Employers wipe out debts with gold hellos

September 5, 1997

GRADUATE employers are gearing up to pay off student debts in the race to secure the best recruits.

Mike Killingley, executive member of the Association of Graduate Recruiters, said companies in the finance and management consultancy sectors were planning new starting packages. "As part of the reward offered, employers are likely to take over student debts as a significant inducement," said Mr Killingley, a senior manager with Midland Bank.

Denis Walsh, BT recruitment manager, said his firm was taking on 800 graduates this year. "We have thought about a golden hello and one of our divisions is very keen indeed. We could well end up going that way. The pressure will be intensified when others start making offers." BT is the United Kingdom's largest recruiter of graduates.

Rebecca Snow, graduate recruiter at Mars, said the idea was being discussed and was probably inevitable in the longer term. "Recruiters have to start thinking about new incentives and the golden hello is certainly one option. Schemes like student sponsorship will get new impetus."

Roly Cockman, chief executive of the AGR, said the practice was likely to snowball once the first announcement was made. The AGR has opposed such a move in the past. "There are great pressures on employers to pay off student loans, particularly as the competition for graduates becomes more fierce," he said.

Mr Cockman said the introduction of fees would aid firms in recruiting graduates. "Fees will improve the screening process as they will deter those students who do not have the ability for degree level study," he said.

However, Mr Cockman pointed to concerns among employers that demand for graduates in some areas would outstrip supply, particularly in IT-related subjects, as a result of fees. To head off shortages of recruits companies were likely to step up sponsorship deals with students, he said.

Another shift was that students would be likely to enter employment before embarking on university study, said Mr Killingley. There was concern about finances, particularly in the banking industry which had seen the results of student debt. Rather than students working part-time while studying full-time, it might make more sense to do it the other way round.

At this week's conference of the Association of Graduate Careers Advisory Services Sir Ron Dearing stressed the importance of universities working more closely with employers.

Careers education, page 40

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