By Max Clarke

The number of graduate vacancies rose in last year's recruitment season for the first time since the recession started to bite, according to the Association of Graduate Recruiters (AGR), which published the winter edition of its bi-annual survey today (Tuesday 25 January)

Despite a slow start to the recruitment year 2009/10, leading to initially pessimistic forecasts, employers reported a surge in graduate vacancies in the closing months, resulting in an 8.9% rise in vacancies on the previous recruitment round. This upward trend is predicted to continue with a further increase of 3.8% in 2010/11.

However despite a brighter outlook in terms of vacancies, the median graduate starting salary was fixed at £25,000 for the second year in a row in 2009/2010 and is predicted to remain stagnant for an unprecedented third year.

Many graduate employers will also be holding back other financial incentives for graduates in 2010/11, with only one quarter likely to reward successful candidates with a lump sum payment and approximately two-thirds (67.8%) saying that they do not intend to offer education premiums.

Commenting on today’s figures, David Willetts Minister for Universities and Science said:

"The graduate employment market is showing encouraging signs of improvement for the first time since the beginning of the recession. Investment in growing the economy and creating a highly skilled workforce is critical and graduates have a vital part to play. A degree remains a good investment in the long term and is one of the best pathways to achieving a good job and rewarding career."

"However, the job market remains competitive for new graduates, as it does for everyone, and graduates still need to work hard to maximise their chances of success. Internships are a route being followed by increasing numbers of graduates and - as part of our programme to get Britain working - we continue to encourage employers to invest in students and graduates by offering work experience and internships which help them to develop valuable skills and boost their employment chances."

Carl Gilleard, Chief Executive of the AGR, said: "It is heartening to see that after so many months of misery for graduates, the job market is finally picking up. Our members represent a broad and competitive segment of employers within the UK economy and these results signal that the graduate market is overcoming the impact of the recession and anticipating further growth."

"However, the fact that salaries are predicted to remain the same for a third year and fewer employers are offering financial incentives for graduates, is also evidence that the demand for jobs still greatly outstrips supply and recruiters continue to receive above and beyond the number of applications they require.

"Although it is currently an employers' market, we would urge recruiters not to become complacent - particularly as things start to pick up and tuition fee increases take hold. It will be essential for organisations to invest in graduate talent if they want to meet recruitment targets, prevent candidate dropout, meet increasing salary expectations and retain the most talented employees."

Reflecting on the implications of the Browne Review, AGR recruiters anticipate that salary expectations will increase due to higher tuition fees and also that the pool of graduates from which they recruit will include fewer people from lower socio-economic backgrounds. On the whole, however, they do not tend to believe that the Browne Review will result in any adverse changes to the quality of degree courses of interest to their organisation and sector.

Other findings:

* Employer recruitment marketing budgets have remained steady at £20,000 (average figure per organisation) and are not expected to significantly increase
* Candidate dropout due to simultaneous applications at multiple organisations is deemed as the most likely challenge to meeting recruitment targets

Today's edition is based on the responses of 222 AGR members in the UK across 18 sectors who offered a total of 20,971 graduate vacancies in 2010.