I can be quite a data junkie so when I see a statistic reported in the media that looks a bit suspect warning bells sound. Last week, there were several stories reporting that the average graduate salary would remain fixed for another year at £25,000. These reports were based on two studies: the first was released by the Association of Graduate Recruiters (AGR) stating the £25,000 figure and the second by High Fliers Research predicting a higher salary of £29,000. After choking on my lunch in disbelief I decided to go in search of the data behind this information. Since the AGR wanted £200 for their report, I had to base my analysis on the freely available High Fliers Research report.
Before diving into the data I should maybe explain my choking disbelief mentioned above. I know people who graduated eight years ago with a 1st or a 2:1 degree from top universities who are just now reaching the heady heights of £25K never mind £29K. Admittedly, most of them are scientists and the fact that they are on the lower end of the payscale is not exactly breaking news, but my mental list also includes lawyers, architects, teachers, accountancy trainees and other graduate jobs in areas such as logistics and insurance.
So now for the data. The High Fliers Research report is based on the The Times Top 100 Graduate Employers from the autumn of 2010, including giants such as Accenture, Procter & Gamble, BP and the big four accountancy firms. These top 100 organisations were determined from a poll of over 16,000 final year students who were asked, “Which employer offers the best opportunities for graduates?” The report is entirely accurate when it states that for these specific employers and their available vacancies the median salary will be just over £29,000.
The problem arises when this data is interpreted and reported as the ‘average graduate salary’ in the media. That is a completely false assumption. It is the median salary based on 15,563 graduates recruited by December 2010 by 100 specific employers. Therefore this does not apply to the average or median salary of the 350,000 graduates of 2010 but merely 4.4% of them that managed to get a job with these ‘top 100 employers.’
Perhaps the article titles in the newspapers should be amended to; “A starting salary of £29,000 will apply to less than 5% of graduates” or “1.9% of graduates will have starting salaries of over £29,000.” The graduate jobs offered by the top 100 financial and blue chip organisations usually offer higher salaries than most other graduate recruiters. Equally the majority of them will offer positions in London where the salaries are generally higher.
The graph above shows the number of positions offered in certain business sectors and their average salaries based on the High Fliers data. Investment bankers command the highest salary, while public sector workers receive the lowest. The accounting and professional services sector offers the greatest number of positions whereas the chemical & pharmaceutical industry offers the least. Several lower paying graduate recruiting sectors were not included in the report.
Data from the Higher Education Careers Services Unit (HECSU) covered a wider range of graduate jobs as shown in the bar chart below. A selection of these along with the average graduate starting salaries are listed here:
- Architect: 20K
- Scientist/Technician: 23K
- Marketing: 18K
- Graphic Designer: 18K
- Ecologist: 16K
- Charity fundraiser: 18K
- Recruitment consultant: 20K
- Teaching: 20K
The HECSU report is based on 224,895 graduate responses (82% of all graduates) from 2008/9. The average salary reported here is £19,695, which is considerably lower than that reported in the media.
http://www.hecsu.ac.uk/research_reports_what_do_graduates_do_november_2010.htm
This is based on 224,895 graduate responses (82% of all graduates) to their survey in 2008/9. The average salary reported here is £19,695, considerably lower than that misreported in the media.
With students now facing fees of up to £9000 a year in England it is only right that they are provided with adequate information on their potential salaries after graduation. Potential undergraduates should be wary of media statistics.
Love the post Jo!
So, a recent graduate with little or no commercial experience can command a salary of £25-£29k can they? Really?
I think these sort of reports offer nothing but stupidly high expectations for the average/non banking/going to work in a small business graduate – I also know plenty of people who are yet to reach £25k and No, they’re not scientists just working for SME’s.
I have 10 years experience and when searching for my job area on S1jobs only a very small minority of results show a salary above £30,000…
On the other hand, I think people generally take these reports with the pinch of salt they’re due otherwise why would my company be inundated with graduates offering to work for free in exchange for experience?!
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Well researched Jo! Just goes to show that there is a lot of misinformation given to young people when they make these decisions.
Furthermore, there are all the statistics which claim that “over a lifetime graduates earn £xx,000 more than non-graduates”. But these findings are all based on retrospective data, and does not take into account the dilution of the value of degrees since then.
But then there is also the higher costs. Under the new tuition fee regime, we’re looking at £27,000 tuition fees total and lets say £18,000 over the three years for rent, books, food, travel expenses etc. So that makes £45,000. Interest is charged differently (RPI + 3% from the day you start borrowing the money). If you start your first job on £29,000 for instance, you would end repaying in the region of £120,000 for your degree if you include interest. For school leavers at the moment, does anybody really think that university is worth it at that price?
“There are lies, damn lies and then there’s statistics”
Thanks @thejollyprophet! There is indeed a lot of misinformation out there!
You’re right: the cost of going to university is rapidly rising now that there are tuition fees in England & Wales in addition to other expenses. You could buy a flat for £120,000 and it would probably be a better investment in many cases.
You’re right to question if university is worth it. In fact, I asked that very question on a poll on LinkedIn the other day and it is getting quite a response. The poll is here if you’re interested:
http://www.linkedin.com/osview/canvas?_ch_page_id=1&_ch_panel_id=1&_ch_app_id=80&_applicationId=1900&_ownerId=78284011&osUrlHash=ZTXW&trk=hb_side_apps