The people of the United Kingdom have voted to leave the European Union in the referendum which took place on June 23rd 2016.
Currently, much of the talk around the potential impact of Brexit is speculation, and so we are going to try to provide some clarity in relation to the potential effects on the internship and graduate job market; as we know that a number of students are concerned on how Brexit will affect their chances of getting an internship or graduate job domestically, or abroad.
A survey conducted by Path Motion – based on responses from HR managers and senior executives of 75 top UK graduate employers prior to Brexit – demonstrated that 49% of top graduate employers were likely to lower their intake of graduates in the event of a leave vote. Scary right?
The study suggested that the sectors which are most likely to downsize their graduate hire are Banking & Finance, Media, Retail, Technology and Law. Whilst the sectors which are less affected are the Civil Service, Education, Oil & Energy, Engineering & Industrial, Consulting and other public bodies.
Whilst negotiating Brexit over the next few years, it is a very real possibility that UK companies may no longer be able to hire EU graduates for free. This has led 25% of employers to state they are likely to increase the hiring of British graduates. This is likely to provide an advantage to British graduates.
There is also a question mark on whether EU students will be facing financial barriers for enlisting at UK universities. EU students have previously been charged “home fees”, which are the same as British citizens. However, Brexit may force EU students to pay international student fees, in which annual tuition can increase to higher than £35,000.
If this were to be the case, then it may reduce competition for British students in the internship and graduate job market as less EU citizens decide to study here. However, a number of UK based universities, in areas like Bristol, Dundee and Leicester, have been quick to state that they will support their EU students.
Brexit has resulted in economic volatility, and is likely to continue to do so over the next few years. Economic volatility can lead towards recession. The prospect of a UK recession can send shivers down the back of even the most confident of students. We understand that fearing what the impact of an economic downturn could have on the number of internship and graduate opportunities is a real, and valid concern.
The Guardian has reported a quote from Samuel Tombs, the chief UK economist at the thinktank Pantheon Macroeconomics stating that, “Britain’s shock vote to leave the EU has unleashed a wave of economic and political uncertainty that likely will drive the UK into recession.”
Recessions in the UK have historically resulted in a decreased graduate intake for larger companies. We understand this certainly isn’t music to the ears of many students in the UK looking for internship or graduate schemes. However, there is another avenue to consider, which is graduate and internship schemes at start-ups.
As start-ups begin to re-evaluate their hiring strategy, the business owners are likely to see hiring via an internship, or graduate role as a more attractive, risk-free option. Historically, economic volatility has resulted in some of the World’s most successful companies starting up. Microsoft launched during the recession of 1973 after the oil crisis. Studies have found that start-ups founded during periods of recession are more profitable.
Hiscox’s DNA of an Entrepreneur study – which combines company results across 3,500 businesses from across the UK, Germany, France, the Netherlands, Spain and the US – demonstrates that the UK’s recession start-ups are more likely to hire new employees, with 21% hiring new staff. If Brexit is to lead to a recession, as some economic forecasters are predicting, then there are likely to exciting graduate opportunities available at start-ups across the UK.
In the wake of Brexit, there are a number of benefits to British students in their search for an internship or graduate job. Firstly, the competition for internships and graduate jobs may decrease for British graduates as companies show preference to British citizens in order to avoid fees. Also, many EU students may not be able to afford the prospect of international student fees – reducing competition for places.
If Brexit should send the UK into a recession, then don’t be concerned should the graduate intake at large companies decrease. Instead, look towards exciting start-up internship and graduate opportunities – which are historically likely to increase graduate intake during periods of recession.
Dupsy Abiola – Founder & CEO of Intern Avenue – commented on the Brexit situation stating, “times of uncertainty can often bring great opportunity. There are potential downsides to leaving the EU for the job market, namely the threat of multinationals moving their jobs away from the UK. However, students and graduates should look for industries showing signs of growth on the back of the Brexit vote in the coming months, as many could be set to flourish due to the removal of regulations in their sector.
With 25% of large employers stating that they could increase their recruitment of UK graduates, due to the likely new barriers of hiring European candidates, UK graduates now have the distinct advantage of certainty over their European peers.“
Intern Avenue will continue to find the most exciting internship and graduate job opportunities as the events of Brexit unfold.
We have many internships and graduate jobs in a wide variety of sectors available now – check them out!