Unemployed graduates: We were promised jobs

Rosie Olley is “spending all day, every day, trying to get a job”. It’s not going particularly well. “I check employers’ and recruitment websites, I’ve been emailing potential employers direct and using all the family and industry contacts I can think of,” she says, “and it’s all leading nowhere.” The only interview she’s had was through a recruitment agent, “but the firm changed its mind and said it might have a vacancy in January. It’s soul destroying”.

Olley, 21, has just obtained a first-class degree in building surveying from Reading, after which she joined the ranks of the nation’s unemployed graduates. The government’s Higher Education Careers Services Unit estimates that between 35,000 and 40,000 of the 350,000 people who left university this year will fail to find a job within six months of graduating. Like many others, Olley has had to move back in with her parents – “which feels like a step backwards” – and she is worrying about how to pay off the £10,000 debt that studying has left her with.

This is not what she planned: “When I started the degree, the course leader pretty much promised us a job. He said we’d be sorted – particularly because we would have a qualification from Reading, which is known for surveying. Since then he has apologised to us.”

When she started studying three years ago, construction firms were desperate to hire any graduates, let alone those with first-class degrees, and people like Olley had their pick of jobs. Since then swaths of people have been laid off – there have been 170,000 redundancies in the industry in the year to August, according to the Office for National Statistics – which has made it difficult for firms to make a case for hiring graduates. As we’ll see below, some of the industry’s biggest employers have cut their graduate programmes and others have suspended them. It is easy to understand why the young people that the industry made such an effort to attract to built environment degrees feel betrayed.

Building surveyed 604 graduates from construction-related degrees to find out how many are giving up on the industry and which professions are the worst hit. Here we asssess the extent of the damage and whether anything can be done to stop a generation of skilled young people slipping through our fingers.

Surveying the damage

Building asked the Higher Education Statistics Agency to track the number of people studying for architecture, building, planning and civil engineering degrees.

The irony is that the figures show the success the industry has had in attracting young people – from 22,620 graduates in these degrees in 2007, the number has risen to an estimated 36,000 this year. A couple of years ago, those graduates would have walked into jobs, many of them collecting golden hellos on the way. Now, however, of the 604 built environment graduates that Building questioned, 61% of them did not have permanent, salaried employment and 24% expected to be claiming unemployment benefit in September.

Michael Brown, the deputy chief executive of the Chartered Institute of Building, is well aware of the problem. He says a survey by his organisation found that “only 1% of respondents said their companies were recruiting the same levels as before the recession. Five per cent of respondents said they were already making graduates redundant and more than 60% had slowed or ceased recruitment”.

The types of graduates least likely to have a job were those who studied architecture, building surveying or construction management. Graham Watts, chief executive of the Construction Industry Council, says this reflects wider industry trends. “Architects are involved at the start of the construction process, so they have been feeling the effects of the recession for longer. They also tend to do a lot of work in the sectors worst hit by the downturn – commercial, retail and industrial. Building surveyors also work at the start of the process. Although that’s not the case for construction managers, I expect graduate places for them to be down in line with the overall fall in vacancies.”

So what are the unemployed graduates going to do? It seems certain the construction industry will lose many of them. About 27% are considering working outside construction. The most popular alternatives were banking and teaching.

Thirty-eight per cent of construction managers and 37% of architects said they would consider looking for work outside the construction industry, making their professions the most likely to lose talent.

The professionals least likely to look outside the built environment were QSs – only 13% said they would. One quantity surveying and construction management graduate, Michael Kleios, 21, has launched his own non-construction business. He says: “I’m not the type of person who could just sit around unemployed waiting for the industry to pick up again.”

The good news is that only 1.5% of the graduates surveyed said they planned to quit construction permanently. Of the two-thirds that thought they would not get a job in construction during the recession, just under half planned to study further, 32% said they would work temporarily in another industry and 26% said they would go travelling.

Those most likely to seek shelter in another industry were construction management graduates (43%). In the other professions, the most popular option was to do further study: 67% of architects, 44% of QSs and 40% of building surveyors said they would do this.

Olley is among those thinking of a round-the-world trip. She says: “I’d really prefer to get a job in the industry – I’m dying to get stuck in – but if it doesn’t happen soon I’ll go travelling.”

When it came to debt, half of those surveyed owe more than £10,000 and 16.5% owe more than £20,000. Unsurprisingly, architectural graduates, who tend to study for longer, were the most in debt: 28% were in the £20,000-plus bracket.

Despite all this, only 7% of our graduates said they regretted choosing a construction-related degree. Anil Joshi, for example, a 21-year-old building surveying graduate, says: “Times are tough in the construction industry right now, but I have wanted to work in construction since I was a kid and that won’t change.”

Those that did regret their choice tended to be in the professions worst affected by the recession so far: 12% of architects wished they had studied something else, as did 9% of surveyors.

What can be done?

The recession of the late eighties and early nineties cut the industry’s numbers by about half a million people, including graduates. Sir Michael Latham, chairman of ConstructionSkills, says the industry lived with the consequences of that for about 15 years. Indeed, there is still a dearth of people in their 30s and 40s. Latham says we could face the same gap at middle management level 10 years from now.

In the shorter term, Latham says: “If graduates are not taken on now, when the upturn comes in a year or two, firms will be short of trained staff and therefore less competitive.” This gap can be filled, as it was in the past, by drafting in recruits from countries such as Australia and Malaysia. But Latham points out that people with homegrown skills “have been trained specifically in British laws and conditions”.

Watts adds that the other problem is that a skills shortage causes inflation. “Salaries will go up as competition to recruit people intensifies. Therefore the cost of the job goes up and you end up with a constant, cyclical problem.”

Some employers are still taking on graduates, although few are signing up the same volume as in previous years. Mace, for example, took on nine recruits this year, rather than the 38 it brought in last year, and has dropped its £1,000 joining bonus. Trina Sollis, the company’s head of learning and development, says not hiring now would mean “having to go out to the marketplace” later, and Mace wants to put people through its three-year graduate training programme so they are well versed in how the firm does things.

Sollis is not convinced by the argument that firms can’t take on graduates at the same time as they are laying off staff (last year Mace made over 75 redundancies internationally). “We have to bring new talent into the industry,” she says. “And we must protect our industry from other sectors that are trying to recruit – some sectors are hiring more than usual because they know graduates have fewer options. Also, graduates are not paid as much as many of those being made redundant.”

Latham says firms should also consider whether they could take on graduates to send overseas. “Young people tend to like working abroad,” he says. Another option is to offer them unpaid internships. Michael Sullivan, chair of the RICS’ QS and construction faculty, says: “Our policy is to encourage young people to spend time in the building industry, even if at first they are not paid.”

The idea is to keep them feeling enthusiastic about the sector, as well as giving them training that will benefit both them and the industry later. He adds that internships can be part-time where employers don’t have sufficient workload, which would also allow them to do part-time work elsewhere.

Latham says he understands that many firms are simply not able to take on graduates in any shape or form. So could anything else be done? There are not a huge number of ideas floating around, but a couple of initiatives offer some hope.

Westminster university has launched a scheme that offers training to unemployed built environment graduates. It won funding for the Build Up scheme from Westminster council and the Higher Education Funding Council for England’s Economic Challenge Investment Fund. Trainees with Build Up, which was launched this summer, will receive free training in a wide range of subjects, from Passivhaus construction to accounting and negotiation skills. The programme appears to be the only one of its kind so far, however, and it has places for just 1,500 graduates, so more schemes are needed in order to have a significant impact.

There is also the government’s Graduate Talent Pool initiative, launched on 10 August, which aims to encourage UK employers to create internships (if unpaid, the intern would still be eligible for job seeker’s allowance) and advertise them for free at the Graduate Telant Pool website. It already has 3,741 internships advertised (including 1,806 paid ones). But towards the end of last month, the site had only five built environment-related vacancies. The employers offering them were London consultant John Rowan & Partners, Cambridge consulting engineer Prior Associates, the Ministry of Justice, the Royal Engineers and Kidderminster-based renewable energy specialist Eco2Solar.

With only these piecemeal measures in place, Watts says what is needed is a “structured programme to help graduates find work in the construction industry”.

Such a programme could arrange internships and voluntary work, for example, carrying out building projects for charities, and it could put graduates in touch with the areas of the industry that are still busy – or will be soon – such as education, civils and nuclear.

Such a scheme would no doubt help graduates like Olley, who are spending huge amounts of time firing off CVs to companies, becoming more and more disillusioned all the while. Until any such programme materialises, Olley looks set to continue to send those emails. She says: “My friends and family keep reminding me I have a first, and I am ahead of the game. Unfortunately, due to the recession, it just doesn’t feel like that.”