The Truth: Average Graduate Starting Salaries
26 July, 2017
What is going on in the world of graduates and interns? We take a look at all things to do with money, money, money! Graduate starting salaries, student loans and tuition fees.
We’ve collated a hell of a lot of research and laid it all out on the table. While it’s true that the hiring of graduates in the UK is picking up, a lot still needs to be answered to with respect to the average starting salary, especially after the 2011 university fee hike. Hello raging mountains of student debt… So what is the effect on graduates' finances?
Graduate starting salaries, of course, will vary from sector to sector. If you’re a business looking to hire, or a candidate browsing the market, you’ll have an idea of the realistic average for your industry. The first pay cheque for a marketer could look very different from that of a corporate analyst. But regardless of this, the many have been very happy to share the most recent calculations that emerged from the 2017 High Fliers Report which states “graduate starting salaries are reaching a median of £30k.”
That’s fantastic news. But unfortunately a representation of a very small segment of UK graduates. Let us explain.
The high fliers report, though a stellar piece of industry research, only studies the UK’s one hundred best-known and most successful employers. To put this in perspective, in 2014 they collectively offered 18,129 vacancies. And in 2014 there were nearly 378,675 graduates entering the employment market. (Data from the HESA.)
Therefore only 5% of graduates that year actually landed one of these positions.
If we widen our search, the annual survey of the Association of Graduate Recruiters suggested that average starting salaries were at £28k. Other bodies and recruitment companies have released statistics as low as £23k for an average salary.
And we looked into it at Instant Impact. Our figures show that in our placements of graduates into Startups and SMEs, the average starting salary is currently at £25k. This is a great representation of much of the reality… as most graduates will indeed work for a Startup or SME!
It’s a difficult position to be in as a post-2015 graduate. The £27k accumulation of tuition fees has left many feeling entitled to better options and opportunity once they left university. But since the announcement of the fee hike in 2011, starting salaries having only increased across the board by £1k in that time! Not quite the pot at the end of the rainbow.
It isn’t idyllic either that even if you are in the lucky 5% to land a top job, you are more than likely to be frozen on that salary for 3 years.
Is there any good news?
Well yes actually. Remember what we said about the majority of grads working for SMEs? They inspire GROWTH. That is a key word in all of this. While they initially may not be able to offer the numbers desired, graduates have an incredible chance to grow into their position and earn the salary they deserve.
So if you’re a graduate, it might be best to forget the large corporations, structure, hierarchy and bureaucracy. Work hard and you shall be rewarded (and then overtake your peers on grad schemes.)
If you’re a small business recognise the importance of support around financial remuneration. This does not necessarily mean pay rises, but simply demonstrating that you understand the crippling debt and you’re available for advice. For Gen-Y, money is no longer the key driver behind motivation. Wellbeing and job satisfaction are equally as important. But these guys have a slightly scary amount of debt and like anyone, want to feel secure.
If you're a business, get in touch to find out more about our full graduate and intern recruitment service.