Graduate job vacancies with civils consultants, contractors and clients have plummeted by more than 40% this year, figures from the Association of Graduate Recruiters have revealed.
The 40.6% fall in graduate vacancies makes the construction sector the second worst, with only IT seeing a bigger drop.
Overall, graduate vacancies are down 20.6% on 2008 levels, with only the energy, water and utilities sector reporting an increase in vacancies. It shows an increase of 7.1%. Few employers are expecting things to get better next year, with 53.4% predicting levels to remain the same.
AGR’s figures are based on a survey of 226 blue chip employers, between them employing 12,650 graduate recruits in 2009. Civils firms surveyed include Amey, Arup, Atkins, Balfour Beatty, BAM Nuttall, Bechtel, Costain, Gifford, Jacobs, Laing O’Rourke, Mott MacDonald, Mouchel, Network Rail, Skanska, Transport for London and Tube Lines.
Over the next year we will be focussing all our efforts on discouraging short-termism and ensuring employers do not back away from their graduate schemes.
Carl Gilleard, AGR chief executive
“The IT, construction and engineering sectors are reeling from vacancy declines in excess of 40%,” said the report. “Only one sector - energy, water and utlities, a relatively small recruiter of graduates - has increases in vacancies. All others have seen recruitment levels shrinking, often dramatically.”
The AGR survey also found that there are now 34 applications for every graduate job in civil engineering and construction. More than two thirds of employers overall are setting a 2.1 degree as a minimum standard.
The median starting salary for a civil engineering graduate remains unchanged at £24,000. The overall average graduate salary remains frozen at £25,000.
“I wish we had better news to announce today but we cannot hide from the fact that dramatic vacancy cuts will make the job search very tough for graduates both this year and probably next year too,” said AGR chief executive Carll Gilleard.
“However, It is important to look at this in context and to point out that very few employers have abandoned their graduate recruitment programmes altogether and most are likely to reinstate recruitment levels at the first sign of an upturn in the economy.
“I would also like to reassure graduates that though things will be harder, their degree is a valuable asset and that there are still opportunities out there for those who do their research and focus on quality rather than quantity of applications. It is heartening to see that the class of 2009 appears to be equal to this challenge with many of our members reporting a marked improvement in the quality of graduate applications this year.
“The AGR continues to campaign on behalf of graduate recruitment in the UK and over the next year we will be focussing all our efforts on discouraging short-termism and ensuring employers do not back away from their graduate schemes”.
The AGR Graduate Recruitment Survey 2009 in summary
A majority of employers (62.7%) are offering fewer vacancies than last year with the average number of vacancies now just 20 per employer, down from 35 in 2008. The drop of 24.9% in vacancies in today’s edition of the AGR survey has far outstripped the prediction of 5.4% made by employers in the winter edition of the AGR’s survey in February.
In terms of sectors, accountancy and professional services has increased its share of vacancies while engineering and industrial companies has tumbled to 7.5% from the 10.1% predicted in February. IT, engineering, construction and investment banking have all seen dramatic job cuts of more than 40%, while law has experienced reductions of 19.1%. Even the public sector has reported a decline of 8.1%. Only one sector, energy, water and utilities, a relatively small recruiter of graduates, has seen a growth in the number of vacancies (7.1%).
Employers are remaining cautious in terms of vacancy predictions for 2010 with 53.4% expecting little change. While 22% are cautiously optimistic, 11% think there may be worse still to come. However, only 3.4% expect another severe cut in vacancies.
The majority of employers (52%) are still offering more than 10 paid internships each year, mostly over the summer vacation, although they report that fewer internships are being converted into permanent jobs.
While February’s vacancy cut predictions proved to be far short of the mark, employers were spot on in terms of salary forecasts. The average graduate starting salary has frozen for the first time in the history of the AGR’s survey at £25,000. A majority of employers (57.7%) are offering graduate employees salaries of between £22,001 and £27,000 this year.
The three top sectors in terms of average starting salaries are law firms (£37,000 — a 1% cut on last year), investment banks or fund managers (£36,000), and consulting or business services, which is the only sector to buck the static trend with a 21.6% increase on last year to £31,000.
London, as always, is leading the way with an average starting salary of £29,000. Wales and Northern Ireland are at the bottom of the salary table at £16,000 and £13,000 respectively. In terms of job types, investment banking and legal work share the top spot while accountancy, previously sixth in the table, has tumbled to second from last place.
The overall freeze on starting salaries looks set to continue in 2010 with almost half (48.5%) of employers expecting no change and 25.7% only planning to offer a cost-of-living rise. One fifth of employers felt unable to make a prediction because of the current economic instability.
Applications and selection criteria
Dramatic cuts in vacancy levels have unsuprisingly translated into much greater competition this year with nearly half of employers receiving more than 50 applications for every graduate job.
Competition is particularly fierce in investment banking, banking or financial services, retail and engineering and the industrial sector, all of which received more than 50 applications per job. One fifth of employers received between 501 and 1,000 applications this year and 25% had to work their way through 1,001 to 2,500 applications.
In terms of process, more employers than ever are insisting on online applications only — the figure has risen from 74.3% in 2008 to 81.1% this year. Single rather than rolling start dates remain the preferred option for most employers and September the most common starting month.
There is evidence to suggest that intense competition is causing erratic graduate behaviour in some cases with candidates applying for jobs they would not normally have considered or are not passionate about.
Perhaps the most notable aspect of this year’s applications has been their improved quality. It seems this year’s graduates are taking particular care over their applications in the face of increased competition with 40% of employers reporting higher standards this year.
Retention, which has previously been a major challenge for employers of graduates, has predictably been less of an issue this year as flighty Generation Y has its wings clipped by the recession. For graduates taken on one year ago retention of between 91% and 100% was achieved by 71% of organisations. The survey also examines retention rates for graduates recruited three and five years ago as well as the reasons most commonly cited for graduates leaving an organisation.