Graduate milk round dries up

Almost half of British firms have no plans to hire any of the hundreds of thousands of teenagers and young adults who will join the jobs market in the next three months.

The survey found only one in six firms will offer jobs to 16-year-olds and one in three will recruit 18-year-old school and college leavers.

The bleak picture extends to university students, where just 49 per cent of companies plan to offer jobs to new graduates despite their new degrees. In addition, one in three employers say they have already cut the number of graduates they recruit annually. With dole queues expected to reach three million by the end of the year, newly unemployed 16 to 24-year-olds are expected to form a large proportion of the increase.

The survey suggests that young job-hunters have a slightly better chance finding work in the public sector, where 57 per cent of employers plan to hire university leavers and 39 per cent plan to recruit 18-year-olds.

In an effort to ease the impact of the recession on new graduates, the government has announced plans for universities and colleges to arrange more than 2,000 internships and work placements. Others are being urged to improve their qualifications by taking career development loans of up to £8,000 to pay for postgraduate study.

But both the Chartered Institute of Personnel and Development (CIPD) and KPMG, which carried out today's survey, warned that new job-hunters would have a tougher task than for many years.

Gerwyn Davies, public policy adviser at the CIPD, said: "It is going to be a long, hot summer for many of this year's graduates and school leavers, as they sweat over their chances of finding work. Employers have for a long time had doubts about the employability skills of those leaving education, and this year's crop face employers in a more choosey mood than ever before. Against this backdrop, graduates and school leavers need to sharpen their case for being picked ahead of their classmates – and fast."

He advised youngsters to "get work experience, demonstrate a broad range of non-study related skills and generally market themselves hard."

Ruth Elwood, KPMG's head of recruitment, urged undergraduates to start looking for work while still studying for their finals.

She said: "The reality is that it is no longer enough to start thinking about jobs once exams are over. The signs are that this has been getting through. Graduate schemes have been filling up earlier than probably ever before. Those who do not already have a place for September are unlikely to find one now – or not in their first choice profession."

At the other end of the age range, companies said workers aged 65 and above more were less likely than any other group to be hired. One in seven employers said they would exclude older workers – whether they already in jobs or not.

Eight per cent also said they would exclude migrant workers.

The study says there is tentative evidence that the "worst of the jobs cull might be over". Monthly increases in unemployment could therefore be less steep in the second half of the year than in the first six months.

But it warns: "The scale of the current increases makes it inevitable that around one in ten people in the jobs market will be unemployed by spring 2010 and that unemployment will exceed three million."

It discloses that almost one in four employers will freeze wages in the next three months because of the "intensity and ferocity of the recession, while one third will limit pay increases to two per cent or less. More companies are also reducing employees' working hours.