An Economic Ice Age?

Are this year’s Nottingham graduates facing a ‘hiring freeze’? This is the current corporate phrase being bandied about, particularly in the US, to describe the situation of graduate recruitment since the recession set in last year. Media coverage of the situation in the investment banking and financial services sectors has allowed the ‘current economic climate’ we talk so much of to cause a chilly note of hysteria to creep into every conversation that might arise about our post-university career plans. From those who had set ambitious sights on a City career, hoping to manage lucrative hedge funds before settling down to an early retirement (spent pruning the hedges of the country estate/townhouse/private island their sound financial maneuvering had afforded), to the first year who has never before given much thought to what to do with the degree he has just embarked upon, suddenly everyone is considering postgraduate gap years, Master’s degrees and, in some cases, escaping to live in the rainforests of Borneo to ‘ride it out’ with the Orangutans for the foreseeable future.


But is this really the way to go? Is it all as bad as it seems, or are we headed for a thaw just as quickly as we plunged into the tundra of economic turmoil? Current statistics do little to comfort the debt-laden undergraduate who had hoped for a high starting salary in a big financial firm. Opportunities in investment banking have, unsurprisingly, fallen (by 28%), and with employment opportunities down 6% overall the graduate marketplace has certainly become a lot more competitive. A recent poll by Reed has shown only 4% of graduates would choose a career in finance at present, but it is not all bad news. Although companies are struggling, with KPMG recently offering its current employees sabbaticals on 30% pay or 4 day weeks in order to avoid making compulsory redundancies, one place all employers recognize it would be foolish to over-economize is graduate recruitment. Elena Hickey, Head of Recruitment Marketing at Ernst and Young, advises that ‘it is not sensible to have a whiplash reaction’, and that employers are very aware of the potentially negative long-term impact of scaling down recruitment too sharply. In the last downturn many big employers cancelled or downsized their graduate schemes to such an extent that when normal financial service resumed they were left with inconsistencies and gaps in their management structure – this is not a mistake they will wish to risk repeating.


In fact, the lack of enthusiasm for employment in banking and retail belies greater opportunities in other areas. The public sector has increased vacancies by 51% in the last year, and applications to the civil service fast-stream alone have risen by 22%. This increase in both opportunity and uptake suggests the public sector is increasingly being seen as a ‘safe haven’ for graduates, and points to an emerging preference for job security and long-term career advancement rather than the attractive but presently uncertain potential a high starting salary in the private sector may provide. In November 2008 the Centre for Economic and Business Research predicted an extra 50,000 jobs would be created in the public sector between then and April this year; add to this the fact that many accountancy firms are finding their audit and consultancy sectors ‘bouyed up’ by the crisis and things perhaps begin to look less bleak. Ernst & Young are presently seeking to promote their graduate recruitment schemes with a new focus on on-campus skills workshops and online challenges, encouraging graduates to tailor their talents towards their chosen career paths, and PwC representatives were recently at the University advertising 1000 places available on their graduate programs. These companies are keen to tackle the negative image surrounding the situation of recruitment: though there may be marginally fewer opportunities, they do not want fewer applicants. When streamlining resources it is all the more important to have the best employees on board.


So for those on the verge of graduation, making decisions about their immediate futures, what is the best course of action? To gap or not gap? To put it all off and remain submerged in academia (or simply prolong the joys of the student experience) on a postgraduate course? Or, to plunge straight into a job search but tailor your career plans all the more specifically to make the best of existing employment opportunities? All of these are valid possibilities, but the overriding aim should be to increase your future employability. By delaying entry into the job market, the competition for said jobs is only increasing; in the next few years those who are taking years out or supplementing their degrees with further education will be competing not only against all the other students from the same years who have taken the same course of action in response to the recession scare stories, but also against the ever increasing amount of graduates queuing up behind as graduate numbers increase year on year. 


Many employers suggest that getting a foothold in employment, regardless of the real desirability of the job itself, should be the primary focus of new graduates. This experience may not be the dream job previously imagined, but can be used to gain examples of the skills you possess relevant to the workplace, and hasten your development from a student to a business mindset. This will stand you in good stead for future applications and interviews when the job market picks up again, and firsthand experience of the workplace will make these applicants’ skills sets already more appropriately honed towards professional positions. Nonetheless, further study or a gap year can do just as much to improve your applications, provided you articulate your experiences in the correct manner; translating what you’ve done into something relevant to the business role you are pursuing. And now more than ever, attaining work experience and internships in the companies you desire to build your career with is paramount. The highest success rate of applicants to jobs at firms such as Ernst & Young is amongst those who have been selected for and performed well in summer schemes and internships.


Despite the reality that we undergraduates are going to have to up our game to compete for fewer jobs in the most popular sectors, the situation is not impossible. This might just be the opportunity to rethink entirely what we really want from a career, or the chance to widen our experience before following the bright lights of a City job when the market begins to upturn, as it inevitably will. After all, how do you measure the extent and seriousness of a recession, or the extremity of a fall in recruitment? The popular method seems to be by comparing the present difficulties to the boom period immediately preceding it, and naturally, the contrast seems harsh. However, in comparison to previous downturns, we aren’t doing so badly- as Micheal Blastland has pointed out in his BBC column, unemployment levels are both at a much lower starting level than in the recession of the early 1990s, and are rising at a similar rate; suggesting strongly that this recession will not prove nearly as bad. Although this contradicts the more cautious view taken by the Government, with Ed Balls stating his belief that ultimately the recession is going to be much deeper than expected, both the figures to date infer (and some the biggest graduate employers are predicting) a fairly swift upturn to occur. So despite the prevailing concerns of so many students, fuelled by a media that’s all too aware that fear (not just sex) sells, the recruitment situation is hopefully undergoing more of a temporary chill rather than a deep freeze.

 Libby Galvin


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