Graduates without work experience will be left out in the cold

Over one third of entry level jobs will go to graduates already involved with companies.

Many soon-to-be graduates will be left without a job due to lack of work experience, new research suggests. High Fliers’ The Graduate Market in 2013 report, released today, declares that of all entry level vacancies available for 2013, over a third will go to those who have already completed internships or work experience for the company.

The toughest fields to get into without having experience are banking and law, it has been revealed. This may well be, but what happens when these internships are so fiercely competitive that they are practically impossible to come across?

In the legal profession, university students have the option to apply to take part in a vacation scheme: a two or three week paid work experience that provides insight – and contacts – in a law firm. However, Jack Denton, co-founder of the research website AllAboutCareers.com, estimates that for approximately 3,150 places on the schemes nationwide, there are more than 12,000 applicants.

Three thousand schemes might seem like a generous amount, but when one considers that most students who secure one work placement also manage to achieve at least one more in another firm, these get swallowed up very quickly by a fairly select bunch.

As former Labour minster Alan Milburn pointed out in his 2009 report, Fair Access to the Professions, law is one of the “most socially exclusive” fields to work in, and firms’ “closed shop mentality” means that connections, and ‘who you know’, is often prioritised above talent. It is unfortunate that this attitude isn’t limited to the legal profession.

Managing director of High Fliers Research, Martin Birchall says:

“This latest research confirms that taking part in work placements or internships whilst at university is now just as important as getting a 2.1 or a first-class degree”.

So what other options are available to those who haven’t managed to secure this ever-important addition to their CV?

With most core Universities offering hundreds of societies which welcome the participation of anybody and everybody, there is no excuse for not getting involved. It is not, either, impossible to go one step further and assume a volunteer role in the committees of these societies. Invaluable budgeting experience could be gained in the role as treasurer, for example, organisational skills for social secretaries and management skills for presidents.

Students need to make the most of opportunities that are there for them,  before it is too late and all that can be done to beef up the CV is to work tirelessly for free in the hope that one pitiful employer might eventually hire you for, you know, real money.

Or, following Adam Pacitti’s recent example, entry level aspirators could make their own opportunities. This 24-year-old Portsmouth University graduate spent his last £500 on a Camden billboard begging employers to ‘Employ Adam’. Inspired, huh? He is looking for a job in the creative field of television production, so let’s hope someone takes a punt on him soon and ends the unemployed misery of at least one former student.

But it’s not all bad news for the next generation to leave university. The outlook is good for the 2013 graduate job market, with an expected increase of 2.7 per cent. Perhaps that will go some way to reduce the approximate 50 per cent of graduates from last year who are under- or unemployed.

Hold on to your hats - graduate employment is a bumpy ride. Photograph: Getty Images
Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR