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The campaign to close Britain's skills gap is sparking a graduate recruitment boom not seen since the halcyon days of the 1980s, writes Simon Targett.

The country's major companies are expecting around 10 per cent more vacancies than last year, itself a record year. Figures published yesterday by the Association of Graduate Recruiters, which represents some 300 blue chip companies, including Arthur Andersen, Glaxo Pharmaceuticals, Mercedes Benz and Unilever, show that an extra 1,300 jobs will be advertised, taking the total to just under 15,000. In the industrial sector, the pattern is even more impressive, with nearly 20 per cent more jobs on offer this year, and with some companies doubling their graduate intake.

Cash-strapped students can contemplate paying off debts more quickly than before since starting salaries are also expected to rise by over 5 per cent - well above inflation - taking the average pay packet to Pounds 14,750. But the range of salaries is widening and some employers, mainly big City firms, are now prepared to pay well in excess of Pounds 19,000. Even the average starting salary in London has shot up to over Pounds 17,000.

The competition for graduates is so intense that companies have developed their range of non-pay benefits for graduates. Three-quarters of AGR members offered some kind of non-pay benefit last year. Assistance with further study is the most common form, especially in accountancy, banking and the law. Private pensions and life or health insurance are also seen as important attractions, and some companies offer a wardrobe allowance, free sports facilities, and profit sharing.