Setting an appropriate graduate salary
There are several reports on the salaries offered to new graduates by the top employers and big graduate schemes, but what does this mean for smaller organisations?
According to the High Flyers report ‘The Graduate Market in 2023’ for the second consecutive year, the median graduate starting salary on offer from the UK’s leading employers is expected to rise – to £33,500 in 2023. This is an annual increase of £1,500, compared to the starting salaries paid to graduates in 2022 – and a rise of 11.7% since 2020 when the median starting salaries at the country’s best-known graduate employers was £30,000.
However, starting salary data is often based on a relatively small number of large graduate employers in high paid industries who are competing for the ‘top graduates’. Yet most graduates will begin their career in a start-up or smaller business and on a lower salary. According to data from HESA’s most recent Graduate Outcomes survey of 2020/21 graduates, the average salary reported by first-degree graduates in full-time employment was £27,340 fifteen months after graduation.
This varies by industry sector, job location and the graduate level i.e. you might also expect to pay more to a Masters or PhD student.
So, what should you pay?
You should pay what you can afford but this must be at least national minimum wage. As a rough guide, a good graduate starting salary in the Yorkshire and Humber region would be circa £24,448. If you require a degree in a skills shortage area, such as Computer Science or Engineering, offering a higher salary will help you attract and retain a good graduate. But don’t worry if you can’t offer a salary at this level. Many graduates are interested in the other major benefits of working for a smaller organisation, such as responsibility, progression and flexibility.
If you require any further advice or guidance regarding your recruitment, please do not hesitate to get in touch with us.
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