BT pulls the plug on grad scheme

Will the telecoms giant live to regret its decision to axe its popular graduate recruitment scheme?

by
Last Updated: 31 Aug 2010

BT said this weekend that it has decided to close down its graduate recruitment programme for the foreseeable future, as part of its general cost-cutting drive. Although most companies have been trimming back their schemes this year in the face of the recession, BT is one of the first to ditch it altogether – which is bound to heighten concerns about what’s going to happen to all those poor grads about to head out into the big wide world after university. But as far as BT is concerned, the big worry is what this will do to its employer brand in the longer term…

BT has one of the longest-established and most popular grad schemes in the country – last year it had nearly 5,000 applications for its 130 roles, so it can’t have been struggling to find people. But with BT desperately trying to get its finances in order after the huge losses incurred by its much-maligned Global Service division, it’s on a mission to cut costs: it’s already announced 15,000 job cuts, and clearly the grad scheme has been earmarked as another potential saving. And since the alternative is presumably making some more of its current staff redundant, you can see the argument: not hiring is a lot easier than firing, after all.

BT may be the first big firm to scrap its graduate intake altogether, but lots of other companies are cutting back too: according to the Association of Graduate Recruiters, the number of vacancies is down by about a quarter this year, with graduates facing a lot more competition for jobs. It’s already clear that young people are bearing the brunt of the recession – given that one in six 18-24 year-olds are now out of work – and this suggests the problem’s going to get worse before it gets better (hence today’s calls from the CBI for the Government to spend £125m subsidising apprenticeship schemes).

But the move could land BT in trouble further down the line. For a start, it could find itself lacking in management talent in a few years’ time – as did many of those companies who slashed graduate recruitment after the dotcom bust. And when it starts to recruit again (assuming its finances do eventually pick up), it may find that graduates are not so keen to join an organisation that is willing to jettison its scheme when times get tough. It also seems a bit odd that it’s ditching the scheme now, just as the economy seems to be picking up a bit. Presumably it’s had to prioritise short-term survival over the long-term implications for its brand...


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