Public sector budget cuts could cause graduate unemployment to soar
David Woods, July 01, 2010
Public sector budget cuts of around 25% could hike graduate unemployment to unprecedented levels, leading to a graduate unemployment rate of over 20%.
The Higher Education Careers Services Unit (HECSU) forecast last year’s graduate unemployment to be in the region of 7.5%. It was reported at 7.9% in January 2009, which is around 22,000 graduates. With a higher proportion of the public sector qualified to degree level than the private sector, the recently announced cuts could have a disproportionate effect on graduates.
Charlie Ball, deputy research director at HECSU, said: "There are around 39,000 ‘non-frontline’ public sector jobs taken by UK-domiciled graduates annually. I don’t expect them all to be lost, but they don’t need to be to have a significant impact. Even if only a fifth of them were to go and not be replaced, then that would more than double graduate unemployment for the cohort affected in one fell swoop. That would put graduate unemployment over 20% and pushing towards 25%.
"The highest unemployment rate, for graduates six months after graduating, ever recorded in the UK, was 13.5% at the start of 1983. We’re expecting over 10% unemployment next year anyway, and it would not take much of a shock to the graduate jobs market to make the next few years some of the toughest ever experienced. In fact, the loss of around 13,000 of these jobs – a third of the total – would probably be more than enough to make the following year a record graduate unemployment rate.
"If we are to believe the CIPD’s forecast, that 725,000 jobs will be lost in the public sector over the next five years then even if a third of those lost are graduate positions then about 240,000 graduates could lose their jobs in the UK over the next four years. That is equivalent to an entire year’s university graduating cohort."
Ball adds that the regions will face the toughest challenge: "The public sector employs a disproportionate number of graduates outside London, around 86%. So while these roles account for only 17%, or about one in six, of the jobs graduates enter in London, they’re a quarter of those that graduates in the North East and Wales go into. The loss of a significant proportion of the local graduate labour market could have dire effects on these regional economies, and some of those worst effected could be those with the weaker local economies. This suggests that job cuts could drive educated young people away from regions that need to retain them and into the capital, in search of work."
Sarah Shillingford, graduate recruitment partner at Deloitte, said: "We are open to applications from students who have studied any degree discipline. The majority of our vacancies offer candidates the opportunity to study for professional qualifications alongside soft skills training, so a strong desire for development is essential. Overall we look for a well rounded skill set with a strong academic background."
Deloitte recruits graduates throughout the year, and has a wide range of graduate opportunities in audit, tax, corporate finance and consulting. Today (1 July) Deloitte opens its application process for 2011 and are also still recruiting for the autumn 2010 intake following recent increases in graduate positions. Deloitte assesses candidates on a first come first served basis. The first candidates to apply, pass the assessments and hit the Deloitte benchmarks are offered a role.