First published by Consultancy UK, 12th September 2017
The latest graduate intake of the UK’s top 100 employers will earn a median of £30,000 annually. Unsurprisingly, investment banking recruits are set to earn the most among graduate workers, while consulting hires will earn £31,500 on average, slightly above the group median.
High Fliers Research, a graduate market analysis firm established in 1994, has released its latest research into graduate vacancies for the top 100 UK employers. The research is based on more than 18,000 respondents from 30 of the UK’s top universities – who were asked to identify ‘Which employer offers the best opportunities for graduates’, with the 100 most popular firms named as the Top 100 Employers for graduates in the UK.
Graduates recruited to fill this year’s vacancies among the UK’s top 100 employers, will see their respective pay packets increase slightly, 2% – 3%, in line with wider market trends for cost-of-living increase – with inflation running at around 2.9% for the year.
Graduate vacancy median starting salaries actually jumped considerably during the years following the financial crisis, as firms looked to engage new talent in the hope of diversifying their talent to deal with the harsher economic climate, before hitting a wall in 2010 at £29,000. In 2014 growth saw median graduate pay increase to £29,500, before growing again to £30,000 in 2015, with pay increasing in smaller steps in the years leading up to 2017.
However, some sectors are more attractive than others in terms of remuneration. Investment banking, for instance, pays a median starting salary of £47,000, while new law students earn a median £43,000. New consultants come in at a slightly above average £31,500, around £1,000 less than banking & finance starters. The reset of the segments considered have median starting salaries of £30,000.
Starting salaries vary considerably, with seven of the surveyed companies paying trainee graduates more than £45,000, while eight pay between £40,001 and £45,000. The bracket between £30,000 and £40,000 stood at 24%, while the biggest segment, was those earning between £25,001 and £30,000, encompassing 42% of total graduates. Around 4% of graduate vacancies offer remunerations of less than £20,000.
The study also looked at the differences between the top and bottom starting salaries offered for graduate vacancies across various sectors, as well as changes since last year. The research noted that most sectors saw no change in median salary since last year.
Accounting & professional services noted the lowest possible starting salary at £13,500, although its median (£30,000) was closer to its maximum salary of £33,000. Investment banking roles started out at £38,000, while the top starting position in media came in at £50,000. The consulting industry was noted as the segment with the highest starting offer, at £55,000.
In June, 25 advisory and consulting firms were placed among UK’s top employers for graduates, according to the Guardian UK 300 rankings. Consulting firms, PwC, Deloitte, KPMG, IBM and EY topped the professional services sub-category, followed by the three large American origin strategy consultancies among others.
Commenting on the research, Managing director of High Fliers Research, Martin Birchall said, “With a record 400,000 new graduates due to leave university this summer, it’s very welcome news that Britain’s top employers have increased the number of graduate vacancies on offer for the ‘Class of 2017’, despite all the uncertainty caused by last year’s Brexit vote. It’s clear from our latest research that the country’s best-known employers are continuing to invest heavily in their future workforce by recruiting more graduates than ever for their organisations.”
Earlier in 2017, a report by Hay Group, a division of Korn Ferry, found that, despite a slight rise in average graduate salaries, at a salary rate of £26,268, the UK has dropped out of the ranking’s top five nations for best paid university graduates. The United States and Germany, meanwhile, topped the rankings at $49,785 and $49,635 per year respectively. Australia, the Netherlands and France also out-performed the UK, with Russia hosting the lowest wages for graduates among the 15 nations surveyed.
In the UK, inflation rose to a four-year high in May 2017, as the steep fall in the Pound’s value since the Brexit vote took hold of the economy, and intensified the squeeze on household budgets. The increasing cost of leisure products including foreign holidays also helped push up inflation to 2.9%, above the expectation of economists that it would remain at the 2.7% rate seen in April. The year-on-year rise in the consumer prices index (CPI) means prices continue to go up faster than wages for many workers, further denting living standards. Hay Group’s research, therefore, suggested that wages of entry level jobs for graduates have increased year on year, well below the rate of inflation, actually making for a real-terms decrease.