British Steel’s announcement that it will pay elite graduate recruits a premium of up to 50% on their starting salaries is welcome, and not just to those who will receive the higher pay.
There have long been concerns about the number of engineering graduates who drift away from engineering and enter more lucrative jobs in the City and elsewhere. But little has been done about it. With declining numbers of students applying for science and engineering courses, the number lost by the profession at the last hurdle after much has already been invested in them is a senseless waste.
As Carl Gilleard of the Association of Graduate Recruiters said in these pages two weeks ago, it is easy for an engineering graduate to train as an accountant but the converse is much more difficult. Reversing the flow of graduates out of engineering is an area where an instant impact can be made on the worsening skills shortage.
British Steel believes that paying more will not only help turn this flow around, but will also help change perceptions among graduates and allow it to attract a higher standard of applicant. Too few still see the company not as modern and high-tech, but as an old-fashioned heavy industry.
British Steel’s initiative may not go down so well with the 70% of graduates who will be taken on at the old basic salary, but there will be a continuum between the two extremes along which graduates will be able to move in both directions.
Other firms without British Steel’s resources may balk at the idea of paying higher salaries in today’s economic climate. But the steelmaker itself has not been having an easy time of it recently. It is arguable that British Steel’s move reflects economic reality, and an investment in its future competitiveness. Other engineering companies are likely to have to follow suit.