University grads have had a seven per cent pay cut from last year

Graduates have effectively had a 7.3 per cent pay cut from last year, a new report has found.

This year, the typical (median) graduate salary is £30,921 right now – up 1.4 per cent from £30,500 last year, the Institute of Student Employers reports. But with inflation at 8.6 per cent, this is effectively over a seven per cent pay cut in terms of real wages.

With worrying about the effects of a recession, economic pressures are apparently causing graduate employers to be more cautious about recruiting and even reducing the amount of people they hire.

Graduate vacancies will increase by just two per cent over the next year, ISE’s annual Student Recruitment Survey reports – far less than the 17 per cent growth seen last year, and nine per cent the year before that. Some employers said they are experiencing a hiring freeze, or said they are currently unsure of recruitment levels.

However, around one in 10 grad vacancies are unfilled every year, and there are staff shortages in some sectors. There is also an all-time high of graduates reneging, or going back on, job offers.

Stephen Isherwood, Chief Executive at the ISE said: “Graduate recruiters are cautious in the current economic climate. Many face talent shortages, but our historical data shows that when the economy tightens hiring numbers decline.

“But the majority of graduate programmes are now open for applications and employers are still recruiting more graduates than they did pre-pandemic. Students should remain positive but, they need to apply early. Don’t hang around, things may get tougher as we move through the year.

“We are concerned that due to the current inflation rates in the UK, graduates are experiencing a real wage decrease. Employers tend to prioritise existing workers over new hires when they review salaries, but graduates entering the work place often face higher accommodation and travel costs when they start employment.”

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