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Last Updated: Tuesday, 7 February 2006, 00:00 GMT
Graduate demand outstrips skills
office scene
Accountancy skills are much in demand
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.

But over half of the employers polled said many graduates lacked skills.

The AGR said as well as academic achievement employers want good team-workers who can communicate properly and have cultural awareness.

Its winter survey indicates an average starting salary of 23,000, up 2.3% - the smallest rise for five years.


The government said the report, which covers 222 firms which are among the UK's biggest graduate recruiters in both the public and private sectors, vindicated its policy of having half of young people in higher education.

We must keep apace if we are to remain competitive
Bill Rammell
Higher Education Minister

Public sector salaries are expected to grow by the most: 9.5%.

The survey's 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."

Skills shortage

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".

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."

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".

Accountants needed

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.

The shadow higher education minister, Boris Johnson, said: "We must work harder to ensure that students are signing up for courses that will genuinely improve their career prospects.

"We have a serious shortage of graduates in the sciences and engineering and let us hope that students are able to see a huge and growing gap in the market."

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