Rising inflation means UK graduates have taken a real-terms pay cut this year, a new survey has found.
The Institute of Student Employers (ISE) said it was “concerned” by the findings and warned students that the economic situation might worsen further.
The ISE’s annual Student Recruitment Survey of 170 large UK student employers in August and September found that the median graduate salary rose to £30,921 this year, up slightly – by 1.4 per cent – from £30,500 last year.
However, with inflation at 8.6 per cent, it means graduates have effectively taken a 7.3 per cent pay cut from last year.
Graduate salaries varied between a minimum of £19,500 in the charity and public sector, and a maximum of £57,500 for those in law.
“We are concerned that due to the current inflation rates in the UK, graduates are experiencing a real wage decrease,” said Stephen Isherwood, chief executive of the ISE.
“Employers tend to prioritise existing workers over new hires when they review salaries, but graduates entering the workplace often face higher accommodation and travel costs when they start employment.”
The survey also found that graduate vacancies, which rose by 17 per cent in 2021-22, will increase by just 2 per cent over the next year – with employers responding to the survey indicating that they expected to create around 20,000 new roles.
Some employers told the ISE that they were undergoing a hiring freeze, while the majority who were reducing recruitment said it was because of the threat of a recession.
Despite this, the average number of applications per vacancy fell from 91 to 62 over the last year – which the ISE said suggests graduates are being more selective in their choices.
Meanwhile, more graduates than ever (12 per cent) reneged on offers last year – with the highest rates among health and pharmaceutical companies.
Mr Isherwood said graduate recruiters are “cautious” in the current economic climate, with data suggesting hiring numbers will drop.
“But the majority of graduate programmes are now open for applications and employers are still recruiting more graduates than they did pre-pandemic,” he said.
“Students should remain positive but, they need to apply early. Don’t hang around, things may get tougher as we move through the year.”
A recent report from the graduate careers specialist Bright Network found that salary expectations for graduates have risen by 11 per cent during the cost-of-living crisis – surpassing £30,000 for the first time.
Meanwhile, new figures from the Higher Education Statistics Agency (Hesa) found that graduates who highly rated the “design and nature of their work” are more likely to be happy in their daily lives.
Researchers asked 215,000 graduates to assess how meaningful their job is, if it uses the skills they learned in education and if it fits with their future plans.
It found a correlation between a positive assessment of this and a range of well-being measures.
