Vacancies are up but salaries show only a 2.1% rise

The winter poll from the Association of Graduate Recruiters (AGR), of 217 big firms, suggests graduate vacancies will be 16.4% higher than last year.

They have risen for five years and are at their highest level this decade.

AGR chief executive Carl Gilleard said the expected shortage of well-qualified candidates "makes worrying reading".

Increasingly firms are recruiting from overseas - partly because "Generation Y" in the UK - those born after 1982 - are rather choosy.

But the shortage of people with the right skills is a common theme.

"It does indicate that recruiters are becoming increasingly discerning and will not lower their standards to fill these positions," he said.

"The fact that employers are beginning to widen their recruitment field outside of the UK may have wider long-term implications for the economy.

"Both employers and graduates may have to amend their expectations."

'Demanding'

The study, by Trendence research institute, said: "A quarter of employers praised 'the strong work ethic and desire to succeed' of overseas graduates, presumably as opposed to those from the UK.

"This impression might be confirmed by the 22.4% of respondents who bemoan a lack of UK candidates with the right qualifications, and the 16.3% who cannot find enough UK graduates with the right skills."

Generation Y - those since 1982 - are seen as "ambitious" and "demanding".

"A particularly striking finding is the definite assessment AGR members make that Generation Y graduates tend to be 'less loyal to the business' that employs them," the report said.

Some employers complained they were "self-centred", "fickle" and "greedy".

More than two thirds of the employers (67%) expected to have problems recruiting the right people, up from 44% who were unable to fill all their expected vacancies last year.

Minorities

One of the reasons for this is said to be graduates' negative perceptions of the business sector.

Despite the anticipated vacancy levels starting salaries are no longer climbing significantly - with a rise this year of just 2.1% to an average of �24,000.

Last year more than a quarter of recruits (26.7%) were from ethnic minorities.

The proportion of women however fell by 3.5% to 39.1%.

In part this is attributed to the jobs covered by the survey, which do not include medical and teaching work - though the report says that does not explain the fall.