The graduate jobs market: on thin ice?

IN RECENT YEARS, the number of graduates going straight into full-time employment has remained relatively stable at about 40 per cent, with about 30 per cent continuing to study.

“A spell of unemployment when you’re young has a very different effect than when you’re older.”  The words not of Gordon Brown, not of Alistair Darling, but of David Blanchflower, the influential Bank of England monetary policy committee economist who not only predicted the current recession but who now predicts that 3 million people will be unemployed by the end of 2009.

The latest labour market survey shows unemployment growing fastest among 18- to 24-year-olds.

Of the 137,000 rise in unemployment in the three months to October, 55,000, or 40%, were aged 18 to 24.  A recent survey conducted by High Fliers Research established that, among the UK’s 100 top recruiters, there had been a 17% reduction in posts open to new graduates.

The sector most badly affected, the financial sector, sees 47% fewer graduate entry-level jobs on offer than in 2008.

The statistics, admittedly, make grim reading, with the added consideration that students from English higher education institutions graduate – on average – with approximately £17,500 of debt foremost in many students’ minds.

It all seems so surprising given that, just last summer, the Association of Graduate Recruiters reported that graduate unemployment was at its lowest for five years.

“There is understandable panic on campus that this is shaping up to be one of the worst years of the last two decades to be graduating from university,” Martin Birchall, managing director of High Fliers Research, commented recently.

“Not only have vacancies been reduced substantially for those finishing university in 2009, but it is now clear that many of last year’s entry-level jobs did not materialise either, leaving many graduates from the class of 2008 out of work too.”

Much of the anxiety penetrating Britain’s universities stems from the most widely publicised disruptions to graduate employment, those being in the financial sector.

Royal Bank of Scotland will take on fewer than the 500 recruited last year, while HSBC will this year see a 16.2% drop in the number of newly-employed graduates joining its ranks.

KPMG will cut its recruitment by a quarter, yet Lloyds TSB will recruit just as many graduates this year as last year.

Wes Streeting, President of the National Union of Students, remarked: “We’re all very acutely aware that the picture facing this year’s graduates is very bleak. Our advice to students has been to start looking for jobs much earlier, to do their research and to recognise that it’s going to be quite hard.”

As a temporary remedy to the potential problem of large numbers of recent graduates being unable to find work in the coming months, Gordon Brown has recently announced the creation of a National Internship Scheme, a plan which will see four leading firms – including Barclays and Microsoft – offer paid three-month internships to students who have failed to find jobs.  John Denham, the Universities Secretary, has praised the proposed scheme for giving students “real experience of using their skills at work”.

It is believed that the graduates would receive a renumeration package above that of current student grants. The government is considering subsidising these placements to encourage more employers to join the scheme.

Despite these bleak statistics, we can of course find positives in the graduate jobs market at present.  The number of jobs in the public sector has increased by 51% since 2007.  Aldi, whose sales have risen dramatically in recent months as consumers have sought to reduce their food bill by seeking less expensive alternative products, will offer members of its graduate development scheme a starting salary of £40,000, with an Audi A4 to boot.

As a consequence of its buoyancy in the current economic climate, it has also increased the number of places on its scheme by 50%, from 100 to 150.  Law firm Freshfields Bruckhaus Deringer will give graduates a starting salary of £39,000.

“Graduates should not panic,” advised the chief executive of Graduate Prospects, Mike Hill.  “There are lots of jobs out there, but they will be harder to get because more people will be going for them.

“There are more jobs for graduates now than there were 10 years ago. The overall trend is up but there have always been ups and downs.”

A quarter of graduate recruitment programmes now pay more than £30,000 and one in six employers – mainly those from the legal and banking sectors – pay starting salaries of more than £35,000, the High Fliers Research found.

Law firms have continued to raise trainee starting salaries by 29% in the last two years, from £29,000 in 2006 to £37,400. The average graduate salary is now £27,000 for 2009 – £1,500 more than last year’s average for top employers of £25,500.

For many students graduating this year, it would seem that the best advice is to be considered and informed in applying for graduate positions, and to be prepared to submit applications much earlier than in recent years.

The graduate jobs market, especially in the financial sector, has become increasingly competitive as a result of the opening shots of the recession, so it goes without saying that students applying to companies whose graduate schemes have seen a fall in numbers should ensure that they are as well-prepared and as competent as possible if invited to interview or offered an internship.

Above all, there are sources of optimism to be found among much of the bleak economic news offered daily by the news media, and it is for this reason that students should not be utterly despondent about the prospect of entering the world of work any time soon.

Interview: dress code

EXPRESSION OF INDIVDUALITY has become a disadvantage in the workplace, writes Christopher Collins. Graduates will have to conform to more traditional standards of professionalism in their behaviour and personal appearance to get on in a more competitive job market, according to the advice of recruitment specialists.

A combination of the economic downturn and generational stereotypes, are making it harder for graduates to find a job after completing their studies.

According to Judith Germain, a leadership specialist at Dynamic Transitions, managers, typically of the baby boom generation, have a decidedly negative view of ‘Generation Y’ – the current crop of young people entering the labour market.

To counter negative stereotypes and avoid putting off a potential employer training expert, Andy Preston, advises graduates to present themselves smartly and professionally at interviews and to avoid wearing anything slightly ‘edgy’:

“Dressing more professionally than usual will have a positive impact on the interviewer and by this I mean more conventional dress and hairstyles, clean crisp white shirt and plain tie.”

Interviewees would also do well to act positively and show enthusiasm for the role to which they are applying.