Recent Graduates: Struggling to Secure Competitive Salaries

Starting salaries for recent graduates are stagnating, according to the annual survey released by Hewitt, the human resources management consulting firm. Interview with Souhila Keffi, lead researcher.

For recent graduates, the salary outlook is rather bleak. Those with two- to five-year degrees who have successfully secured a job will not see higher earnings in 2010 than in 2009. According to a survey conducted between January and February 2010 by the Hewitt firm among 72 companies, more than 70% of employers do not plan to increase entry-level salaries.

With the exception of a few cases, 27% of companies—down from 48% in 2009—plan to increase pay for engineers and Master 2 graduates in 2010; 26% plan to do so for business school graduates, and 23% for those with Master 1, Bachelor’s, or Associate degrees. Souhila Keffi, the study’s lead researcher, provides the details.

What does this study tell us?

Souhila Keffi: A trend toward stagnation is emerging across all educational levels. 70% of companies are maintaining the same starting salaries, whether for candidates with an associate degree or a master’s degree.

Furthermore, more than 70% of companies report that recruitment forecasts are low, or even lower than the number of hires made in 2009.

Which industries are set to outperform the rest this year? 

S. K.: The sectors where the largest number of companies are planning recruitment in 2010 are finance, management control, sales and sales support, research and development, engineering, studies, and IT. In a crisis context, so-called strategic positions remain the most attractive and in highest demand. Conversely, the administrative and HR sectors are hiring less.

How are companies implementing their HR policies? 

S. K.: The surveyed companies are operating within a paradoxical and challenging environment, as they must navigate multiple competing priorities, such as retaining talent, attracting new potential hires, and anticipating the economic recovery.

Where are their limits?

S. K.: Today, companies lack the resources to implement ambitious HR policies, even when they aim to attract top talent. Caution remains the priority. HR departments are caught between economic constraints and the challenges of a post-crisis recovery.

What are the target profiles?

S. K.: In this crisis-driven environment, recent graduates from long-cycle programs are enjoying a privileged position, as they are perceived as more reliable and ready to hit the ground running. Furthermore, the companies participating in the study plan to reduce recruitment for those holding Bachelor’s and Master 1 degrees.