Graduates turn degrees into dollars

Graduate salaries are rising at a far higher rate than the cost of living, and the number of vacancies has grown 11.2 per cent in the past year, making it the hottest market for young talent in at least a decade.

Graduate investment bankers, on average, will be paid $73,000 in 2008, $13,000 more than those in the next best-paid jobs, in the legal profession, and up from $71,400 last year.

Most aspire to work for Macquarie Group, followed by the United Nations and the Department of Foreign Affairs and Trade - despite the last of these offering starting salaries significantly lower than many professions, at $50,524.

A survey to be released today by the Australian Association of Graduate Employers shows that the favourable employment conditions for university leavers are largely driven by the resources boom and the national skills shortages.
By organisation type, mining businesses are offering the biggest salaries, of $70,000, followed by oil companies at $68,000 and the construction industry at $65,500.

"From what I can see there has been no better time to be a graduate," said Tim Wise, research director at High Fliers, which compiled the AAGE survey.

"There are more vacancies and there are better salaries than there have ever been because salaries aren't just keeping up with inflation, they're outstripping it quite drastically."

Labour shortages have forced accounting firms to lift salaries by 13.6 per cent for graduates joining the workforce next year, and energy, water and utility organisations have boosted salaries by 12.3 per cent.

The median starting salary for graduates is $48,000, 25 per cent higher than it was six years ago. About 8000 positions are up for grabs in 180 organisations that participated in the survey.

But the outlook is not as bright for all graduates. Those in manufacturing and electronic engineering can expect starting salaries to drop by 5.7 per cent and 7.1 per cent respectively next year. And those looking to work for state government agencies, telecommunications companies, and transport or logistics firms shouldn't expect any improvement on 2007 salaries. Those in marketing will be paid $3000 below the average graduate salary. Federal government departments and accounting companies are also likely to pay below-average salaries, despite these two groups accounting for almost 40 per cent of the vacancies on offer.

But money is not the biggest drawcard for graduate recruits. Most are attracted to the overall reputation of an organisation, followed by training and development opportunities on offer, and long-term career prospects.

Just 4 per cent of 1518 respondents said salary was the most important factor when deciding where to work.

Macquarie Group wouldn't say how much it paid fledgling investment bankers, but said: "The feedback we get from graduates is that they enjoy working at Macquarie because they are given challenging work from day one, because they see the Macquarie environment as very innovative and because of our global footprint, which means the opportunity to work offshore with Macquarie is very real."

The bank will take on 400 graduates in 2008 - its largest intake to date.

DFAT confirmed that competition was intense, with 1955 applicants vying for 29 places for 2008. Graduates are usually posted overseas after two or three years in Canberra.

Feedback from recent graduates showed they wanted to work for DFAT because of challenging work, opportunities to change jobs regularly and opportunities to travel, represent Australia overseas and learn languages.

Graduate salaries will increase 4 per cent, in line with all DFAT staff, and as prescribed in the collective agreement.

Australia and New Zealand Banking Group is considered by graduates as the employer with the best opportunities. The bank received more than 7000 applications for 310 graduate positions. Starting salaries will be about 5 per cent higher next year at $52,000. However, competition with the investment banks will push salaries in this band higher still.

"As more companies are taking on more graduates in a very tight market, we're going to have to work extremely hard to attract the best-quality graduates," ANZ's graduate development manager, Lauren Jarrott, said.
One strategy is to give graduates more opportunities to move "more laterally" around the bank.

BHP Billiton was ranked as the fourth top aspirational employer of choice by graduates. The mining giant receives about 5000 applications each year. Just 150 places are available for 2008. It would not reveal what graduates were paid, but said the skills shortage was one of the biggest challenges in terms of graduate recruitment.

"Our demand for graduates has grown and continues to grow while the supply in some disciplines has declined," a spokesperson said. "Another key challenge for us is that the majority of roles we offer are located at our operations, which are generally located in remote areas."

KPMG is preparing for its biggest graduate intake ever in 2008 - a total of 550 positions, up 10 per cent. PricewaterhouseCoopers has received 10 times more applications than it had places to fill for 2008.

The favourable conditions for graduates translate into the worst time for many employers. As competition for talent intensifies, many are finding it difficult to fill vacancies and 60 per cent of respondents said they had not filled all their 2008 vacancies as late as August and September this year.

Published: 16 November 2007