The current financial problems are making it harder for students to find jobs when they graduate, especially in the financial sector. After over a decade of continuous growth under Labour rule, banks are now struggling and have started reducing their graduate intake in response to the financial crisis.
It had been widely reported that recruitment would not be affected, and as recently as July the Association of Graduate Recruiters published a survey of its members which showed that graduate recruitment was holding steady.
However, it seems now that the problems in the money markets have finally caught up with graduate recruitment. With the collapse of firms such as Lehman Brothers there is already a huge increase in experienced staff looking for work in the sector, and a smaller supply of jobs. Furthermore, with surviving companies such as the recently bought Merril Lynch laying off some of their workforce as part of cost-cutting measures, new recruitment is low on their agendas.
Previously students who had worked at summer internships had a very high chance of being offered permanent jobs in the same company afterwards, but this is now far less secure. Graduate recruitment is seen as a regrettable but necessary sacrifice that larger companies are willing to take to save money, as opposed to more radical measures such as further redundancies and reducing investments.
_The Financial Times_ reported last week that banks are “narrowing their active recruitment to a tiny handful of universities”. It is thought that there is an ‘inner’ and ‘outer circle’, from which banks are now ‘gathering’ students, rather than the traditional recruitment process. Cambridge, Oxford and Imperial College are thought to be on the inner circle still targeted by major banks. Warwick is considered to be in an outer circle along with with London School of Economics and University College London.
Graduate recruitment is seen as a regrettable but necessary sacrifice that larger companies are willing to take to save money, as opposed to more radical measures such as further redundancies and reducing investments.
Finding a job is becoming increasingly difficult, even for students at institutions in the ‘inner circle’. The Cambridge University Careers Service reported that recruitment of its students was down 50 per cent on last year, with a number of banks pulling out of recruitment events in October altogether.
Meanwhile, the Oxford University Careers Service reports that one leading investment bank told them that it was cutting down recruitment from “67 campuses worldwide to 25”. Banks previously recruited from most Russell Group institutions, but are now hand-picking select universities in each country they operate in, with Warwick not central, but at least in their thoughts in the UK.
Familiar names on campus, such as Deloitte and PricewaterhouseCoopers have been taking on over a thousand graduates each year, but it’s thought that this figure could be substantially reduced in the coming year. Despite this, it does seem that recruitment is not being eradicated completely.
Most students will not remember the last recession, but the firms certainly do, and are looking to learn from previous mistakes. John Philpott of the Chartered Institute for Personnel and Development said that “during the recession of the 1990s many didn’t [continue recruitment], and suffered later.”
It is not all doom and gloom for Warwick students, and it is still estimated that, nationally, the “average graduate earns over £100,000 more over their lifetime compared to someone who has A-levels”. There are also many alternatives to a career in finance currently being considered by students.
Henry Everett, a final year economics undergraduate, said that whilst he was continuing with job applications, he had the back up option of going traveling, which would be “far from a disaster”. The Warwick Careers Service reports that before this year, “about 6 percent of Warwick students take time out”. That figure looks set to rise, and the service goes on to say that, in fact, a gap year can be “one of the best ways to spend your time after university”.
Andrew D’cruz, a third year politics student explained how he felt the reduction in places for jobs in the financial sector had led to an increase in interest in other areas. For example, one Civil Service department reportedly had “22,000 applicants for 500 jobs”. Public sector jobs are appealing as they have greater security than those in the private sector.
Another option is to continue in higher education. Chris Kingston, currently in his third year of a Microbiology degree, said, “I am planning to have a year out next year to earn some money and then apply for Masters courses”.
Research by the Higher Education Careers Services Unit shows that more graduates keep studying when the jobs market is tight, and that “in 1992, when unemployment reached its highest level since the early 1980s, more than 30 percent of students went straight back into higher education after graduating.”