January 2011 Archives

UK inflation reached an almost two year high last month with the consumer price index (CPI) 3.7% higher than a year ago. The Bank of England target is for the CPI to rise by an annual rate of only 2% and December was the thirteenth month that the target had been breached.
 
Inflation has been boosted by soaring energy costs and rampant global food prices, and with the VAT hike this month and commodity prices continuing to rise, the outlook is for inflation to break through the 4% barrier this month. Even core inflation (which excludes taxes and highly seasonal items such as food and energy) is rising at a rate of just under 3%.

The inflation outlook has produced a policy dilemma for the Bank of England. Under different circumstances the Bank would be aggressively pushing up interest rates in order to choke off inflationary pressures. But the Bank has been holding down interest rates in order for the UK economic recovery to take hold, with the hope that inflation would subside in the medium term. But the recent spurt in inflation threatens to undermine the Bank's strategy.

The Bank of England's Monetary Policy Committee has been split over when the next interest rate should be. It now looks likely that the first interest rate hike will take place in the summer of 2011, which will be followed by a series of rises throughout the rest of 2011 and 2012.

Research published this week suggests graduates are facing a tougher time than ever when it comes to finding a job or securing a place on a grad programme.

According to the survey, two thirds of employers say candidates with no prior work experience are "unlikely to be successful" during the selection process and "have little or no chance" of being offered a position on their graduate programmes.

Furthermore, at least half of entry-level vacancies at investment banks and law firms are likely to be filled this year by graduates who have already completed work experience with the employer.

So, is it true that work experience is now an absolute prerequisite rather than a nice-to-have? And what about experience within the hiring organisation - does that leave an open door for a candidate?

Surely there's hope for canny and academically proven graduates who might not have previous work experience? 

As we flagged up late last year, employers are increasingly driven to handle their graduate recruitment in different ways.

Another example of this has come to light, in the form of KPMG's new scheme for school leavers, in which the company will pay the university tuition fees of around 75 school leavers, who will spend the next four years studying accountancy and working at KPMG.

At the end of the four years, the candidates will have a degree, an accountancy qualification and an open door for a role at KPMG. In turn, KPMG gets its hands on 75 newly-qualified, clued up candidates who have spent four years embedded in the company.

The scheme targets bright young things who might be put off further education by rising costs, and who would therefore be excluded from traditional graduate programmes.

It has understandably been welcomed by the Government, and could be the latest in a long line of alternative graduate recruitment methods dreamed up by big business.

Is this the future of graduate recruitment in the corporate world?