The Association of Graduate Recruiters has warned that employers are not queuing up to offer "golden hellos" to new graduates.
A survey of 264 of its members carried out last autumn by the Institute for Employment Studies found little sign that employers were considering such incentives.
Graduates' average starting salaries rose by 6.4 per cent between 1996 and 1997, markedly higher than the 4.7 per cent rise in full-time earnings for all adult employees. The starting salary of a typical 21-year-old graduate recruit with a second-class honours degree rose from Pounds 14,574 to Pounds 15,500, with about three-fifths of graduates starting on salaries between Pounds 14,000 and Pounds 17,000.
But AGR members predict that the rise in graduate pay will slow down in the current year. The average starting salary was expected to be 3.2 per cent higher at Pounds 16,000, with four-fifths of employers planning to offer pay deals ranging between Pounds 14,580 and Pounds 20,000.
The Institute for Employment Studies suggests the salary rise was fuelled by economic recovery. Many employers had recruitment problems despite an abundant supply of applicants "mainly because most of the major graduate recruiters 'fish' from the same pool of traditional graduates, from the most prestigious United Kingdom universities".
The AGR found no real difference between sectors except at the very top of the scale, where 18 per cent of non-industrial companies were offering Pounds 19,000 or more, compared with just 5.6 per cent of industrial companies.
A slight majority of employers paid salary differentials in 1997, compared with 34 per cent in 1996. These went most often to graduates with higher degrees, or those who had relevant work experience. The highest differentials, worth an average Pounds 2,000, went to graduates with PhDs.
l Fixed-term contracts are disappearing from the graduate recruitment market as vacancies continue to rise, according to Incomes Data Services Limited.
Less then 1 per cent of more than 100 employers surveyed had recruited graduates to fixed-term or temporary contracts in 1997, compared with more than 22 per cent in 1994. Engineering and information technology companies faced the worst recruitment problems, despite above average increases in starting salaries.
Graduate Salaries and Vacancies 1998 available from the Association of Graduate Recruiters, Sheraton House, Castle Park Cambridge CB 0AX, tel 01223 356720, fax 01223 324871.
Pay and Progression for Graduates, Research File 45, Management Pay Review February 1998, available from Incomes Data Services Ltd, 77 Bastwick Street, London EC1V 3TT, tel 0171 250 3434 fax 0171 608 0949.