Recent data reveals that graduate starting salaries are soaring amidst the skills crisis that many industries are facing. It shows that the Class of 2022 are facing a 6 year high for starting salaries and there are more positions open to them.
The graduation picture
As the mortar boards are thrown in the air, this year’s graduates can celebrate more than their degree success. Despite graduates and younger workers being amongst the hardest hit through the lockdown years, there’s finally good news for them. Their opportunities are good and pay rates are vastly increasing.
In May, the data revealed a +59% year-on-year increase in the number of graduate positions being advertised. This is a result of employers needing to hire graduates to begin to plug the skills shortages. The pressure to secure the best graduates is reflected in salary increases too with advertised graduate salaries having risen 7% in the last year to a six year high of £26,076. Indeed, some employers are offering up to £70,000 for grads! Top graduate employers include Aldi, Lidl, KPMG, Sage and Galliford Try.
However, it’s not without difficulty for graduates. Despite the increased number of vacancies and the enticing salaries, for every graduate position, 36 graduates apply. It’s still enormously competitive.
The data went further to reveal which universities set graduates up for the highest salaries. As expected, it’s not an equal picture. Bayes Business School leads the way, then Oxford is next with graduates bringing in £47,618 five years after graduating, followed by Imperial and then Cambridge and UCL. Graduates from Aberystwyth, Bath Spa and Edge Hill make just over half of Oxford’s average.
Why are graduates vital to solving skills shortages?
The UK skills shortage is predicted to cost the UK £120 billion by 2030. However, the data frequently overlooks that this isn’t a uniform problem. While evidence suggests that most sectors of the economy are affected, it’s not an equal picture within the shortages. Indeed, by 2030, it’s believed that there will in fact be an oversupply of 8.1 million people with traditionally low or intermediate skills.
The skills crisis hits hard with a predicted shortfall amongst the highly skilled individuals needed to manage an economy characterised by skills such as artificial intelligence and machine learning. For example, analysis by PriceWaterhouseCoopers suggests that artificial intelligence is likely to increase demand for graduates by a sizeable 10%.
Not only are graduates more likely to enter the workforce with a raft of transferrable skills that can help with skills shortages in the short-term, they are ideal for being shaped into the workers of tomorrow. Graduates come with transferrable employability skills. Aspects of their skills toolkits, such as critical thinking, leadership and communication make them ideal candidates for the skills-based roles of the future.
Employers with an eye on their worsening skills gaps are focusing their attention on graduates as the solution to their skills shortages.
How to attract graduates, beyond salary
Obviously in a climate of rising graduate salaries, it’s important to offer a competitive salary in order to attract the best graduates for your roles, ensuring you recruit also for leadership potential. In an atmosphere of cost of living worries, rocketing house prices and graduate debt, graduate employers crucially need to realise the importance of salary as a driving factor for attracting the best talent.
However, attracting graduates goes considerably beyond salary alone. So, what else can you do as leaders to attract, recruit and retain the best graduate talent?
- Offer defined upskilling and reskilling
Graduates rarely hit the ground running – training is par for the course. However, many businesses are proving to be short-sighted with their upskilling and reskilling approach throughout the organisation. There’s still a culture of expecting this development to happen externally to the organisation and then you recruit it in later.
Unfortunately, this short-sighted approach is failing businesses, and leads to a loss of talent. Instead, employers need to attract and retain graduates by offering defined and tailored skills development programmes as part of their future strategy.
- Values & ethics
Graduates today care more that their career aligns with their personal values. With more information to hand, they want to choose employers that closely align with their personal ethics. Tight corporate social responsibility programmes, as well as employer values and messages, are easy to learn about and can attract or deter candidates.
Importantly, prioritise diversity and inclusion in meaningful ways. Not only is your graduate candidate pool diverse, your route to increased growth and profitability hinges on successful diversity and inclusion. This generation cares much more about diversity and inclusion, well beyond the lip service that many organisations have got away with to date.
- Be clear about progression
The best graduates have their eye on the future. They need to know that they aren’t being recruited simply for today. If you want to attract them and keep them then you need to showcase the career and lifestyle they can achieve, and when.
Highlight the opportunities available to graduates and how progression looks within the business. Give specifics about timeframes for promotions and salary increases.
- Consider the workplace lifestyle
From graduate housing schemes to social programmes, what does your business offer a graduate that makes it enticing to work for you? This isn’t just about boots on the ground, it’s about what these processes say about your company and the insight they provide. It’s these elements that coax graduates into staying with your organisation and offering the best of themselves. A salary and benefits package is unlikely to make you stand out from the crowd alone, you need to look at the workplace culture, social network and more to see if you are an attractive employer to graduates. Do they want to work for you?
Graduates are likely to form a central tenet to future-thinking employees tackling growing skills shortages. It’s important to acknowledge that salaries are rising, but success in recruiting and retaining the best candidates to be the executives that grow your business in the future depends on going beyond salary alone.
Keep an eye out for our next article which will be published in August. In the meantime, keep abreast of industry news and discussion on LinkedIn with our short burst videos/posts. You can sign up to the First Executive Newsletter on our website to keep on top of the latest news, trends and talent planning within UK Based Engineering & Manufacturing. www.firstexecutiverecruitment.co.uk. Follow us on LinkedIn, Twitter and Facebook