GRADUATE SALARIES
Pay, benefits and bonuses top career priorities for graduates
Financial concerns are dominating graduates’ career choices in the face of economic uncertainty, inflationary pressures, loan repayments and unaffordable house prices. Yet there is hope for this year’s graduates as average graduate level salaries may be considerably higher than they expect, according to research from Hay Group.
As part of its research, Hay Group compared graduate level salaries from its PayNet remuneration database with 400 UK graduates’ expectations for six key company functions: HR, finance, IT, sales and marketing, legal and engineering. Salary data was based on 10,000 graduate level wages in 600 mid-sized and large private sector organisations in the UK.
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Show me the money
When it comes to career choice, perhaps contrary to conventional wisdom, salary was the main factor for new professionals, Hay Group found.
The vast majority (93%) of this year’s graduates described base pay as an important or very important factor in their career choice.
The top three criteria after salary were also financial: benefits were cited by 51% of this year’s graduates, followed by future earnings outlook (45%) and bonus potential (37%).
Hay Group says: “Assumptions that the financial crisis would promote a less monetary attitude to the workplace look wide of the mark. Idealistic criteria are very low on graduates’ priority list when choosing a career.”
Passion for the job was an important factor for just 16%, as are the values and beliefs of an organisation.
The ability to make a difference was the least important consideration of all, registering in just 4% of graduates’ top three criteria.
Reality cheque
Hay Group found wide discrepancies between what graduates expected to earn and graduate level salaries in the most common professional functions of mid-to-large private sector organisations – the UK’s main graduate employers.
On average, the Class of 2011 underestimated the starting wage they can expect across the six functions by almost £7,500.
Graduates put a starting salary in the finance division at just £18,880, but could actually expect over £7,100 more.
In reality, a graduate level employee could earn an average of £26,000 in the finance function of a mid-to-large organisation.
In HR, graduates envisaged a starting salary under £19,700, but could actually earn almost £26,300 on average – a difference of around £6,500.
Christopher Smith, reward information consultant at Hay Group, said: “Confronted by an uncertain outlook, graduates have lowered their remuneration expectations well below what they can expect to earn in the main functions of the UK’s largest graduate employers.”
A final word
“The economic climate is clearly influencing graduates’ career decisions. Acutely aware of the difficult labour market and rising living costs, they are looking for a career path that makes financial sense first and foremost. Idealistic factors barely come into consideration.” - Christopher Smith, reward information consultant at Hay Group.
Want to know more?
Hay Group Reward Information Services asked 400 UK graduates about their career choices and starting salary with expectations in July 2011 for six key company functions: HR, finance, IT, sales & marketing, legal and engineering. Hay Group compared this with salary data from PayNet for the same functions in medium and large UK organisations.
Salary data is based on over 10,000 graduate level wages in over 600 mid-sized and large private sector organisations in the UK.
Availability: To find out more about the study tel: +44 (0) 207 856 7200 or email: GB_reward_information@haygroup.com.
Hay Group is a “global management consulting firm that works with leaders to transform strategy into reality". It says “We develop talent, organise people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organisations realise their potential.” Hay Group has over 2,600 employees working in 85 offices in 47 countries. For more details visit www.haygroup.com/uk.