Graduate jobs market worst for a decade

May 27 2009 by Nic Paton Print This Article

Once the main fear for students at this time of year was simply how they were going to get through their final year exams. This year, however, finals are if anything proving a welcome distraction from the growing fear of what awaits them in the jobs' market this summer.

Many would-be graduates, new research has argued, have hit a "wall of fear" around their prospects for employment when they leave college or university, convincing themselves that the level of competition for all too scarce jobs this year will leave them with little prospect of landing anything but the most menial work.

This is despite the fact that some employers are still recruiting, even though numbers are seriously down on previous years.

The study by consultancy Deloitte has suggested that many students are, all too understandably, sinking into a state of paralysis about their career prospects, in the process making it even less likely that they will be able to land proper employment when they leave the shelter of university life.

Their sense of gloom is unlikely to be lifted by the latest Labour Market Outlook survey from consultancy KPMG and the Chartered Institute of Personnel and Development, which has argued that nearly half of UK companies have no plans to recruit young people at all this summer.

And a survey by the charity The Prince's Trust, the Economic and Social Research Council's Centre for Giving and Philanthropy and Cass Business School has concluded that thousands of Britain's poorest youngsters will bear the brunt of the recession.

Young people, it has argued, will be hit hardest in deprived areas as unemployment rises and local youth services become vulnerable to cuts, with even youth charities unable to keep up with demand.

There had been an 80 per cent increase in the number of under-25s claiming out-of-work benefits in the past year, it added.

The Deloitte study has suggested graduates leaving university this summer face the toughest job market in a decade, highlighting a recent poll of more than 16,000 graduates by student research body High Fliers that found more than half felt their prospects this year were "very limited", the highest since the survey started in 1995.

The high levels of debt incurred by many students was another exacerbating factor, it argued. Having invested an average of £15,000 on their degrees, tens of thousands of finalists are now set to leave university with significant sums to repay, it suggested.

But students were also making things worse for themselves by being too negative and fearful about the jobs' market, Deloitte warned. There had been a bigger perceived drop in demand for jobs than the actual reality, meaning students were potentially writing themselves off before they even got out into the jobs' market, it cautioned.

Sarah Shillingford, graduate recruitment partner at Deloitte, said: "Too much anxiety about jobs prospects and debt can be damaging to students' future prospects. We must help graduates avoid the 'career paralysis' trap which is often triggered when fear sets in and inaction takes over.

"Conversations with graduates throughout the interview process for 2009 has flagged up worrying trends. One is the heightened concern amongst applicants that jobs are almost non existent and if they exist they are unobtainable," she added.

The CIPD/KPMG poll, meanwhile, argued that school leavers would be hardest hit, with fewer than a fifth of employers polled from a sample of more than 500 planning to recruit 16-year-olds leaving school in the next three months, while a third planned to hire school-leavers at eighteen.

Intriguingly, it found the situation was a little more optimistic for graduates, underlying the advantage of university study and chiming with Deloitte's warning about the fear sometimes being worse than the reality.

Nevertheless, fewer than half the employeres polled said they intended to recruit those leaving university this summer.

On top of this, a third of employers said they had already cut the number of graduates they recruited this year.

While 45 per cent of private firms and 54 per cent of voluntary sector organisations were not planning to recruit young people in the next three months, just a third of public sector firms said they had no plans to do so.

Gerwyn Davies, public policy adviser at the CIPD, said: "It is going to be a long, hot summer for many of this year's graduates and school leavers, as they sweat over their chances of finding work.

"Employers have for a long time had doubts about the employability skills of those leaving education, and this year's crop face employers in a more choosy mood than ever before. Against this backdrop, graduates and school leavers need to sharpen their case for being picked ahead of their classmates – and fast," he added.

"To be seen as a 'keeper' – someone who'll add value for employers over the long-term – you need more than just a piece of paper with some grades on it," he concluded.

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