Good news for stressed University students who are spending this week sitting their final exams – the market is about to open with great job prospects to kick start their careers! It looks like the UK is climbing out of its unemployment rut at a skyrocketing rate. Unemployment in the UK dropped by 133,000 in the first 3 months in 2014 and that number is about to shrink further.
According to the employment research firm Income Data Services, businesses in the UK are about to open their doors to graduates, particularly in London. There were 100 well established businesses involved in the research who revealed their plans to hire grads. The research results state that the financial sector is looking to hire 42% more grads than last year. This is a huge increase which will make a massive difference in unemployment rates for the UK. KPMG said that they will be taking on 1000 new grads for 2014, a 30% rise from the hiring of last year. Rolls Royce is another renowned corporation that plans on raising their number of graduate hires. The number is said to rise from last year’s 379 recruited graduates, and their salary is adequate at a starting point of £26,000. That hovers slightly below the average graduate salary of £26,500.
The news of the growing hiring rate seems fine and dandy, but as with most things, there is a downside. Samuel Tombs, UK economist at Capital Economics says “While the economic recovery is creating jobs at a rapid pace, there still appears to be plenty of slack in the labour market which is keeping a lid on pay growth.”
Though the chances of getting hired have grown exponentially, the likeliness of a higher salary is slim to none. A massive 65% of the companies interviewed stated that they do not intend to increase the pay with the hiring binge. This has fueled many debates, as the cost of living has grown quite a lot for students. On top of the cost of living, students are also paying off up to £50,000 in student debt. The companies should be taking this into consideration when deciding on the salary, but it seems they are not. Since there are so many students competing for entry level positions, companies are said to be taking advantage of this by offering as low a salary as possible. So with the rise in number of jobs, the salary is not only expected to stay the same, but actually predictably will be dropped even lower by most companies.
John Philpott, director of The Jobs Economist, says “The good news from the latest jobs and pay figures is that they suggest UK unemployment can probably fall much further and much faster without triggering wage inflation. The bad news is that there is still a very long way to go before workers notice any significant improvement in their real standard of living.”
The graduates of 2014 will be earning substantially less than the graduates of 2008. So although the numbers of unemployed will shrink – we can’t expect a change in the standard of living leaving students struggling to pay their bills and pay off their loans. Which do you think would improve the state of the economy; a pay rise, or an increase in hiring rates? Comment below.