Businesses that invest in graduates see significant financial returns, according to a new report out today from national campaign Backing Young Britain.

The Lancaster University research by Dr Anthony Hesketh found that graduates pay for themselves 20 months from their start date. By their third year, mid-sized graduate recruitment and training programmes (the recruitment of 170 graduates) generate a £5.30 return for every £1 invested.

The findings challenge the decision by some businesses to stop graduate recruitment schemes or not hire graduates at all due to their upfront costs.

Dr Hesketh says: “We know that in these tough economic conditions businesses are considering the value of graduate recruitment; however, they remain a vital source of future capability for organisations.”

PricewaterhouseCoopers (PwC), the professional services firm, is one employer that has maintained its student recruitment programme this year, recruiting 1,000 people nationwide, and has today announced its plans for a further 1,000 vacancies for 2010.

Ian Powell, chairman and senior partner, PwC, says: “We held our nerve in the market and maintained our recruitment levels, because no matter what the current economic conditions, recognising and developing talented people puts business in the best position in the recovery.

“The UK’s long-term economic prosperity is in the hands of this generation, and failing to maintain our investment and confidence in their skills now will pay business a poor dividend in the long term.”