Students graduating in 2009 face unprecedented levels of debt and will struggle to find employment in the contracting economy.
The introduction of top-up fees in 2006 along with the rising cost of living will mean that this year’s finalists will graduate with the highest level of student debt ever seen in the UK.
According to a survey conducted by the independent university guide Push.co.uk in August 2008, Oxford students will graduate with an average debt of £12,311.
On top of this, the Student Loan Company doubled its interest rate to 4.8% earlier this year, bringing it to its highest level since 1991.
Loan repayments are collected as a percentage of post-graduation salaries over £15,000, meaning that finding a well-paid job straight from university is absolutely essential for many students.
However, the global economic downturn of the past few months has meant that the graduate job market is contracting. Companies are being forced to merge in order to bring down their fixed costs, and as a result fewer graduate positions are on offer.
Trinity Mirror plc, which publishes the Daily Mirror and the Sunday Mirror as well as over 150 regional newspapers, announced earlier this year that it had cancelled its graduate scheme, and that recruitment would not recommence for the foreseeable future.
The financial world has seen the biggest reductions in graduate positions.
A recent survey by the Income Data Services suggested that financial firms are expected to employ 14.7% fewer graduates this year.
Growth in the graduate job market as a whole is expected to fall sharply compared to this time last year, with many companies explicitly citing the credit crunch as the cause of this reduction.
We spoke to an employee who recently joined Lehman Brothers. She explained the state of affairs within the industry and added that like in all previous recessions, graduate recruitment across the financial sector is going to shrink.
However, companies will always aim to avoid rescinding graduate offers because of the negative message this sends to campuses.
She explained that banks and financial institiutions have made redundancies at every level over the last few months and there may be more to come.
She continued, “Banks don’t want to lose juniors as they are the future of the company, but sometimes it’s the only way to cut costs.”
Chris Stainton, an Oxford graduate who set up UniVentures, a recruitment consultancy and marketing agency in April 2007, echoed this, saying, “the banking job market has clearly tightened.
“Graduate recruiters always respond to business need – the message on worsening market conditions has certainly filtered through, and as a result, banks are focused on recruiting interns rather than full time analysts.”
Mergers have affected a large number of financial organisations in the past couple of months, and fewer graduate positions will be offered in the sector as a result.
However, our interviewee maintained that prospective candidates shouldn’t be discouraged.
She said, “It’s actually a not a bad time to start out in banking. Because of all the redundancies higher up, graduates starting next year are likely to be given more responsibility than they might have otherwise had.
“It will be more competitive, but if you’re really interested in the job this is a fascinating time to be in the sector. Recession is like a rite of passage for a banker.”
Beating the Crunch in 2009
While competition is necessarily going to be much fiercer for this year’s graduate intake, there are steps that Oxford students can take to improve their chances. For those wanting to get into finance, our interviewee’s recommendation is to be willing to move out of Europe.
“Many banks and private equity funds are still hiring in Dubai and Asia, so being willing to move there for a few years will probably help your application.”
Moving to Dubai has other advantages – the tax burden is much less and living costs are significantly lower than in the UK.
Jonathan Black, Director of the Oxford Careers Service, commented that “in this situation there is no space for students to be complacent – but then there never really was.” He went to say that “While certain things are outside our control, employers are going to be interested in how you deal with bad situations.”
He urged students not to be discouraged or anxious about the current graduate job market, and to approach their applications with confidence.
“Focus on fewer applications, but really concentrate on them. In general, students need to take more care over this process – a leading recruiter told me just the other day that they have to reject 25% of applications purely because of stupid mistakes.”
With fewer vacancies available, the importance of networking has never been greater.
Jonathan advocates a concerted campaign of what he terms ‘information interviewing’ – a process of sending out letters and emails asking for further information on the sector to key individuals that can often result in a positive outcome. “People never believe me, but it really does work. Extra efforts to be courteous like handwritten thank-you letters can make all the difference.”
The Careers Service will be launching a new website later in the term which will allow students to post their CVs online and match them up with recruiters’ profiles. In such an uncertain and difficult time, every increment can make a difference.
• Be prepared to move out of Europe. Lehman’s didn’t fire anyone in the Dubai office so be willing to move out to the Middle East
• Don’t be discouraged, employers will be interested in how you deal with bad situations
• Approach applications with confidence
• Focus on fewer applications, but really concentrate on them. In general, students need to concentrate more over this process
