A bit of perspective

The previous post summarises some of what we know about the current state of graduate employment.

With that in mind, it is very important not to overreact. This story in the Times earlier in October is an excellent example of badly overestimating the contribution of the finance sector to graduate employment, and as a result it presents view that have been pertinent for some time. A Masters, by itself, does not magically enhance employability, and it never has. This is not something new. "Just having a good degree" has not guaranteed a job for a long time - if, indeed, it ever did. Employers want evidence that you can do their job, which is why work experience is so very valuable.

I'm not going to spoil the stats for the new What Do Graduates Do?, so let's stick with the 2008 version. After all, we were in happier economic times, with the finance sector booming.

At that point, 8.1% of working graduates were employed in jobs in business and finance. Thus far, much of the rest of the graduate economy seems much less affected. We can't promise that will continue, but at present, that's the situation - this is a storm currently hitting less than 10% of the graduate employment market. The IT market went through some problems a few years back and that caused some serious problems for new graduates - unemployment rates for IT and computing graduates remain elevated. This may provide a guide to the kind of things we can expect for the finance industry downturn.

There are jobs out there, there will remain jobs out there and a lot of them will be good jobs. They will be more competitive, and people who aspire to be investment bankers will find it even tougher. It might be worth thinking about other options, particularly if you are anxious about debts to repay.

Health, education, science, engineering, the arts, the media, social and welfare, to name a few sectors that are very important to graduates, are not in the same condition. Things will probably get worse over the next few months, but, as yet, we are not seeing the situation in the early 90s, where unemployment rates for new graduates were well over 10%.

The economy would have to deteriorate a great deal, with malaise across all of the sectors that are not currently embroiled in the current storm, to bring us to that level of graduate unemployment.

Graduate jobs? What’s going to happen now?

Hello everyone, this is a bit like moving into a new house. The décor is not quite right yet (although I think I’ve reached the limits of my HTML kit-bashing skills!), but we’ll make it a bit more homely in the next few months.

Let’s get straight down to business. The economy is very definitely not as it was last year, and we’re getting a lot of questions about how the current downturn is going to affect graduate employment. One of the things we might be able to do with this blog is track what we see going on in the economy in the hope that we can share information and perhaps get a better sense of who is going to be affected and where.

First, to The Economist. They’re carrying an article that looks at the likely picture for this year’s graduates, and includes figures we produced at HECSU that tell us that one of the first things we can expect in HE is a surge in applications for postgraduate course. Naturally, this makes sense when you think about it, but it is still interesting to see how closely graduate unemployment rates and postgraduate enrolment rates have followed one another in the last 30 years. So, if you're involved in the PG sector, things may be about to get a bit busier for you in the next couple of years.

The other points the article makes are fundamental to the situation we now find ourselves in. Most importantly, it looks inevitable that the graduate employment market will be tougher in the next 12 months (don’t commit me any further than that) than it has been for a few years. We have seen several years of growth in graduate employment and the statistics compare very favourably with previous data. These tougher conditions will be particularly profound in the finance industry (although possibly not all of it – many companies with diverse portfolios will simply switch focus to those areas that are lucrative in recessions.) We also hear that the construction and building industry is also having a hard time.

Those of us with a few years under our belts remember previous recessions, but it still comes as a shock to realise we haven’t had one for around 15 years. This year’s graduates simply do not remember what it was like. And that means a lot of young people are quite reasonably anxious about what awaits them on graduation, whilst others may be overoptimistic.

Many businesses don’t remember recession, for that matter. That said, those business that do, seem to be keen to avoid mistakes made in the 90s, where many businesses completely froze graduate recruitment and, as a result, were unable to capitalise when conditions improved. So companies are talking of slowing down and reducing graduate intakes, not stopping them entirely at the moment. An interesting guide to the current state of thinking for new graduates in finance can be found at efinancialcareers.co.uk, with information on who seems to still be hiring and reports from the sector.

Although the effects are currently being felt most strongly in the finance industry and in London, there are bound to be ripples throughout the rest of the economy. But, as yet, it isn’t clear where. Graduates may well start to see the public sector as a safer option, but there is a General Election on the not-too-distant horizon, and that could well lead to a change in public sector priorities and funding. So how secure will those jobs be?

And that’s where we come back to the original question. What’s going to happen now? The honest answer is: “We don’t know.” Economic prediction is a tricky business at the best of times, and these are not the best of times.

But we’ll do our best to find out, and if we do find anything, we’ll try to tell you.

Welcome to the HECSU Blog

Welcome from HECSU, the Higher Education Careers Services Unit!

HECSU is a UK charity whose commercial arm, Graduate Prospects, provides careers information and services to UK university careers advisory services, students, graduates, employers and others. We produce a variety of careers reports and research for the UK higher education sector and beyond.

This blog is designed for readers to get a feel of what actually goes on here at HECSU, how we operate and what we're currently working on. It will also allow stakeholders to interact with us and offer comments on what we're up to. Comments will be moderated, but only to ensure that we don't get spammed.

Posts will appear regularly from HECSU staff and we will also use the blog to keep you up to date with research that may be of interest to the sector.

So, let's get on with it!