The great graduate swindle

If times are tough for the property industry then spare thought for those just starting their careers. For students seeking work placements or chasing their first jobs in property, the situation looks grim.

At a time when many top company bosses will be enjoying bumper Christmas bonuses, struggling students are facing up to continued financial hardship.

And for those ‘lucky’ ones who do find a job or placement in the industry the situation is not any better. The salaries are derisory, and even the RICS charges students on work placements £124 a year.

According to a report by graduate careers organisation Targetjobs, not only have the graduate vacancies per property organisation dropped from 25 last year to 19 this year, but the range of benefits on offer has been slashed.

Here, Property Week speaks to students and graduates about their experiences.

We have identified four big rip-offs faced by graduates. So as you pocket your bonus and get a pat on the back, remember those who are just starting out.

Rip-Off : 1

Regional graduate salaries

In London the starting wage for graduates finishing a property degree can be as much as £22,000 or more but the regional story is different, proving that in property, a degree is not always key to getting your foot in the door.

‘My first wage once I finished my degree was £10,500 – I was working as an architectural technician,’ says Emily. ‘The firm explained that one of the reasons my salary was so low was because they would have to train me. But other people on my course were on an even lower wage than me.’

Graduate careers agency Prospects reports that new building surveyors can expect to earn between £15,000 and £18,000. Working in construction and property management could earn you anything from £10,135 and up. But Targetjobs’ graduate trends survey listed the average starting salary for property graduates as £23,313. The discrepancies between the salaries proves that, not only is finding the right job that pays well difficult, but the gap between salaries is vast.

Publishing director of the Targetjobs report Chris Phillips admits the survey is most representative of the bigger companies in London, and that there is certainly a ‘big gulf in terms of pay between areas of London and outside London’.

‘At the top, property firms offer pretty decent packages, but the smaller regional firms are not really graduate recruiters, as they won’t have the annual intakes as a large firm would,’ explains Phillips.

London graduate trainees also find their positions come with a host of benefits: DTZ’s two-year programme provides graduates with the chance to take part in a ‘global exchange programme’; at Jones Lang LaSalle an annual discretionary bonus structure is available; while at Cushman & Wakefield a full range of benefits is offered.

‘We have to make our package competitive to attract the best graduates,’ says Joanna Embling, a partner at Cushman & Wakefield. ‘But I suspect there are a lot of firms that don’t train at all, and I suspect this will become even more apparent as we enter a more difficult market.’

Paul Laycock, a senior lecturer at the school of property, construction and planning at Birmingham City University, insists not all students end up suffering in the regional areas.

‘One of my students graduated last year and went straight into a job that paid her £24,000. But I have heard of graduates at the other end of the scale getting £12,000.’

The RICS says one of its roles within the industry is to raise standards for its members.

‘If that means attracting the best possible graduates then we are supportive of making sure that we get the best new entrants in,’ says an RICS spokesman.

‘But it would be difficult to say what a graduate recruiter should pay. I think it’s possibly a short-term hardship. Certainly on qualification they are quite happy with their salary.’

But for Emily and others like her the interim is hard. ‘You don’t realise how much you have to fight for any sort of pay rise or benefits in the regions,’ she says.

Rip-Off : 2

‘Sandwich-year’ salaries

With the percentage of property work experience offered to students in 2006 down by 9% – the lowest in four years, it does not come as a surprise that property students who spend a year in the industry working are being paid as little as £10,000. But as universities disclose the average salary among placement students as £14,000 and the fact that last year 20% of those in the industry received a Christmas bonus of £10,000 or more, it grimly illustrates the need for something to change.

‘I was offered the position of an architectural assistant with a starting salary of £12,000, which I accepted taking note of the term ‘’starting salary’’,’ explains Anna. ‘I expected the issue to be raised at my three-month probationary review, but it wasn’t and I was unsure if it would be acceptable for myself, with no previous experience, to raise the issue.’

Taking a year out to gain work experience remains a valuable aspect of a degree. But as students remain anxious to build up their work experience – perhaps more so than a good salary – the issue of what exactly they should be paid is unclear.

‘I wouldn’t necessarily say it was right, as £10,000 is low by today’s standards,’ says Mike Cox, a careers adviser with Graduate Prospects. ‘But it’s not unusual, as wages vary so hugely.’

Heather Collier, who works with the National Council for Work Experience, says: ‘It comes down to the company and what they can afford, but there is a very grey area as to what companies should be paying sandwich-year students.’

There are some firms that do see students as cheap labour, says Cushman & Wakefield partner Joanna Embling. ‘The art of delegation and training is perhaps something that, as a profession, we are not good at. They give students responsible work, but they are just a form of cheap labour.’

Melanie, currently on her placement year as a surveyor, has had first-hand experience of this. ‘I feel I am doing the same work, if not working harder than a graduate, and they are getting double my salary,’ she says.

Any hopes a student might have of being able to earn enough money in their placement to see them through the remaining years of their education also remain small.

‘The general level of salaries is quite low,’ explains Anna. ‘So much so I have retained the weekend job I held while at university to try to earn some more money.’

Rip-Off : 3

Graduate year-out holidays

As you prepare yourself for that ski trip or exotic getaway, spare a thought for the graduates in your office who are forced to use their holiday time cramming for exams.

At present, the average number of days holiday received by graduates is equivalent to that of a normal employee (about 25 days per year). But the pressure of still being a student and not fully qualified is easy to see.

‘In some fields, where the professional qualifications are quite intense, I have seen situations arise where students are having to use their holiday allowance to take time off to cram for exams,’ says Mike Cox, careers adviser with Graduate Prospects.

Furthermore, it is not unheard of for graduates at property firms to get fewer than 10 days holiday a year because their training days at various universities are taken out of their holiday allowance.

Recently graduated student Lisa says: ‘A lot of other people on my course would get days off for study leave but nothing was offered to me, even though I went to college one day a week.

I was coming into work for all of my [college] holidays as well, when really I needed that time to be studying. I think they try and get away with paying graduates as little as they can.’

In Melanie’s role at her current work placement she feels unable to approach her firm about her holiday allowance. She receives the same holiday allowance as her colleagues. However, she does have regular training days at university and feels the issue of taking days off is difficult to raise as the employer also pays for her RICS fees.

‘They’re not keen for you to take days off at all and it makes you feel like you can’t negotiate as well,’ she says.

But Cox argues that, although it is not ideal, it is simply a case of what students are looking for in terms of their future.

‘If you are getting a salary and a sponsorship to a qualification [such as the APC], then graduates are much more likely to take up that opportunity,’ he says.

Rip-Off : 4

Expensive experience

Membership of the RICS remains free for all students on a property-related degree course. However, this does not take into account the charges placed on those students who are branching out for a year in the industry (see table).

These figures mean that a student on a work placement for 12 months will have to pay a £124 subscription fee plus a £52 registration fee. Alongside these fees, students’ other costs for the year include university tuition fees students usually have to pay half the yearly fee on their year out, which have to be met from the low salaries offered to them in what should be a valuable work experience placement.

Suzanne Roberts, operations manager at RICS membership operations, argues students do not pay all the fees at one time when they are studying. Furthermore, gap year students do get recognition in terms of the fact that the organisation appreciates that they are not full-time APC trainees.

‘We appreciate their positioning in terms of the fact that they are taking a year out of their studies to go out and get experience in the field,’ she says. ‘We appreciate they’re only there for a year and they are on a low wage and will go back into university.’

Furthermore, she argues that, from an enrolment point of view, a high percentage of people enrol on the APC but do not pay the fees themselves their recruiters do. However, as it is not a requirement for firms to pay the RICS fees, some students find themselves facing a financial hardship they had not anticipated.

For many students, the firm they choose to work for is usually one that assists them financially in making payments to the RICS. But that does not mean students are unwilling to pay the fees themselves, in which case, are they simply getting a shoddy deal?

Cushman & Wakefield partner Joanna Embling argues that the RICS is a victim of its own fees.

‘The RICS sets its training requirements so it is quite a cost for students and firms,’ she says. ‘Some firms simply say it is a cost they are not prepared to bare.

‘People want to be qualified but how important is it across the entire spectrum of the work that we do? At Cushman we already have a policy looking at non-cognate degree holders because we want diversity across the firm.’

What’s your view? Email letters@propertyweek.com