Graduates can look forward to a rapid rise in salary, the report says

A survey of 100 firms by Incomes Data Services found the number of graduates hired grew by more than 7% in 2005 and is set to rise by another 6% this year.

The biggest areas for growth were in finance and manufacturing.

However, a third of the employers asked said graduates were lacking key skills, including business awareness.

Editor of the report Steve Tatton said: "Our research findings show that both graduates and employers are currently facing a win-win situation.

"There seem to be enough jobs around for new graduates and employers can recruit candidates capable of producing future prosperity."

Pay progress

However, IDS said that while the outlook for jobs was bright, the higher demand had not been translated into pressure on starting salaries, which had shown only modest increases.

The average starting salary for graduates with a top degree was �21,415 in 2005 and was expected to rise to �21,688 this year.

The report also looked at employment and earning prospects of graduates.

It found that graduates employed three years ago earned an average of nearly �32,000 and said this showed that many could expect rapid pay progress following recruitment.

Undergraduates wishing to bolster their employment prospects could do worse than seek a bursary.

IDS found that nearly 70% of students receiving a bursary went on to be recruited by their sponsor.