ISE reveals early career starting salaries, but Dr Ghazal Vahidi at the University of Derby argues some important differences when we consider inflation and wider wage trends.
The latest data from ISE gives us an updated look at how starting salaries are evolving for graduates, school and college leavers (SCL), interns, and placement students.
On the surface, salary figures for early career professionals show encouraging increases. According to the ISE Student Recruitment survey:
- Graduates can expect a median starting salary of £32,000, up 3% from last year.
- School and college leavers now receive an average of £23,000, reflecting a 5% increase.
- Interns and placement students also see growth, with typical salaries rising to £24,159 and £24,000, respectively—both a 4% increase.
These figures seem to indicate that employers are trying to compete for young talent. But what happens when we adjust these numbers for inflation?
While salaries are increasing, they haven’t fully kept pace with the cost of living, particularly for graduates.
Graduate salaries: Falling behind in real terms
For graduates, that £32,000 salary, while a 3% increase, only translates to a 1% increase in real terms once inflation is accounted for.
In fact, if we compare today’s salaries to those of a decade ago, graduates are earning less in real terms than they were in 2014/15, when the inflation-adjusted figure was worth £35,559.
Of course, graduates who enter jobs with ISE employers can usually expect to see a rapid increase in their salaries once they are employed. In most cases this will quickly lift them above the median earnings, but it does not change the fact that relatively high inflation is reducing what these salaries can buy.
The squeeze noted in graduate’s real terms starting salaries may raise a concern for those employers who are trying to recruit the top graduates.
While starting salaries are higher than they were last year, they aren’t growing fast enough to keep pace with inflation in the long term, and certainly not fast enough to match the overall UK wage growth of 4% (from July 2023 to June 2024).
In the long run, this could make graduate employers less attractive, especially in sectors where competition for talent is fierce.
School and college leaver salaries: A more promising picture
The ISE Student Recruitment report shows that school and college leaver salaries are performing better.
With a 5% nominal increase (and 2% in real terms), SCL salaries have grown faster than both inflation and UK wage growth. This might suggest that employers are putting more emphasis on attracting young people into work earlier, potentially providing a viable alternative to university for some.
For employers, this means that SCL programmes are becoming more attractive as a way of developing talent from an earlier stage, giving them a chance to shape employees’ skills before they enter the more competitive graduate market.
For young people, it means a clear financial incentive to consider apprenticeships or direct-entry programmes, particularly in a climate where university tuition fees and living costs continue to rise.
Interns and placement students: Staying in step with inflation
Salaries for interns and placement students are also on the rise, with a 4% increase across the board. But when we adjust for inflation, the real increases are more modest—1% for interns and 2% for placement students.
This means that while salaries in these roles have grown slightly faster than inflation, they are keeping pace with overall wage growth in the UK. There’s a risk that these roles may not be seen as financially viable for everyone.
Employers will need to balance offering valuable work experience with making sure that the compensation is enough to attract a diverse range of candidates.
Final thoughts
The ISE data paints a mixed picture. Salaries are rising, but for many early career professionals, inflation is taking a bite out of their real earnings.
Graduates, in particular, are feeling this squeeze, with salary growth lagging behind UK wage trends. On the other hand, school and college leaver programmes are increasingly competitive, and interns and placement students are seeing modest but consistent pay rises.
For employers, the key takeaway is that offering competitive salaries is more important than ever—but it’s not just about the headline figures.
Understanding how those salaries compare to inflation and national trends will be crucial in ensuring that they remain attractive to young professionals navigating an increasingly complex job market.