As we return to another academic year, horror stories of a collapsing global economy dominate the financial news.
As we return to another academic year, horror stories of a collapsing global economy dominate the financial news.
As we return to another academic year, horror stories of a collapsing global economy dominate the financial news.
AIG, Freddie Mac and Fannie Mae have been taken over by the US Federal Reserve. Lehman Brothers have filed for bankruptcy whilst Merril Lynch has been bought out by the Central Bank of America. This overhaul of the financial system has sent shockwaves throughout our globalized economy.
And so the question arises how does all of this affect graduate careers?
According to the Central Statistics Office (CSO) the economy contracted by 0.8% in the second quarter of this year compared with 2007, which means that the economy is technically in a recession for the first time since 1983.
In the financial sector we are due to see some great upheaval. The merger of Halifax Bank of Scotland with Lloyds TSB has been rumored to be axing more than 3,000 jobs both here and in the UK. The recent turmoil in Wall Street is expected to oust 40,000 people from their jobs worldwide. The affects of these events will slowly filter down to the Irish job market which as of yet has remained largely unaffected by recent events in the financial markets. A major concern to Irish business is the rising cost of production. We have seen many firms close such as Tyco in Cork citing high wage costs and costs of production as reason for closure.
Mixed news prevails for business students. Accountancy remains among the top recruiting sectors in the country with the big four accounting firms alone planning to recruit over 1000 graduates in 2008. Whilst the banking sector is expected to reduce its graduate recruitment by 15% this year.
Graduates stemming from computer science, arts and media studies face a more challenging future. Unemployment rates for these sectors range from 8% to 10% for the year 2007. Dell is planning a contraction of its production base here in Ireland; Hewlett Packard plans to cut its global workforce by 7.5% whilst many technological firms have defected to Eastern Europe and India. With “conservatism in IT spending” rife throughout the industry many graduates may be forced to look abroad for job opportunities. Those with arts or communications degrees are in the most vulnerable position. During a recession there is a contraction in the service industries where many of these graduates will end up.
On the other hand for everybody down in the Hamilton things don’t look so bad. Powerful industries such as alternative fuel sources, bio and medical technologies, ICT and pharmaceuticals are quickly gathering momentum. The high demand for fuel, the fact that oil is a finite resource and a drive for a cleaner environment has boosted investment and research in alternative fuel sources. Exxon Mobil has invested $20 billion this year alone into researching new sources of energy. Environmental engineering is also a developing industry with great prospects. Also science graduates are often recruited by financial firms due to their high analytical skills.
Graduates from a career specific course such as medicine, dentistry, and engineering have very low unemployment rates. Many find a job within the first six months of graduating.
The healthcare industry has to date been little affected by the recession. The employment of doctors and in particular nurses has remained high due to the opening of Centers of Excellence around the country. However the closure of wards in many hospitals has caused employment to fluctuate. Unemployment rates for healthcare professionals are exceedingly low at 0.2%.
Small businesses though more vulnerable to market fluctuations may become a more attractive option to graduates. As the Federation of Small Businesses (FSB) Chairman John Wright commented on the publication of the latest FSB survey: “Small business owners know their greatest asset is their staff…By having a committed and loyal workforce… [Even] the smallest business has a big advantage.” Although smaller enterprises may have fewer vacancies they may be more supportive of individual needs and suggestions. As smaller enterprises tend to be more flexible, they can rapidly shift their focus to adapt to changing circumstances. They are able to respond quickly to any market fluctuation thereby reducing the need for redundancies.
Graduate prospects are not all doom and gloom however depressing the future may seem. Graduate Careers Ireland found that 71% of the 211 employers it questioned said they expect to recruit the same number of graduates this year as in 2007. However just 2% said they planned to increase graduate recruitment levels this year. Many firms suffered with a talent dry-spell during the recruitment freeze of 2001 and so will continue to hire graduates to ensure a consistent flow of talent when the market picks up.
The Graduate Market Report 2008 is reporting more of the same. It claims graduate vacancies will rise by 16.4% with finance based firms planning to take on 14.7% fewer graduates. The report also shows that almost half of the organizations featured in The Times Top 100 Graduate Employers plan to expand their graduate programmes this year. According to Irelands Leading Graduate Employers Report, the top ten firms are Price-Water-Coopers, KPMG, Google, Deloitte, AIB Group, Bank of Ireland, Civil Service, Ernst & Young, Accenture and Intel.
