Venetia Thompson and Rory Sutherland say that the era in which all graduates want to work in the financial sector is at a close: a splendid time to rebrand inactivity as ‘travel’
University careers fairs have always been a complete waste of time. In the old days students came away armed with nothing more than ABN-Amro highlighters and miniature alarm clocks (probably now collectable), some unusable minute RBS Post-it notes, and perhaps the odd snow-shaker. Goldman Sachs, Morgan Stanley and their cohorts quickly ran out of all paraphernalia — but no matter because everyone wanted to be a banker anyway. Even hapless blondes who hadn’t studied maths, economics, business or anything vaguely related, still wanted to be in banking (trust us, we have inside information on this one). They were from a generation which had grown up thinking that careers were simply divided into law and finance.
Even students who had never balanced an equation, barely passed maths GCSE, never read the FT and had no clue what a bond was could still end up ensconced on a trading floor: because that was the sort of place the City was throughout the 1990s and early Noughties — joyously up for grabs to even the most mathematically challenged.
But the City is no longer a world that everyone with a vague desire to make money can stumble into and embark on a career. More to the point: they don’t want to. The City is suddenly as out of fashion as it was three decades ago.
In the 1970s almost all glamorous jobs (spy, astronaut, detective, test-pilot, Concorde engineer, nuclear scientist, doctor, New Avenger, Jason King) seemed to be in the public sector — at least judging by what you saw on television. The single role for the private sector in Seventies TV drama was villains, something which applied even to American-made programmes. Possibly the most poisonous piece of anti-capitalist propaganda ever made in the West must be the series of Scooby-Doo cartoons, in every episode of which a healthy private-sector plan to create something useful on the site of some abandoned property is ruined by the arrival of some pesky interventionist kids. The same anti-commercial bias was seen in Skippy, Flipper and even Star Trek, the last depicting a kind of bizarre post-capitalist world where the state even decided what you wore. It was only in the 1980s, with the appearance of The Dukes of Hazzard and The A-Team, that television finally introduced young people to some attractive libertarian alternatives.
These same swings of fashion seem mirrored in the world of work. In the 1970s it was considered far cooler to leave university for a job with the National Coal Board than to work in a bank, and in the Thatcherite late 1980s, the phrase ‘selling out’ was widely used to describe any job that involved cutting your hair and wearing a suit.
After a short period of geek-chic during the dotcom boom, we have seen a decade or so where the naked pursuit of self-enrichment was considered perfectly respectable, and where gruelling working hours were considered a badge of honour. We suspect this was beginning to change even before the banking collapse.
Which brings us back to 2009. The Financial Times has already remarked on the recent return of beards, commonly seen as an implied rejection of the corporate world. Even among the clean-shaven it’s likely that the irresistible pull which the financial world exercised over graduate recruitment won’t be seen for a few years to come and George Soros will finally get his wish: the overblown finance sector is shrinking.
In turn, there will only be enough investment banking jobs for those graduates who have genuinely spent every waking moment of the past three years reading the FT, partaking in internships at every opportunity, and studying yield curves in their sleep.
But do these graduates even still exist? Fiona Sandford, director of the LSE’s careers service, notes that ‘those students that have always been truly committed to pursuing a career in finance are still truly committed’, but are now realising that they need ‘a plan B, plan C and a parachute’ if they fail to get a place on their first-choice graduate programme.
But with student attendance at Oxford University’s Finance Careers Fair down by 10 per cent last October, it also appears that some of the country’s top students’ career plans might be shifting, with roughly half of all Oxford graduates entering into careers in education and health, while most of the remainder continue studying and only around 4 per cent going into banking.
Finance no longer has the pull that it once did and students are thinking more long-term, no longer blindly believing that they can go into the City and retire in their mid-thirties.
This change is probably welcome news, especially for Londoners. The assumption over the last decade that the only conceivable future for the capital was to become a kind of bloated version of Frankfurt has led the government to pamper the financial sector at the expense of other industries where Britain should also have a comparative advantage — technology, engineering or the newly named ‘creative industries’, for instance. The graduate bias towards working in finance was also exacerbated by high property prices, since for a few years first-time property in much of London has been unaffordable to anyone else. Falling property prices are good news for London — since what distinguishes truly great cities is not only the scale but the diversity of businesses which they support. Single industry towns are seldom interesting places to live.
It’s not all good, of course. Many graduates will now have to endure periods of extended unemployment before finding permanent work amid tens of thousands of pounds of student debt, while also having to compete with the recently jobless. Even this, of course, has some benefits. As one political policy adviser said recently, ‘You can never say this publicly, as it is considered unsayable, but it’s not necessarily a bad thing for people to spend a year or so after university messing about in the job market while they work out what they want to do with the rest of their lives.’
The advertising agency Ogilvy was founded by a man who only entered advertising in his forties after a life spent as a chef, an Aga salesman and a tobacco farmer: for this and several other reasons the agency recently decided that they would no longer restrict their graduate scheme to recent graduates, but would welcome applications from people who have worked somewhere else first. In a similar move, the advertising trade body the IPA created a two-hour online exercise (www.diagonalthinking.co.uk) partly to allow people looking for a change of career later in life to find out if they might be suited to the industry.
The beginnings of the potential new bias towards the public sector has resulted in Teach First (www.teachfirst.org.uk), the charity set up six years ago to pump willing top graduates into the nation’s most troubled secondary schools for two years of teaching, seeing a 93 per cent increase in the amount of applications they are receiving compared with a year ago. Many of these graduates have come straight out of Oxbridge or other Russell Group universities, and competition for places is now, ironically, almost as fierce as it is for the Goldman Sachs graduate scheme, with 1,760 applicants competing for 473 teaching places, and the charity having to find 140 extra jobs, such was the high calibre of applicants that they were seeing last December. They cannot meet demand, and they’re not even offering free pens, let alone snow-shakers, champagne-fuelled lunches or six-figure bonuses — just an average first-year salary of £18,000 and invaluable experience.
And what of the private sector, which can’t dangle the feel-good factor of teaching extremely disadvantaged children in fr
ont of graduates? In a world where working insanely hard may no longer bring disproportionate financial rewards, we may see companies attracting talent with other perks in place of larger salaries. In a list of the best places for young graduates to work in the US, Northrop Grumman (hardly a bunch of guitar-strumming hippies) was highly placed for its readiness to offer employees every other Friday off work. Google is famous for allowing staff 20 per cent of their time to work on projects of their own choosing. To a generation brought up with technology, the idea of spending 40 hours a week in an office seems faintly absurd.
The large salaries are of course still out there, but in unexpected places. Lidl, home of Christmas lebkuchen and endless jars of gherkins, will be paying graduates lucky enough to win a place on their training scheme £40,000 — more than most investment banks are currently offering. But they will also have to drive an Audi A4 and live with the job title of ‘discount retail executive’.
For those stranded in unemployed limbo twixt the private and public sectors, there is always that clever bourgeois trick of rebranding inactivity as ‘travel’. If the City’s law firms are actively encouraging their trainees to disappear for a year before starting work, in exchange for up to £10,000, then maybe it’s time for all young people to spend a year sitting around in an unwashed state smoking on a beach in Thailand while the fog clears, and leave capitalism to China and India. There has never been a better time for a gap year.
The banking world will eventually recover in years to come, and may finally choose to broaden its own recruitment, since the extreme homogeneity of banking culture seems to have contributed to its dangerous lack of self-censure. But whether there will be any graduates still interested in the industry when there are so many other opportunities emerging from the dust is unknown.
This article first appeared in the print edition of The Spectator magazine, dated March 21, 2009