Almost 50 graduates are scrabbling for every job with leading employers with the number of vacancies down by a quarter on this time last year.

Generation Y, which has earned a reputation for being picky and demanding, may have to lower its sights, a survey indicates.

The research, presented today by the Association of Graduate Recruiters at its annual conference in Cardiff, found that the number of vacancies had suffered an “unprecedented fall”.

One in eight top companies had more than 150 applications for each graduate job this year, and the average was 49 — compared with 30 last year.

Most employers predicted there would be no improvement in the situation next year.

The biannual survey of 226 graduate recruiters, including Google, Bank of England, PricewaterhouseCoopers, Clifford Chance, Rolls-Royce, Sainsbury’s, Barclays, and Slaughter and May, found the average starting salary was frozen at £25,000.

The hardest-hit sectors for recruitment are investment banking, IT, construction and engineering. Vacancies in IT are down 45 per cent on last year, and by 40 per cent in engineering.

Companies told researchers that the quality of applications was up on last year.

The report adds: “Retention, which has previously been a major challenge for employers of graduates, has predictably been less of an issue this year as flighty Generation Y has its wings clipped by the recession.”

Graduates also appear to be more flexible and adaptable this year, and less resistent to relocating within the company. Employers are demanding higher academic standards.

The report says: “Three organisations specifically stated that their educational criteria are increasing to 2:1 and above, while others refer to raising the academic bar higher in order to manage increased application levels.”

Growing numbers of employers are relying on psychometric testing to assess candidates, with two thirds now using it.

Many are also introducing motivation questionnaires, to weed out despairing graduates applying for roles in which they have little interest, just to get a job.

Carl Gilleard, chief executive of the association, said that some graduates would have to adjust their sights downwards, and that it was better to take any job than be unemployed.

He said: “I wish we had better news to announce today but we cannot hide from the fact that dramatic vacancy cuts will make the job search very tough for graduates both this year and probably next year too.

“However, it is important to look at this in context and to point out that very few employers have abandoned their graduate recruitment programmes altogether and most are likely to reinstate recruitment levels at the first sign of an upturn in the economy.

“There are still opportunities out there for those who do their research and focus on quality rather than quantity of applications.

Sonja Stockton, head of recruitment at PricewaterhouseCoopers, said: “Graduates need to be open-minded and flexible about the options available to them. If they want an opportunity to kickstart their career, they need to be rigorous in their applications — dedicate time to research the organisation, and accurately reflect their academic achievement and skills.”

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