Cost-of-living crisis still hitting students, research suggests

The cost-of-living crisis is still affecting students as employers report a surge in graduates and apprentices quitting over dissatisfaction with pay, according to a new report.

The Institute of Student Employers (ISE) said its research suggests those starting work favour pay over career progression.

Half of 177 employers surveyed said graduates and apprentices are leaving for better pay, compared with 40% in 2023 and 2022, and just over a quarter in 2021 and 2020.

Before the cost-of-living crisis, graduates were more likely to leave their employer for better progression opportunities than higher salaries, said the report.

The study also indicated a shift to more applications for higher-paying sectors such as finance, with fewer graduates applying for jobs in the public sector, which are traditionally lower paid.

While starting salaries for graduates and apprentices increased this year, the levels for those who have been in the job for three years have remained static, said the ISE.

Joint chief executive Stephen Isherwood said: “The cost-of-living crisis still impacts students once they have found work. Increases in rent, travel and general living costs mean that salary levels are not keeping pace with inflation.

“So, in a competitive market for talent, more people are leaving for better-paid opportunities. Employers are going to need to work harder to retain talent.”