Employers toy with golden hellos to ease student debt

一月 23, 2004

Employers are preparing to offer more "golden hello" payments to graduate recruits and other financial incentives such as interest-free loans to help them recover from large debts accumulated in higher education.

Major recruiters gathered at an Association of Graduate Recruiters conference on the higher education agenda this week said such moves might be necessary to attract top graduates if the government succeeded in introducing top-up fees.

Although the AGR said it was likely that a growing number of recruiters would consider such measures to stay competitive and alleviate graduate debts, a poll of more than 200 employers found that most who expressed an opinion nevertheless favoured students contributing more to the cost of higher education. Asked if it was right that students should contribute to their studies according to their ability to pay, half said they should, 31 per cent disagreed, and 19 per cent were unsure.

The survey also found that most employers who responded believed that the UK was producing too many graduates. Nearly two-thirds thought the expansion of higher education was having an adverse effect on graduate quality.

While some employers are concerned about student debt, two-thirds think there are positive benefits to more students having to work their way through university.

Recent initiatives designed to better prepare students for the workplace appear to be having some impact, with employers equally divided on whether universities are developing graduates with the right skills for employment in the 21st century. Previous surveys have found the vast majority of employers of the opinion that graduates do not have the right skills.

Carl Gilleard, the AGR chief executive, said a high proportion of recruiters responding to the survey would have had recent experience of higher education and were therefore in touch with what it was like to be a student and graduate.

He said: "I think the response says that if we are to get better quality in our higher education system, we need more funding, and it is not unfair to expect those who benefit most from university to make a contribution."

Many employers recognise that students leaving university with large debts will need help to cover the cost of starting a new career.

"I can imagine that quite a few of our member companies will want to offer golden hellos or interest-free loans as a way of ensuring that they attract the best candidates and that new recruits are not distracted from their work by financial worries," Mr Gilleard added.

John McElwee, head of graduate recruitment for Marks and Spencer, said:

"Some companies are already offering golden handshakes, and I think it is something many more will be considering. It remains to be seen whether that is enough to encourage people to go to university in the first place."

Helen Bostock, vice-president and head of graduate recruiting for JP Morgan, said: "The key issue for us is whether student debt will affect the diversity of candidates. That is an unknown."

Alan Johnson, the higher education minister, told the conference there was a strong economic case for continued higher education expansion. He said that most growth would probably take place in modern universities, despite claims that variable fees would hamper them by creating a two-tier system Mandy Telford, the president of the National Union of Students, said top-up fees could leave many students so poor that they would not be able to afford a suit or to travel to job interviews.

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