A fifth of top companies have reported a serious recruitment shortfall in spite of the rising number of graduates leaving higher education, according to a new survey by the Association of Graduate Recruiters.

Although the pool of graduates expanded by 13 per cent, some 20 per cent of nearly 300 leading organisations surveyed by the AGR failed to meet recruitment targets in 1994, compared with 13 per cent in 1993. The AGR said the 1994 figure represents the first increase in the shortfall levels for four years. Science and engineering companies experienced the greatest difficulty recruiting graduates, with 10.6 per cent reporting a shortfall.

Suitable management (6.4 per cent) and marketing (4.6 per cent) trainees were also in short supply. Of those companies suffering a recruitment shortfall, only accountancy firms listed a slight improvement on last year's figure, from 2.6 per cent to 1.8 per cent.

Recruiters reported that they were not prepared to compromise on graduate quality, which was thought to be insufficiently high. Also, some employers, especially science-oriented organisations, were looking for graduates with highly specific skills, and in some cases specialised postgraduates.

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Firms also seem to have made problems for themselves, since personnel departments were often notified of vacancies too late in the recruitment process. Roly Cockman, executive secretary of the AGR, said: "Part of the problem was caused by the employers setting their revised higher targets late in the recruitment cycle. However, many employers did report that the quality of applicants is inadequate."

Despite these shortfalls, 86 per cent of employers are optimistic about having more graduate vacancies in the next three years, and in 1995 they will be looking for even more degree students. The average increase is predicted to be 10.7 per cent, but industrial firms are anticipating a requirement for 24.3 per cent more graduates. The AGR said this was evidence of increased confidence in the current economic situation.

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If this is good news for this year's finalists, so is the fact that starting salaries are expected to rise by Pounds 500 to Pounds 14,000. But there is expected to be a wide differential, with non-industrial companies expected to pay the highest salaries of around Pounds 18,200. Postgraduates can also expect higher salaries than graduates with first degrees in the third of companies which indicated that they paid salary differentials. The highest supplements are associated with PhDs, a median of Pounds 2,189. Masters students might hope for an extra Pounds 501, and sandwich degree students might expect a bonus of Pounds 300.