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Students face a "very slim" chance of a graduate level job this summer, according to a poll of 100 of the country's best known companies which shows that one in six graduate jobs have already been cut.
Most graduate traineeships are already taken and positions in the City alone have been reduced by 47% in the wake of the economic downturn. It is the first widespread acknowledgement from the country's leading employers that they are cutting back recruitment.
A Guardian investigation last week revealed widespread fears about the state of graduate jobs market. Some companies are restricting their recruitment to just five top universities, and universities career services are experiencing high demand from desperate graduates worried about their future.
Today's poll was conducted by High Fliers Research, an independent market research company that specialises in researching the graduate recruitment market. They polled 100 top recruiters including household names such as British Airways, HSBC, Marks and Spencer, Morgan Stanley and Rolls-Royce.
This year's intake of new graduates is to be cut by 17%, they reported. Reductions began last year, suggesting that graduates from the class of 2008 are also still struggling to get work.
Half of employers have now downgraded their graduate recruitment targets for 2009. Cuts have taken place in almost every employment sector but the situation is worst in the City. Only the public sector is increasing recruitment significantly – by 51% since 2007.
However, some graduates will still be smiling. Bargain supermarket Aldi will offer recruits of its graduate development programme a starting salary of £40,000 and an Audi A4 car this year. Aldi has seen sales rise as shoppers switch to low-cost food in the economic downturn. This has led the discount chain to expand the number of places on its graduate training scheme by 50% from 100 to 150 places. Law firm Freshfields Bruckhaus Deringer will give graduates a starting salary of £39,000.
A quarter of graduate recruitment programmes now pay more than £30,000 and one in six employers – mainly those from the legal and banking sectors – pay starting salaries of more than £35,000, the High Fliers Research found.
Law firms have raised trainee starting salaries by 29% in the last two years, from £29,000 in 2006 to £37,400. The average graduate salary is now £27,000 for 2009 – £1,500 more than last year's average for top employers of £25,500.
Consulting and energy firms offer at least £30,000 to their graduates, while the army, finance and consumer goods companies offer above the national average of £27,000.
Accountancy and professional services firms offer a lower starting salary at £26,000 on average for those starting this year.
Students at Manchester, Warwick and London universities were most targeted by leading employers last year. Other popular universities among firms include Cambridge, Oxford, Bristol, Durham and Nottingham universities.
The lowest salaries go to graduates working in retail, engineering or industrial companies and public sector employers, where the average starting salary is between £22,500 and £25,300 – £4,500 less than the average graduate salary.
A separate survey of final year students for the study revealed deep pessimism about their chances of employment. The poll of 1,000 students, conducted during December 2008, revealed that only 13% of finalists are confident they'll land the job they want after graduation and half think they'll have to take any job they're offered.
Martin Birchall, managing director of High Fliers Research, said: "There is understandable panic on campus that this is shaping up to be one of the worst years of the last two decades to be graduating from university... for those who have yet to begin job hunting, the chances of landing a last-minute place on a graduate programme now seem very slim."
Wes Streeting, president of the National Union of Students, said: "Students are incredibly conscious of the fact that there is a bleak future facing them. Our advice is to research earlier on for jobs and think creatively about the options open to them."
What can graduates expect?
• A quarter of top graduate programmes will now pay new recruits more than £30,000 when they start work.
• The most generous salaries are those on offer from investment banks, where the average is £38,000, law firms, where the average is £37,400, and consulting firms, where the average is £31,000.
• The lowest graduate pay for 2009 comes from retailers, where the average is £22,500, engineering and industrial companies, where the average is £24,000, and public sector employers, where the average is £25,300.
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