Finish school, go to university, apply for job, begin career. It is the plan millions of young Britons have tended to live their life by for the past two decades at least. It is expected that a good degree from a well respected university, can be cashed in with relatively minimal fuss for a world-is-your-oyster card.
For the majority of today's twenty-something university graduates it has not been a question of if you will find a job but rather where will you find that dream job and how much will it pay. Building a career is a natural part of growing up and entering into society, it is what shapes us as people and gives us focus for the future. We might go so far as to say that having a job is our right. This has certainly been the case for the young, educated Britons who have grown up in the boom years of Tony Blair's leadership, living in a country where the economy has grown consistently year on year for over a decade, and where the level of employment has been such to attract migrant labour from the developed and developing world alike. For those of us who have recently left university or are set to do so during the next few years, however, the outlook may well be very different. With graduate recruitment already suffering across several sectors in the wake of the global economic crisis, will you be part of the 'lost generation' hampered by an increasing shortage of attractive job opportunities?
Education, education, expectation
One of the major weaknesses surrounding our generation is that we are too young to remember the bad times, the times when finding a job, and more to the point one that was desirable and well paid, wasn't a birthright but rather a very real and often very daunting challenge. Being a child of the nineties, I have to rely on my father's very generous helpings of hindsight to gain a perspective on what it was like for generations prior to ours attempting the school-university-job right of passage. As a lecturer in archaeology at Sheffield University during the eighties he would regularly tell his final year undergraduate students that the majority of them had no hope whatsoever of finding a job upon leaving university. The majority didn't, in archaeology, or indeed anywhere else.
During this time period a generation or so of young people struggled to find work, the challenge set highest in 1984 when the rate of unemployment peaked at nearly 12% - over twice the current level. The majority of today's youth have been relatively spoilt in the sense that we have grown up in an era in which we haven't had to worry to the same extent about economic pressures and where business and financial news has been largely confined to the inner realms of our newspapers. Since the mid nineties the economy in this country has been able to support larger and larger numbers of graduate jobs as our economy has moved away from industry and manufacturing in favour of 'white collar industries' such as financial and legal services, requiring ever greater numbers of bright, young educated types to stoke the fires. As such, the number of undergraduates attending UK universities has increased by around 53% over the course of the last decade. Our graduate employment opportunities which have expanded accordingly (by nearly 30% since 2004), have become the envy of the rest of Europe to the extent that the cream of French, German and Italian talent has found itself flocking to the shores of what has become the world's leading financial centre. Within this environment, New Labour's target of helping 50% of young people into higher education, unthinkable as recently as twenty years ago, has looked not only achievable but very sensible. We needed these numbers of super bright, highly educated young workers if we were to keep up with our global competitors: the super bright, highly educated graduates of Beijing, Mumbai and Tokyo. Any shortfall of people willing to take on lesser-skilled, lower paying jobs would be quickly compensated for by migrant workers from New Europe and further afield still, drawn by the ample opportunities and high salaries offered by our booming economy and robust currency. Those of us fortunate enough to attend the country's numerous, internationally-renowned universities have enjoyed a plethora of career options irrespective of our graduating disciplines and, most significantly of all, one of the lowest levels of unemployment in the European Union, consistently below that of our great European rivals: Germany and France. As my once economically-challenged father is never shy in pointing out to me, Britain's youth have never had it so good. The majority of our generation has never really been forced to fully confront one of the most unpleasant, yet unavoidable consequences of living in a capitalist society: unemployment.
Doling out some moral guidance
It can be argued that unemployment is a natural, and to some extent necessary, product of any properly functioning capitalist economy - among today's societies only Cuba and North Korea can boast a 0% unemployment rate. A certain level of unemployment is indeed necessary to keep the economy ticking over - if there are more jobs than people able to fill them, there is less impetus for people to be productive and the business and economy of a country suffers to a certain degree. Too low a level of unemployment also means less competition for jobs, allowing employees to demand salaries above the level they deserve, safe in the knowledge that there is not a backlog of potential workers ready to take their place. This forced increase in wages must then be passed on by the employer to the customer causing over-inflation, in turn causing workers to demand higher wages and so a vicious cycle unfolds. In short, unemployment can be considered the natural way for a well functioning capitalist society to keep people 'on their toes'. This has generally worked well in keeping the UK stable over the last fifteen years or so. Unemployment since 2000 has been at its lowest level since 1980, averaging around 5.6%, yet has still not been so low as to induce complacency in the workforce. Meanwhile, the number of graduates in the work force has risen dramatically, ensuring that there is still competition for skilled jobs. As a result, inflation has also remained consistent and relatively low during this period. All in all a healthy, productive capitalist model our country has been.
The last twelve months, however, have begun to chip away at this stability and have started to unravel the security, and in particular job security, that most of us have become accustomed to. The fall-out from the credit crunch and ensuing financial crisis has begun to put the brakes on business and productivity across a number of sectors; a slowdown which is set to escalate as our economy slips into a recession over the coming months. The economic situation has already begun to have a detrimental effect on the labour market. The employment data released in August showed a jump in the number of individuals claiming unemployment benefit of 32,500 - the highest monthly rise since 1992 at the mid point of this country's last period of recession. Whilst the current official rate of unemployment is listed at 5.6%, this is predicted to rise to 6.5% or above over the coming year according to the British Chamber of Commerce; still lower than the 6.6% averaged over the course of the 1970s and 80s but not by much.
Who is affected?
The headlines so far have surrounded the large-scale losses suffered by the banking industry over the last few months, most notably the images of bemused Lehman employees clutching the contents of their desks in cardboard boxes, reinforcing the growing perception that the days of steady growth within the industry are rapidly coming to a close. Further large cuts in staff numbers are expected across the banking world as firms look to minimise expenditure and streamline their operations in preparation for the coming months. Other industries will also be severely affected. The housing sector across the United Kingdom has been thrown into disarray with 150 branches of estate agents being forced to close in the UK every week, throwing thousands of people out of work. The manufacturing and construction industries have also experienced large numbers of redundancies following slowing demand from the public for houses and consumer goods. Manufacturing conditions are thought to be the worst suffered since 1992 and they are getting worse. Major UK employers Ford and Land Rover recently announced that they are switching to a four-day production week due to a slow-down in the automobile market, a practise which, whilst common during the recessions of the seventies and eighties, has been largely unheard of in recent times. Meanwhile, small and medium size businesses across all industries are finding it increasingly difficult to retain staff as access to credit from banks has all but dried up and rising energy costs have eaten into profit margins.
What next for graduates?
So where does this leave the current crop of university leavers and those expected to graduate over the next few years? Over the last decade the number of graduate positions on offer has, to the greater extent, kept pace with the rising numbers of graduates entering the job market each summer. By current estimates over 90% of graduates looking for work will find full-time employment within the first six months, with a recent survey by Cambridge University revealing that only 3.2% of its graduates were still unemployed a year after having left full-time education. The question, however, is whether, in the current tumultuous economic climate, the supply of jobs can continue to meet the demand of what are arguably over-inflated numbers of untrained, university educated twenty-somethings. Graduate recruitment into many industries has already suffered as a result of the problems in the banking industry - intake numbers for full-time positions in the investment banking division of firms are down across the board with many firms yet to reveal the number of graduate positions available for their 2009 intake. Yet, if we take the graduate employment sector as a whole, intake levels appear to be stable for the current milkround at least. The Association for Graduate Recruitment recently announced that the number of positions for graduates in 2008 were actually up slightly on last year. The outlook for next year's intake also looks relatively rosy with only 17% of employers anticipating hiring fewer graduates in 2009. A study of organisations profiled in The Times Top 100 graduate Employers reported an expected total drop of only 1% in intake levels across the UK's larger organisations.
Many industries are in fact looking to increase their graduate intake levels. The major accountancy firms, for example, have boosted their graduate recruitment by nearly 12% this year with numbers of graduate vacancies within the legal sector also reported to be above 2007 levels. Outside the private sector, entry level opportunities for graduates in government positions have also risen considerably with 20% more public sector jobs available than in 2007 - the armed forces have seen a 12% rise in graduate intake due to the escalation of the conflicts in Iraq and Afghanistan. All food for thought for those of us who are open to considering a range of options. Even as regards opportunities in finance, however, it is important not to become swept away by the hype. There will undoubtedly be fewer positions in the financial services industry available over the next two to three years but the industry will not grind to a halt - the vast majority of banks will continue to operate and will need graduate employees in order to do so. Investment banking divisions in many organisations are still offering full-time positions, for example, Citi's European arm recently hired 45 investment banking grads across the continent, a drop of less than 10% on last year's levels.
The overall shortfall in full-time graduate vacancies in specialist areas of the financial services industry such as M&A and leveraged-finance are expected to be compensated for to a large extent by increased intake into other areas of banking such as IT and audit. There are still jobs out there for the skilled and determined.
The reason behind what might seem like a blasé reaction by employers to the uncertain, or more accurately, almost unprecedented state of the global economy in 2008 is that, especially outside of the worst hit areas such as real estate and investment banking, firms are reluctant to hit the panic button and dramatically reduce their level of graduate recruitment for fear of the repercussions. Following the last, and ultimately short-lived downturn after the dot-com crash of 2001, the instinctive reaction for many firms, particularly in the banking industry, was to immediately reduce their numbers of employees, particularly at the lower levels with entry-level opportunities cut by many banks. Whilst this reaction appeared prudent at the time, the result of these cut-backs was to leave many firms under-staffed in vital areas once the economy picked up again, forcing them to fill the gaps with more experienced and more expensive personnel. Althoughon this occasion the economic slowdown will undoubtedly be more severe and longer-lasting, companies are equally as wary of acting rashly out of fear before they know the full extent of what is going to take place over the next few quarters.
Survival of the fittest
What will become increasingly clear over the coming months, however, is that firms, particularly in the financial sector, will be forced to be pickier as they streamline their operations. Employers will look to 'safe bets' in filling ever more coveted entry level positions as they look to prepare themselves for whatever the next few years have to throw at them. During the 'good old days' of the last decade, a fresh-faced graduate with a 2:1 from a top university could expect to enter the job market with a relatively under-developed set of skills and limited understanding of the outside world with the knowledge that firms would be willing to take a punt on this raw talent. Going forward, their potential employers will now be forced to be more scrupulous and demanding before investing the time and money required in training them for a role. Besides academic achievement, employers will look more than ever to evidence of additional skills such as communication and leadership. A sound understanding of the company and sector they are going into is also top of the agenda, particularly as regards the financial services industry as the blanket coverage of the global financial crisis across the world's media will mean that the old excuse about 'living in a university bubble' will no longer stand up to scrutiny.
Despite facing what promises to be an 'interesting time' for the global economy, to phrase it mildly, our generation, for the time being at least, can continue to regard itself as fortunate in relation to the thirty and forty-somethings who left school and university in the eighties and early nineties and were met with far fewer and a far slimmer range of opportunities. As the situation stands, our spluttering capitalist society still has much more spluttering to do before it induces that level of misery upon us. To put it in quantitative terms, the Misery Index, a scale widely looked to throughout the seventies and eighties to track just how grim people's lives had become - calculated by adding the level of unemployment to the level of Consumer Price Inflation (CPI) - currently stands at 9.8. Despite being the highest it has been for twelve years, it is still along way off its 1974 peak when it hovered around the mid-thirties. Comparatively speaking, therefore, the current generation of bright, young, educated people, for the time being at least, can be thankful that they are bright, young and educated in 2008 rather than at the beginning of any of the past three decades. The late noughties generation of university leavers will need to be savvier and perhaps more ruthless than their predecessors but with any luck they will not be lost in their search for a dream career.