Average starting salary for university graduates across the UK
New analysis of entry-level professional salaries has revealed that the UK’s average graduate wage rose at less than the rate of inflation between 2016 and 2017. The study showed that while salaries had seen positive growth in regions such as London and the West Midlands, the national average graduate base salary had grown less than 1% in the last year.
A new report by the Hay Group division of Korn Ferry has found that despite a slight rise in average graduate salaries, at a salary rate of £26,268, the UK has dropped out of the ranking’s top five nations for best paid university graduates, from fifth-place in 2016. The United States and Germany meanwhile topped the rankings at $49,785 and $49,635 per year respectively. Australia, the Netherlands and France also out-performed the UK, with Russia hosting the lowest wages for graduates among the 15 nations surveyed.
Meanwhile in the UK, inflation rose to a four-year high in May 2017, as the pound’s sharp fall since the Brexit vote took hold of the economy, and intensified the squeeze on household budgets. The increasing cost of leisure products including foreign holidays also helped push up inflation to 2.9%, above the expectation of economists that it would remain at the 2.7% rate seen in April. The year-on-year rise in the consumer prices index (CPI) means prices continue to go up faster than wages for many workers, further denting living standards. The wages of entry level jobs for graduates has therefore increased year on year well below the rate of inflation, making for a real-terms decrease.
The wages of graduates has been a continuing source of discussion, particularly in the face of ever increasing student debt, which this year reached a collective worth of more than £100 billion, with outstanding debt on educational loans jumping 16.6% earlier in 2017. In 2011, the higher £9,000 a year tuition fees came into force, propelling student debt to record highs, while graduate wages have stagnated. Previous research by job-site Adzuno suggested jobseekers without a degree could actually earn up to £12,000 a year less than their graduate peers entering the job market. However, in 2016 the Institute of Fiscal Studies found men and women who attended the country’s lowest-performing universities, which generally still charge the £9,000 maximum fee, go on to earn less than those who have not gone to university at all. Results showed there to be 23 universities where, on average, male graduates were earning less ten years after when compared with the average for non-graduates. Female graduates from nine of the UK’s lowest-performing universities were also found to be earning less than non-graduates.
This latest analysis from the Hay Group, meanwhile, suggests that while London’s graduate salaries saw strong growth of 5.7%, along with other key regions including the North-West, which hosts both Manchester and Liverpool and rose 10%, Scotland and the South East both saw growth beneath the rate of UK inflation, and the national average difference between 2016 and 2017 was of just 0.9%.
“It’s easy to blame Brexit for a worsening climate for those entering the workforce in the UK, but there is more than one variable to consider,” claimed Benjamin Frost, Korn Ferry Hay Group Global Product Manager, Pay. “The country’s drop in salary ranking is a prime example of how many factors go into determining pay when one nation is compared to another. Graduates however, who choose certain career paths – especially in science, technology, engineering and maths – can expect to make more than their peers.”
STEM Careers Still Highest Paid
The study also showed that in every nation analysed, science, technology, engineering, and math (STEM) careers were among the highest paid of the surveyed careers. Of the 5.6 million entry-level positions analysed globally with 20,000 companies, an entry-level engineer in the United States for example was found to make 19% above the US national average at $59,213, while an entry-level software developer in Australia can make 14% above that country’s national average at $56,079.
Researchers stated that for a second year in a row - STEM careers secured number one and two for careers offering the highest university graduate salaries in the UK meanwhile. At £30,904, an entry-level engineer was found to be capable of making 18% above the UK national. Engineers in London were, meanwhile, the outlier of the trend, with a 27.5% increase, while Scottish graduate engineers saw a slightly lower average of 17%. Across the UK meanwhile, a software developer was shown to earn an average of 14% above the UK national average at £30,000.
“Exposing young people to several different types of career paths early on will help them decide on careers that are both personally fulfilling and have economically viable,” said Troy Steece, a Korn Ferry Futurestep project manager specialising in early career recruiting.
