Graduate pay packets have climbed at the highest rate in decades, despite employers feeling the inflationary pinch.
According to a report from the Institute of Student Employers (ISE), graduate salaries were up seven per cent on average in the past year— the sharpest rise in 20 years.
On average, graduate salaries have risen two per cent per year since 2002, and the last time pay spiked was just before the financial crash of 2007/8 when they increased by five per cent in 2006.
The survey found that the median starting salary for graduates in 2021 was £30,500 while the median starting salary for school and college leavers was £19,489.
The highest salary increases were seen in the digital sector and the lowest in the public sector, which remained relatively stagnant.
Commenting on the findings, ISE chief executive Stephen Isherwood said: “Higher salaries are a clear indication of a healthy recruitment market. We have surpassed pre-pandemic levels of hiring and it’s competitive out there.
High salaries are one way to win the war for talent, but we’re also seeing additional benefits being offered such as support with wellbeing and flexible working patterns.”
He added that the true test for the graduate labour market would come in the autumn, where the impact of intense economic headwinds would come into fruition.
The ongoing battle for talent has seen the City’s major firms offer huge salaries to new staff in their efforts to get grads on board: JP Morgan offer fresh graduate salaries of £70,000 a year, while its rival Barclays offer £50,000.
Competition from the US has also seen London’s major law firms offer increasingly high salaries, with graduate trainees in Davis Polk’s London office earning £60,000 and grads in Freshfields earning £50,000 a year.
On top of this, recent data from Adzuna found that graduate job vacancies are up 59 per cent compared to May last year.
It found that graduate employers posted 14,690 job adverts in May this year compared to 9,265 in May 2021.