Higher pay for fresh grads as firms hunt for talent

DESPITE growing economic uncertainty, employers are giving higher starting salaries to fresh graduates this year, says management consulting firm Hay Group.

Its annual graduate pay survey found that the average starting monthly salary for fresh graduates rose by about 2-3 per cent this year compared to 2011.

The average monthly salary of a degree-holding graduate (without honours) was $2,678, a touch higher than the $2,617 last year.

A diploma holder was paid $1,866 per month - 3 per cent higher than 2011.

According to Victor Chan, Hay Group's regional general manager (Singapore and Asean) for Productized Services, the gloomy economic outlook has boosted demand for fresh graduates as companies find them relatively cheap to hire than experienced graduates, sparking a "graduate talent war".

"Companies are hiring these graduates to help overcome the resource crunch since they are more cautious in recruiting higher cost experienced hires," Mr Chan.

For certain industries, he noted, "there is also a staffing strategy to recruit fresh graduates to train them into a viable source of technical talent".

Hay Group surveyed 79 companies across general industries in June.

The highest average starting salaries were for engineering jobs. Degree holders got $2,777 a month, up from $2,745 last year.

The next highest-paid graduates were in research and development ($2,764 per month), and merchandise operations ($2,742 per month).

While average salary offers inched up in most industries during the current graduate-hiring season, pay packages in the legal and the production industries stayed the same or shrank slightly.

Diploma holders may also find it worth their while to invest in a degree, as the survey further found that the average pay difference between a degree and a diploma widened from 44.7 per cent in 2011 to 48.7 per cent this year.

Meanwhile, master's degree holders were found to enjoy an 11.9 per cent pay advantage over an ordinary degree holder.

Those with a master's in engineering were paid $3,118, up from $3,037. Those in merchandise operations can enjoy a starting pay of $3,138 - a substantial $165 increase from last year.

"For master's degree holders, the key determinant of their remuneration package will depend on the institution where they attained the higher qualification, as well as the area of professional specialisation they belong to," Mr Chan said.

However, he noted that next year's outlook is set to remain cautious across the board due to the global economic slowdown.