Employers struggling to fill vacancies

Organisations which employ a lot of new graduates expect a continued growth in vacancies this year - but half are not confident of filling them.

The Association of Graduate Recruiters foresees a rise in graduate positions of 15%, compared with 5% last year. Its winter survey indicates an average starting salary of £23,000, up 2.3% - the smallest rise for five years. The government said the survey vindicated its policy of having half of young people in higher education.

The survey covers 222 firms which are among the UK's biggest graduate recruiters in both the public and private sectors. Public sector salaries are expected to grow by the most: 9.5%. Its suggestion of a bumper year for graduates is in line with other recent reports. Higher Education Minister Bill Rammell said: "This supports projections suggesting that 50% of new workers needed by 2012 will be in jobs most likely to employ graduates.

"With other countries also aiming to increase the proportion of their population educated to university level, we must keep apace if we are to remain competitive."

The survey report said that, despite increased numbers of graduates in the UK, a significant number of employers were still experiencing some difficulty in filling all their vacancies. Reasons cited for this included "Not enough applicants with the right skills or qualifications" and "graduates' perception of the industry sector".

Mr Rammell said the government understood this. "That is why we have placed much emphasis on the growth of foundation degrees, because they are vocational higher education qualifications designed with employers."

He wanted more UK business leaders to "come on board".

The association's chief executive, Carl Gilleard, said: "Employers are likely to be looking to graduates who can demonstrate softer skills such as team-working, cultural awareness, leadership and communication skills, as well as academic achievement."

Even so, extra qualifications are expected to attract even greater salary premiums this year, particularly PhDs or non-MBA Masters degrees. Some one in four vacancies will be in accountancy and professional services, either in accounting firms or financial institutions specifically, or within organisations in other sectors. Law and investment banking are also forecast to be recruiting large numbers of graduates.

The greatest percentage increases in vacancies are expected in manufacturing, engineering, sales, research and development, information technology and investment banking. More than a third of employers expect to pay a "golden hello" - the median bonus being £2,000.