Firms have stepped up salaries for young people as competition for jobs increases, new research suggests.
The typical pay for graduates rose to £30,500 in 2021, up by £833, while school leavers saw a jump of £1,039, according to the Institute of Student of Employers (ISE).
Its boss Stephen Isherwood said that “employers are looking for ways to compete for talent in a tough market”.
The number of applicants per job also reached a record high, it found.
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In its survey, companies reported an average of 91 applications per graduate vacancy – a 17% increase on last year. It also marks the highest number since the ISE started collecting data in 1999.
The 2021 cohort of graduates have been competing for jobs against last year’s cohort, who graduated in the year the pandemic began.
‘I’ve applied for 100 jobs’
Chaeyld Casimir-Thomas graduated with a First Class degree in law last year but has struggled to get work in the legal industry. She is currently working for a recruitment agency.
“Within the last two months I have applied for about a hundred jobs, both within and outside of the [legal profession],” she says.
“It hasn’t met my expectations of what I thought graduate life would be like.”
Chaeyld thought she would have a range of opportunities, “even though law is a very difficult sector to get into”, considering her qualifications.
“I am hopeful for the future,” she adds, “but it has been difficult for me, and a couple of friends who I know who have graduated as well.”
Despite that, 177 respondents, each large employers of students and young people, suggested that the jobs market had still not recovered to pre-pandemic levels.
Mr Isherwood pointed out that after the financial crisis in 2008, graduate salaries stagnated for a couple of years.
The increase in salaries suggests that costs for businesses have also gone up, in “another sign that businesses need to invest more to hire graduates”, he said.
“Market forces will determine how sustainable this is. If the economic recovery continues at pace then the market for young people will become increasingly competitive and employers will need to invest more to recruit the talent they need,” he added.
The most popular roles identified in the study were in retail and tourism, which received 182 applications per vacancy.
In the wake of the pandemic, competition for jobs in the health and pharmaceutical industry was also high with 155 people applying for each job. Nearly 120 graduates applied for a financial and professional services role, according to the survey.
The bosses surveyed in September predicted that growth across all different sectors would carry on into 2022.
They also expected that graduate jobs and internships would exceed pre-pandemic levels over the next year.