Many students will have to wait until 2010 before their employment prospects begin to look rosy once more. A report published today shows that, perhaps unsurprisingly, there will be far fewer vacancies for graduates leaving university this summer, but many employers are optimistic that things will get better next year.

As recently as September 2008, employers were expecting to hire near-record numbers of graduates in 2009, and yet recruitment targets at Britain’s top employers have been cut by more than a sixth in the past four months. The Graduate Market in 2009 report, based on research with organisations featured in The Times Top 100 Graduate Employers, shows that, of the 40,000 graduate jobs advertised in the past six months, almost 7,000 vacancies have been dropped or left unfilled.

There is good news, however: 3,392 planned job vacancies for 2009 graduates have been cut, but starting salaries, often agreed before the economic meltdown began, are set to rise by 5.9 per cent, taking average starting salaries for graduates to £27,000.

The dearth of jobs might be bad news for job-hunting graduates, but recruiters are upbeat because they are receiving a lot more applications, often much earlier, than in previous years as final-year students hurry to secure jobs. One recruitment manager for a well-known consulting firm said: “We’ve filled all our graduate vacancies for 2009 and have already begun hiring for roles starting in 2010.”

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This suggests that next year’s students will need to move very quickly indeed, despite a quarter of the top employers saying that they plan to increase the number of graduate vacancies next year – 13 per cent of employers expect recruitment to be cut further in 2010.

Virtually every big employment sector has been hit by the cuts, but the biggest job losses are in investment banking, where entry-level vacancies are almost 40 per cent lower than in 2007 and nearly 3,500 new posts have been withdrawn during the past year. Nevertheless, the sector still promises big money, with graduates offered an average starting salary of £38,000 – 7.8 per cent more than last year.

Accounting and professional services firms, which are among Britain’s biggest recruiters of graduates, cut their training places by 8 per cent in 2008 and are expecting a drop of 9 per cent this year. Despite this, the Big Four firms are offering more than 3,200 posts for graduates. Average salaries in the sector are £26,000.

The retail sector is not all doom and gloom for graduates. Employers have downgraded their recruitment targets by a fifth this year, but several retailers – including Aldi and J Sainsbury – have upped their recruitment for 2009. Despite Aldi’s £40,000 starting salary the sector is on average a pretty low payer, at £22,500.

Across the main industrial employers in engineering, IT, telecoms, chemical and pharmaceuticals and oil and energy there are 500 fewer vacancies on offer this year and a similar number of jobs were cut from last year’s intake. The best-paid in this group would be those going into oil and gas, where they can expect to be paid a starting salary of £30,000.

Only two employment areas expect to take on more graduates in 2009. The public sector, which includes the Civil Service Fast Stream, the NHS Management Training Scheme and Teach First, is set to hire 51 per cent more graduates in 2009 than in 2007. However, despite relatively low average starting salaries (£25,300), the public sector is reporting vastly increased applicant levels, with some graduate schemes closing early. Likewise, the Armed Forces plan to take on 17 per cent more officer recruits for the Army, Royal Navy and RAF, with average starting salaries of £29,000.

Despite the jobs cuts, none of the big employers has yet to suggest cancelling its graduate programmes. Six years ago, in the downturn of 2002 and 2003, several well-known recruiters, including Ford, Marks & Spencer and British Airways, pulled out of recruitment or withdrew offers to graduates in an effort to reduce costs.

As one senior graduate recruiter explained: “Our graduate recruitment in 2009 isn’t about filling vacancies for next September – it’s about finding the right candidates who can begin their training in September. And then in two or three years’ time, in 2011 or 2012, [they] will be ready for their first management position. Hopefully, by then, our business will be crying out for the next generation of talented, skilled managers.”

- Martin Birchall is author of The Graduate Market in 2009 and managing director of High Fliers Research. A free copy of the report is available to download from www.highfliers.co.uk

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