and graduate vacancies at organisations featured in The Times Top 100 Graduate Employers fell by an unprecedented 23.3% in 2008 and 2009. Entry-level positions were cut in thirteen of the fourteen most sought-after employment sectors and, in all, some fifty-nine employers saw their graduate recruitment decline. The worst of the cuts took place at the investment banks, IT & telecoms firms, chemical & pharmaceuticals companies and within the media, where vacancies halved during the course of the two recruitment rounds. Just one employment area, the public sector, managed to increase its graduate recruitment over the period, stepping up vacancies by 45% during this two-year period, helped by the rapid expansion of the Teach First scheme. It is interesting to benchmark how graduate vacancies have changed over the last ten years (see Chart 2.10 ). This indexing of vacancies shows that during the two recruitment seasons between 2005 and 2007, opportunities for graduates grew by almost a quarter at Britain’s top employers, but that all of this growth and more was wiped out in the following two years, and by 2009 graduate recruitment had returned to a similar level to that recorded in 2004. Twelve months later, the graduate job market bounced back convincingly and vacancies grew by 12.6% in 2010, with a further increase of 2.8% in 2011. The recovery stalled again in 2012 but recruitment increased once more in 2013, taking vacancies to their highest level for five years. The significant 7.9% rise in graduate recruitment recorded in 2014 and the
Chart 2.10 Indexing Graduate Vacancies at the UK’s Top Employers 2005 to 2015
150
100
50
0
2014
2005
2006
2007
2008
2009
2010
2011
2015
2012
2013
Source - The Graduate Market in 2015
Source - The Graduate Market in 2015
16
The Graduate Market in 2015
further substantial increase of 8.1% expected this year means that there will be 4.9% more graduate vacancies available in 2015 compared with 2007, the pre-recession peak in graduate recruitment, and 36.2% more opportunities than in 2009, the low-point in the graduate job market during the economic crisis. Comparing this year’s graduate recruitment targets in individual industries and business sectors with the volume of new recruits hired in 2005 shows that in nine key employment areas, graduate vacancies are now higher than they were ten years ago (see Chart 2.11 ). The number of entry-level positions available for graduates in IT & telecommunications and in the public sector has more than doubled over the last ten years and training places at accountancy & professional services firms have increased by two-thirds. There are more graduate jobs too at the leading retailers, consumer goods companies, consulting firms, media companies, engineering & industrial companies and in banking & finance. However, graduate recruitment at the largest oil & energy groups, the top law firms, City investment banks and the Armed Forces remains lower than it was in 2005.
Chart 2.11 How Graduate Vacancies Changed 2005 to 2015, by Sector or Industry
Up 160%
IT & telecommunications
Up 130%
Public sector
Up 68%
Accounting & professional services
Up 41%
Retail
Up 37%
Consumer goods
Up 31%
Consulting
Up 26%
Media
Up 21%
Engineering & industrial
Up 10%
Banking & finance
Down 13%
Oil & energy
Down 16%
Law
Down 21%
Investment banking
Down 27%
Armed Forces
0
50
75
100
125
25
150
175
-50
-25
-100
-75
Percentage change in graduate vacancies between 2005 and 2015
Source - The Graduate Market in 2015
17
The Graduate Market in 2015
Summary • The number of graduates hired by organisations featured in The Times Top 100 Graduate Employers rose by 7.9% in 2014, compared with recruitment in 2013, the largest annual rise in graduate recruitment for four years. • Last-minute increases in employers’ recruitment targets and a sharp rise in the number of graduates turning down or reneging on job offers meant that more than 700 graduate positions were left unfilled last year. • The UK’s leading employers plan to expand their graduate recruitment even further in 2015 with 8.1% more entry-level vacancies than last year, the third consecutive year that graduate vacancies have increased. • This substantial increase in graduate vacancies for 2015 takes graduate recruitment beyond the pre-recession peak in the graduate job market in 2007 and means that there will be more opportunities for this summer’s university-leavers than at any time in the last decade . • Employers in nine out of thirteen key industries and employment areas are expecting to take on more new graduates than in 2014. • The largest growth in vacancies is expected at public sector organisations , accounting & professional services firms , banking & finance employers , retailers and the Armed Forces which together intend to recruit over 1,200 extra graduates in 2015. • The largest recruiters of graduates in 2015 will be Teach First (2,060 vacancies) , PwC (1,570 vacancies) and Deloitte (1,100 vacancies) . • Recruiters have confirmed that 31% of this year’s entry-level positions are expected to be filled by graduates who have already worked for their organisations , either through paid internships, industrial placements or vacation work.
18
The Graduate Market in 2015
Chapter 3
Graduate Starting Salaries
Starting Salaries for Graduates The second part of the research examines the starting salaries that top employers are planning to pay new graduates due to begin work in 2015, compared with salaries paid to graduate recruits who joined their organisations in 2014. The starting salaries quoted are generally the average national salaries that have been promoted by employers during the 2013-2014 and 2014-2015 recruitment rounds. The figures do not include additional benefits such as relocation allowances, regional weighting, subsidised company facilities or bonus schemes. For six years running from 2005, graduate starting salaries rose each year. Annual increases were initially ‘cost-of-living increases of 2-3%, but more generous rises followed in 2009 and again in 2010 as the graduate job market improved (see Chart 3.1 ). The median starting salary remained unchanged at £29,000 from 2010 to 2013, but improved slightly in 2014 and is set for a further modest rise in 2015, taking the median salary to £30,000 for the first time.
Chart 3.1 How Employers’ Graduate Starting Salaries Changed from 2005 to 2015
£30,000
2015
£29,500
2014
£29,000
2013
£29,000
2012
£29,000
2011
£29,000
2010
£27,000
2009
£25,500
2008
£24,500
2007
£23,800
2006
£23,100
2005
£15,000
£20,000
£25,000
£30,000
£35,000
Median starting salaries
Source - The Graduate Market in 2015
19
The Graduate Market in 2015
Graduate Starting Salaries in 2015 Although the median starting salary for new graduates joining the UK’s leading employers has risen for the second year running, there continues to be a very wide disparity in the salaries available from individual organisations in 2015. Three major employers are offering new graduates £20,000 or less, and yet at the very top of the market, four well-known investment banks are providing basic salaries of up to £50,000 this year and almost a third of graduate programmes at the leading employers now pay more than £35,000 (see Chart 3.3 ). Away from the City, the highest published salaries are again at Aldi, which pays graduates training to become area managers a first-year salary of £42,000, and the European Commission, where new graduates are paid a starting salary of £41,500. By sector, the highest-paying UK graduate employers in 2015 are again the investment banks and law firms (see Chart 3.2 ). Following increases in starting salaries at several leading law firms and the ‘Big Four’ accounting & professional services firms over the last two years, the median salary for new graduates joining the legal sector has now risen by £2,000 since 2013 and by £1,000 for trainee accountants. The median starting salary available to new graduates is set to rise in a total of six sectors this year (see Table 3.3 ). Despite the fact that graduates leaving English universities in 2015 are the first to have paid tuition fees of up to £9,000-a-year for their degrees, there is little evidence that this year’s graduate starting salaries have increased because of this – most employers that have stepped-up their graduate pay recently appear to have done so in order to compete with other employers, either in their sector or beyond. Chart 3.2 Industries or Business Sectors with the highest Graduate Salaries in 2015
£45,000
Investment banking
£40,000
Law
£36,500
Banking & finance
£32,500
Oil & energy
£31,500
Consulting
£30,300
Armed Forces
Accounting & professional services
£30,000
£30,000
IT & telecommunications
£30,000
Media
£40,000
£15,000
£20,000
£25,000
£30,000 £35,000
£45,000
Median starting salaries
Source - The Graduate Market in 2015
20
The Graduate Market in 2015
Chart 3.3 Graduate Starting Salaries at leading UK Employers in 2015
4%
More than £45,000
11%
£40,001-£45,000
16%
£35,001-£40,000
Median Salary - £30,000
9%
£30,001-£35,000
39%
£25,001-£30,000
18%
£20,001-£25,000
3%
£20,000 or less
0
10
20
40
50
30
Percentage of top graduate employers
Source - The Graduate Market in 2015
Table 3.4 Analysis of Graduate Salaries in 2015, by Industry or Business Sector
Range of graduate starting salaries on offer in 2015
Increase (decrease) in median salary
Median graduate starting salary for 2015
% change in median salary since 2014
Industry or Business Sector
£15,000-£42,500 £25,000-£30,300 £26,000-£50,000 £28,000-£45,000 £27,000-£32,000 £24,000-£31,000 £36,000-£50,000 £29,500-£34,700 £22,000-£40,500 £20,000-£45,000 £25,750-£40,000 £18,000-£41,500 £21,500-£42,000 £15,000-£50,000
£500 £300 £3,000
Accounting & professional services Armed Forces Banking & finance Consulting Consumer goods Engineering & industrial Investment banking IT & telecommunications Law Media
£30,000 £30,300 £36,500 £31,500 £29,000 £27,500 £45,000 £30,000 £40,000 £30,000 £32,500 £20,000 £26,000 £30,000
p 1.7% p 1.0% p 9.0%
NO CHANGE
NO CHANGE
NO CHANGE
NO CHANGE
£1,000
p 3.8%
NO CHANGE
NO CHANGE
£700 £500
p 2.4% p 1.3%
NO CHANGE
NO CHANGE
Oil & energy Public sector Retailing ALL SECTORS
NO CHANGE
NO CHANGE
(£2,000)
q 9.1%
NO CHANGE
NO CHANGE
£500
p 1.7%
Source - The Graduate Market in 2015
21
The Graduate Market in 2015
Summary • Graduate starting salaries at the UK’s leading graduate employers are expected to increase for the second year running in 2015, reaching a median of £30,000 for the first time. • More than a quarter of top graduate programmes will pay new recruits more than £35,000 when they start work and four organisations are offering salaries in excess of £45,000 to this year’s graduates. • The most generous salaries in 2015 are those on offer from investment banks (median of £45,000) , law firms (median of £40,000) , banking & finance firms (median of £36,500) and oil & energy companies (median of £32,500) . • The highest published graduate starting salaries for 2105 are at Aldi (£42,000) and the European Commission (£41,500) . • There is little evidence that graduate starting salaries are rising in reaction to the introduction of higher university tuition fees – most employers that have opted to increase their graduate pay in either 2014 or 2015 appear to have done so in order to compete effectively with other employers recruiting graduates.
22
The Graduate Market in 2015
Chapter 4 Internships & Work Placements
Recruiting Graduates through Work Experience Programmes During the last decade there has been a very noticeable change in the purpose and aims of work experience programmes. Ten years ago, the main reason that many major graduate employers offered university students work placements was simply to help individuals decide which career sector they were suited to and to enable students to experience the type of work that graduates did in a particular industry or business area. There were few direct links between these undergraduate work placements and the graduate recruitment process. Today, for the majority of employers who offer paid work experience places, such schemes have become an integral part of recruiting new graduates. Students applying for work placements in their first or second year at university are selected through a very similar recruitment process to that used to recruit graduates. This means that once a placement has been successfully completed, recruiters are able to offer work experience students a graduate position, often a full year before students are due to leave university and several months ahead of employers who only recruit graduates during their final year of study. Many employers also consider that recruiting candidates who have proven their abilities during a work placement to be a more reliable way of employing graduates. Up to a third of new graduates are now recruited directly through employers’ work experience programmes (see Table 2.7 on page 13) and employers in sectors such as law, oil & energy, and investment banking are expecting to recruit at least half their graduates this way in 2015. Correspondingly, the number of paid work experience placements available at Britain’s leading employers has increased very substantially over the last five years (see Chart 4.1 ).
Chart 4.1 How Work Placements for University Students Changed from 2011 to 2015
10.2%
2015
7.0%
2014
5.2%
2013
2.2%
2012
10.6%
2011
15
-10
-5
0
10
20
5
Percentage change in work placements on the previous year
Source - The Graduate Market in 2015
23
The Graduate Market in 2015
Availability of Work Experience in 2015 More than two-thirds of Britain’s top graduate employers are providing paid internships to penultimate year undergraduates during their summer vacations in 2015 (see Chart 4.2 ) and over half are hosting industrial placements – structured work experience that is organised as part of university degree courses (often described as ‘sandwich’ courses) and typically lasts between six and twelve months, giving students first-hand experience of technical, commercial or research roles. It is interesting to see that more than half of employers now offer work experience to first year students – either via paid internships and vacation placements, or through open days, short introductory courses or ‘taster’ experiences – a very noticeable increase on previous years. Together, the leading employers featured in the research are offering over 13,000 paid internships and work experience placements this year (see Table 4.4 ). This is the highest level ever recorded and an increase of 10% on the work placements provided during 2014. The number of work experience places available to students and recent graduates has now jumped by more than 40% since 2010, double the rate that graduate vacancies have risen over the same period. In 2015, the top employers are offering a median of 90 paid internships or work placements (see Chart 4.3 ) but fifteen organisations are providing more than 250 placements each. The leading investment banks have the most places available this year, with over 2,600 paid internships and work placements. It is striking that investment banking is one of just three sectors where the number of work experience places on offer from employers outstrips the number of permanent jobs available to graduates. Media companies, retailers and consulting firms have the lowest ratio of work placements to graduate jobs, making it harder for students interested in these areas to get relevant experience before they apply for graduate roles.
Chart 4.2 Type of Work Experience available at the UK’s Top Employers in 2015
Paid internships or vacation placements for penultimate year undergraduates
69%
Industrial placements as part of degree course, typically lasting 6-12 months
56%
Open days, introductory courses or taster experiences for first year undergraduates
39%
Paid internships or work placements for recent graduates
35%
Paid internships or vacation placements for first year undergraduates
29%
Pre-university placements for students during year-out
15%
0
20
40
80
100
60
Percentage of top graduate employers
Source - The Graduate Market in 2015
24
The Graduate Market in 2015
Graduate recruiters at the organisations featured in the research were asked about the value of work experience when it comes to assessing students’ applications for graduate roles. Almost half stated that it was either ‘not very likely’ or ‘not at all likely’ that a graduate who’d had no previous work experience with any employers would be successful during their selection process and be made a job offer, irrespective of their academic achievements.
Chart 4.3 Paid Work Experience Places available at the UK’s Top Employers in 2015
15%
250+ work experience places
20%
101-250 work experience places
18%
51-100 work experience places
Median - 90 work experience places
13%
26-50 work experience places
19%
1-25 work experience places
No formal work experience programmes during 2015
15%
0
10
20
40
50
30
Percentage of top graduate employers
Source - The Graduate Market in 2015
Table 4.4 Analysis of Paid Work Experience in 2014, by Industry or Business Sector
Total work experience places available
Total work experience places available
% change in places between 2014 & 2015 p 8.7% p 2.4% q 8.0% p 23.6% p 51.8% p 2.2% q 12.3% p 31.1% p 15.6% q 2.9% p 17.6% q 14.2% p 10.2%
Ratio of work experience places to graduate vacancies in 2015
Industry or Business Sector Accounting & professional services Banking & finance Consulting Consumer goods Engineering & industrial Investment banking IT & telecommunications Law Media
in 2015 2,005 1,290
in 2014 1,844 1,260
43:100 98:100 26:100 112:100 95:100 143:100 67:100 127:100 22:100 95:100 56:100 23:100 66:100
160 445
174 360
1,620 2,610
1,067 2,555 650 755 128 385 1,788 359 11,837
570 990 148 374 2,102 308 13,049
Oil & energy Public sector Retailing ALL SECTORS
Source - The Graduate Market in 2015
25
The Graduate Market in 2015
Summary • Over four-fifths of the UK’s leading graduate employers are offering paid work experience programmes for students and recent graduates during the 2014-2015 academic year – an unprecedented 13,049 places are available. • Two-thirds of employers provide paid vacation internships for penultimate year students and over half offer industrial placements for undergraduates (typically lasting 6-12 months as part of a university degree course). • Many more employers now also have work experience places for first year undergraduates – over a quarter of organisations offer paid internships and two-fifths of employers run introductory courses, open days and other taster experiences for first year students. • Nearly half the recruiters who took part in the research repeated their warnings from previous years – that graduates who have had no previous work experience at all are unlikely to be successful during the selection process and have little or no chance of receiving a job offer for their organisations’ graduate programmes.
26
The Graduate Market in 2015
Chapter 5
Graduate Recruitment in 2014-2015
Promoting Graduate Programmes The final part of the research examines how the UK’s leading recruiters have approached the 2014-2015 graduate recruitment round – from the promotions they used to publicise their graduate opportunities, the universities they targeted during their campus recruitment campaigns, to the volume and quality of applications received so far for their 2015 graduate vacancies. It is little surprise that the recession in 2008 and 2009 had a substantial impact on the resources subsequently available to graduate recruiters. The Graduate Market in 2010 report showed that recruitment budgets at almost half of the UK’s leading graduate employers had been cut compared with the previous recruitment season, and 18% of organisations described the decrease as ‘considerable’. Just thirteen employers increased their annual graduate recruitment budget that year (see Chart 5.1 ). The outlook seemed more encouraging during the 2010-2011 recruitment season and a third of top employers spent more on attracting and recruiting graduates. But during both the 2011-2012 and 2012-2013 graduate recruitment rounds, employers whose budgets had increased were outnumbered by the organisations where spending on recruitment had been cut year-on-year. In 2013-2014, more than a quarter of the leading employers increased their graduate recruitment spending and smaller numbers of organisations decreased their budgets, a pattern that has been repeated for the 2014-2015 graduate recruitment season.
Chart 5.1 Top Employers with increased annual Graduate Recruitment Budgets
24%
2015
27%
2014
14%
2013
21%
2012
33%
2011
13%
2010
0
10
20
40
50
30
Percentage of top graduate employers
Source - The Graduate Market in 2015
27
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42Made with FlippingBook flipbook maker