Degree of uncertainty

That much-vaunted university qualification may not be the open door to a life of permanent and lucrative work that many students expect. It's tough for even the brightest to break into today's job market, reports Lucy Hodges

It has taken Leo Goldsmith, 22, more than nine months to find a job – and even then it is only a two-month graduate internship with the advertising agency, Lowe Lintas. It may lead to nothing. But Leo, an Oxford graduate, is pleased because it at least gives him some hope.

His experience shows how difficult it is for even the best and brightest to break into today's jobs market. "I didn't have a clue what I wanted to do when I left Oxford," he says. "I had done some music journalism at university. I thought about the law... but then I met some lawyers. None of my family went to university, so I don't have the connections that some people do."

After his degree in history and English, Leo spent a year at Liverpool University getting a Master's in Business Administration.

Altogether he has applied for around 70 jobs in music marketing and publishing. In March he signed up for some work experience with a small record label in Oxford, and asked Oxford University to start sending him its careers letter, which contains graduate schemes. That led directly to his new assignment. "I am glad I stuck it out. It's as though the extra work experience turned round my fortunes."

Leo's experience illustrates the difficulty graduates are having in the new and increasingly flexible job market, particularly if they want to enter what are loosely called the creative industries. The competition is intense. Students have to be extraordinarily organised and committed, as well as personable and articulate. "There are jobs in the media but you have to be dedicated to get there," says Mike Hill of the Careers Services Unit.

Students completing their degrees this summer are entering a job market that has been radically changed by recent events. Many of the glittering opportunities of the late Nineties have gone. Vacancies in investment banking and management consultancy have completely dried up because of the downturn in the financial sector, according to Anne-Marie Martin, the head of London University's careers service. And the lucky few who did have offers with investment banks or consultancy firms have had them withdrawn.

"Generally speaking, it's a bit gloomy, though not as gloomy as the last big recession in the late Eighties and early Nineties," she says.

Another industry that has died a death is telecomms. And the IT sector is sluggish, she adds. "It isn't dead. There are still jobs out there – but there are nothing like the numbers there were."

The result of the falling off in these four areas is that the putative investment bankers have shifted their sights to accountancy. The wannabe accountants are now looking at retail banking, and your run-of-the-mill graduate, who is competent but doesn't know what he or she wants to do, has been squeezed out.

That is one reason why things are tough for the average graduate who tumbles out of university. The downturn was apparent before 11 September, but the New York and Washington terrorist attacks accelerated it.

Each summer, the Association of Graduate Recruiters (AGR) publishes a survey of the graduate jobs market. This year's, which is coming out next month, is expected to show that the trend is down, but only by a small amount. "Graduates who have got clear career ambitions may find it will take them longer than it would have taken in the past to enter the job they want," says Carl Gilleard, AGR's chief executive.

But it is not all gloom and doom. New research published today by the Careers Service Unit shows that graduates can earn almost 40 per cent more than their colleages without a degree. One bright area, according to Andrew Whitmore, the assistant director at the University of Manchester and UMIST careers service, is the retail sector. With British consumers indulging in a big shopping spree – and there is no end in sight – the high-street stores are in recruiting mode. Companies looking to hire range from the Body Shop and Boots to Marks & Spencer and John Lewis, as well as the giant grocery supermarket chains such as Tesco and Asda.

Another booming industry is construction. That means there are jobs working on railways, roads, hospitals, airports, bridges, office buildings and leisure centres. The reason is that the Government is doubling investment in infrastructure to almost £60bn over three years. And the public sector is buoyant. Jobs in teaching, health and the police are plentiful. In some cases they are also better paid than you might think – and they come with proper salary structures and pensions.

There are mixed messages coming out of manufacturing. Companies such as Ford and Land Rover are recruiting slightly more young people than last year, according to Ms Martin. And pharmaceutical companies are still doing all right.

But, overall, the message from the experts is that the job market is changing. According to Richard Pearson, the director of the Institute for Employment Studies, a lot of young people do not necessarily want to go straight into a career. They want to take time to go round the world, do temporary work and get their heads straight. Five or 10 years ago the market was much more structured. The change is making for much more flexibility and openness on the part of employers and young people.

Graduates should not be deterred from chasing their dream job. Yes, it's a more complicated and patchy market than the one we had before. And if you are set on a particular job in a high-profile area such as the media, you should prepare well and do a lot of unpaid work to test whether you really are suited for it.

But it is safe to say that a degree is still a passport to a good job, so long as you really work at it. The good job does not arrive on a plate. The evidence shows that graduates will always get further once they have got in. But in the creative industries, a degree won't necessarily get you in.

education@independent.co.uk

'I feel that my degree was a complete waste of time'

When Alice Smyth, 23, graduated with a degree in English from University College London she had high hopes of a decent job. Don't all the statistics show that it pays to get a degree? But a year on she is wiser and more chastened. Her job applications fell on stony ground. She wrote off for jobs in public relations, as a press officer and as a scene of crime officer at the Metropolitan Police. In many cases, she never received a reply; in others she was told to get experience."I didn't think I would have this kind of problem," she says. "I didn't think you would have to work so hard to get something."

After leaving UCL last summer she has had temporary work in market research and as a tutor to a pupil at home. Market research pays £6 an hour and is a useful fallback. But she says: "I never thought I would be doing this kind of work."

She has become an expert at fare dodging on the suburban routes from her home town, Leigh-on-sea in Essex, to London, and at scavenging for discarded travel cards. She has also signed on at the Jobcentre in Southend.

What she really wants to do is to write novels. In fact, in between her temp jobs in the past 12 months she has written a novel – about student life, based on her own experience of living in Tottenham, north London, in her second year. Earlier this year, she undertook a course in teaching English as a second language so that she could teach abroad. It took several months to land a job, but she is now off to teach in Shanghai, China, for a year. "If I like it, I will stay on," she says. "If I decide to come back, I will at least have more to put on my CV and will be a bit more employable."

Her friend Beth Simpson, 23, also studied English at UCL and has had similar difficulties getting work. After graduation she was lucky to secure a three-month contract with BBC Scotland as a runner for a quiz show. She hoped that would lead to more such contracts but it didn't. She returned to her family home in Cambridgeshire and signed on at the Jobcentre, thinking that it would only last a few weeks. Instead it lasted six months.

"I've applied for hundreds of jobs," she says. "I started off applying for BBC jobs, which is what I really wanted. I got a few interviews and lots of rejection letters. I then sent off 20 to 30 letters to production companies and heard back from two."

Because she was getting nowhere she lowered her sights and began to apply for jobs as an usher in cinemas and theatres but was rejected because she was overqualified. She has now produced a "dumbed-down" CV which leaves out her three A grades at A-level and her GCSE grades. "I honestly think I would have been better off leaving school at 18 and going straight into work," she says. "I feel my degree was a complete waste of time."

The one good thing is that she has now got a job as an assistant producer on Sky TV's home shopping channel.