Graduates warned of record 70 applicants for every job

Class of 2010 told to consider flipping burgers or shelf stacking to build skills as they also compete with last year's graduates

Waiting to graduate is increasingly being followed by waiting to work as competition for jobs increases. Photograph: Matthew Power/Rex Features

Graduates are facing the most intense scramble in a decade to get a job this summer, as a poll of employers reveals the number of applications for each vacancy has surged to nearly 70 while the number of available positions is predicted to fall by nearly 7%.

The class of 2010 have been told to consider flipping burgers or stacking shelves when they leave university as leading firms in investment banking, law and IT are due to cut graduate jobs this year.

Competition in the jobs market is fiercer now than for the first "post-crunch" generation of students, last year, when there were 48 applications for each vacancy.

The number of applicants chasing each job is so high that nearly 78% of employers are insisting on a 2.1 degree, rendering a 2.2 marginal and effectively ruling out any graduates with a third, according to the survey published tomorrow.

The Association of Graduate Recruiters polled over 200 firms including Cadbury, Marks & Spencer, JP Morgan and Vodafone and found the number of applications per vacancy had risen to 68.8 this year, the highest figure recorded. In the most hotly contested sector – makers of fast-moving consumer goods such as food, confectionery and cosmetics – there were 205 applications for each job.

Carl Gilleard, the association's chief executive, said graduates needed to be more flexible in their career choices. "They need both short-term and long-term career goals because you're graduating in a very tough climate. It doesn't mean you should be put off applying for the profession of your choice.

"Any employment is better than no employment [even] if it's about flipping burgers or stacking shelves rather than being sat at home feeling sorry for yourself and vegetating. There are lots of other skills required and valued, like people skills: you could be on a counter in a store. It's all about building up your skills base. The big fear is that some people just drop off the bottom of the scale – because confidence goes very rapidly."

Gilleard warned that employers were raising the bar on degrees, and graduates with a 2.2 or worse faced being filtered out by automated applications. "There are dangers in that. You can miss out on some very good candidates."

He said it was too early to say whether this trend would lead to graduates with a 2.2 being excluded from the job market altogether.

In 2008, when the economy was buoyant, just 57% of employers insisted on a 2.1 or higher. Last year that rose to 60%. "We need to wait for 2011 to see if this is a trend," he said.

Graduate salaries are frozen at an average of £25,000, the first time in the survey's history that starting salaries have remained stagnant for two consecutive years. But there is some positive news; the survey noted a revival in banking, the insurance sector and accountancy where vacancies were predicted to rise this year.

Apprenticeships, which are likely to expand under the coalition government, might provide an alternative career path for some students, the survey noted.

Gilleard acknowledged there was snobbery about apprenticeships, but said the children of the middle classes should not assume they had to get a degree to succeed. "I think many middle class parents are actually questioning, is this [a degree] the right route that my son or daughter should follow.

"Too many young people go [to university] because it's expected of them, and they don't think it through from a personal perspective – what will it be like, apart from having a good time."

As applications for university places continue to soar, the government has urged universities to publish statements revealing the help they offer to get their students ready for work.

Responding to the survey, the minister for universities, David Willetts, said: "The job market remains challenging for new graduates, as it does for others.

"But a degree is still a good investment in the long term, and graduates have a key role to play in helping Britain out of the recession. We are committed to making it easier for current graduates to find work. That is why I have just asked all universities to provide statements on employability for their students."

The president of the National Union of Students, Aaron Porter, urged the government to invest in creating jobs and training: "We are concerned that the savage cuts to the public sector will create further unemployment, and will make the lives of graduates tougher in an already difficult jobs market."

For the fourth year in a row, demand for university places has hit a record high.

At the end of May, there were over 640,000 applications for places this autumn – an increase of nearly 14% on last year.

As universities face an increased challenge in selecting the best candidates, there is some scepticism about the new A* grade, being awarded for the first time this summer in an attempt to distinguish the cream of the crop.

Fewer than a third of university admissions officers believe the A* grade would be crucial in selecting the most able students, according to a separate survey published today.

While over half of the 40 admissions officers surveyed believed grade inflation made it harder to pick the best candidates, fewer than a third thought the A* was "essential".

The survey was commissioned by a network of international schools which favour a rival qualification, the international baccalaureate.