Graduates going for gold

As employers clamber for the best new recruits, debt-ridden graduates can afford to demand cash up-front in return for their skills. By BBC News Online's Jonathan Duffy.

The spiralling costs of student life will become a piffling irrelevance for a lucky handful of graduates this year.

Those signing up for a job with management consultants Andersen Consulting will be able to wipe the slate clean thanks to a generous "golden handshake".

The company is offering each new recruit in this year's graduate intake a £10,000 bonus, on top of the £28,000 starting salary.

Clothing allowances are an unusual enticement

Trainees will receive the bonus as a £6,000 lump sum, with £4,000 to be paid after one year.

But this is not just about bailing out hard-up graduates. The Andersen offer is designed to seize the initiative from big banks such as Goldman Sachs and JP Morgan, where starting salaries regularly top £30,000.

As thousands of teenagers prime themselves for the start of university life in October, employers are clambering over each other to sign up the most talented of this year's graduates.

Incomes Data Services says nearly a quarter of big companies offer a one-off cash incentive to lure new recruits.

High demand for hi-tech

Among those best placed to take advantage are those from the top universities and those with degrees in information technology and electrical engineering

The Association of Graduate Recruiters says just over half - 53% - of blue chip companies think they will be unable to fill all their vacancies this year.

Swim with the big fish: Norwich Union gives recruits a travel grant

"It's the supply and demand equation," says AGR's chief executive, Carl Gilleard.

"The demand has been getting fiercer and fiercer and now it doesn't even have international boundaries.

"Employers have always been keen to get ahead of the competition and this is particularly the case when recruiting the very top graduates, the people who are going to take a company forward."

We have been here before, in the late 1980s. But the difference today is that students are running up bigger debts, because of frozen grants and tuition fees.

Top brass

A recent report found graduates have an average debt of £4,500 pounds - that makes the offer of a cash sum all the more appealing.

While the boom in higher education over the past 10 years has meant more graduates, companies such as Andersen are concerned with the elite, says Nick Isles, of the Chartered Institute of Personnel and Development.

IT students have debt problems too

"A few years ago some banks were offering golden hellos in an attempt to get the best graduates over consultancies. Now consultancies are under real pressure to get the sort of calibre people that would give them a competitive advantage."

Added to this equation is the lure of young dotcoms, which like to tempt new workers with share options.

"They can be very exciting places to work. As very small concerns they're very dynamic, lack bureaucracy, have a freedom to put forward ideas and there is the chance to make a lot of money," says Mr Isles.

Schools' incentive

The IT industry has long been somewhere demand for skills has outstripped supply. But recently golden handshakes have also filtered into more unlikely areas, such as teaching.

The government claims to have upped the number of maths and science teachers by offering £5,000 lump sums, and it is set to do the same with modern language graduates.

In the private sector, not all firms are as brazen as Andersen Consulting. New recruits signing on the dotted line for Norwich Union have enjoyed the bonus of a £1,000 travel voucher.

Numbers game: Maths teachers get a £5,000 incentive

Other firms offer smart clothing grants and interest-free loans. Some reward existing employees for introducing new talent to the company.

But money, in whatever shape or form, is no substitute for good old fashioned training, says Sarah Pettigrew, of the graduate recruitment outfit, MetaMorphose International.

"Short-term financial pay-outs cannot be compared with the long-term benefits of good training and career development programmes," she says.

Carl Gilleard also sounds a cautionary note, warning top employers to cast a wider net for graduate trainees.

"If employers looked a little more flexibly, maybe overseas, or at more mature graduates, they might be surprised at the quality that's out there."