One in six employers won't hire young people

Derivative

Reactor wrote: »

You could get £76k (£50k premium over average £26K) straight out of Uni at 21, but it would be a combination of salary and bonus. No doubt you'd need a first from Oxford or Cambridge to have a chance.

Along with a general interest in my career path besides the renumeration, indeed this is my motivation when I wake up to books of equations on a Sunday morning.

Reactor wrote: »

Accounting for the 3 years lost work is important as it's an opportunity cost. If you've not got into a graduate scheme, then you are just another person with no experience looking for a job. My point being you'll be earning less than someone who has been working for 3 years, who has left college at the same time as you, doing the same job. Plus they won't have the cost of university.

Ah, this makes your point a bit clearer. Yes, this is true if you fail to get onto a grad scheme. However under the new fees you'd not have to pay back much if anything, you need only worry about the 'lost' 3 years.

Bearing in mind you're working straight from GCSE/A-level, you'll be lucky to get bottom rung jobs and any savings you manage to accrue will be small.

I think it's a bit of a toss up over whether 3 years in unskilled work looks better on a CV than a decent degree (and contrary to what abaxas thinks, I'm pretty sure anyone of sound mind can tell a STEM degree from a redbrick from Media Studies at an ex-poly).

edit: This is bearing in mind I'm not a recruiting manager and do not have experience of sifting through CV's. I'm only inclined to say that I'd view candidates with a degree in higher stead than someone who worked at Tesco for three years.

Reactor_2

abaxas wrote: »

If you want the best balance you leave school at 16, take day release for A levels and university.

You are then 23/24 with a degree, 7/8 years of experience and money in the bank.

Takes a strong willed person to do it though. But you'll destroy any other applicant for the job.

I had a friend that got an apprenticeship after college and the company then paid for him to get a degree at Uni. I think he got a good deal, but don't get me wrong, this is his potential and he is not all of sudden going to destroy all other applicants in other jobs he applies for.

princeofpounds

The time and money you spent on your degree should be the same amount of time and money it takes to earn it afterwards. This will create a break-even scenario.

So if you take a 3 year course and net it costs you £50k, then you need to earn net £50k over 3 years to say you've broken even with your investment. If it takes longer, then you know you've wasted your money.

No. This is totally the wrong way of looking at the time value of money, although you capture the opportunity cost.

A better way to do it would be to estimate the capital cost of going (including missed earnings) and value that against the prospective increase in the stream of earnings from graduation until target retirement date. You would discount those future earnings to the present value using an appropriate cost of personal capital (working out what that is is the hard bit!).

A discounted cashflow model, if you wanna google it ;-)

Anyway, the point of all this is that you don't just want the investment to pay back in three years alone as that disregards all the benefits of the next three decades (which are the important, if difficult-to-estimate, benefits).

Derivative

Above post encapsulates what I was aiming to say much more precisely.

I tend to think the risk of not getting onto a grad scheme is just something you take on when you decide to go to University, you could call it a medium risk investment.

Besides the fact that for many, University is a place for social and personal development, learning how to manage your own finances and how people cope under stress - the existence of this forum is testament to the fact that doesn't come naturally to everyone.

[Deleted User]

abaxas wrote: »

Aghghgh

My head is going to explode.

The league tables have NOTHING TO DO WITH THE VALUE OF THE EDUCATION PROVIDED.

There mere existence of the league table effects the perceived value of the degree.

And perceived value is what is used by HR.. so they are useful.

Otherwise - how do you decide that a psychology degree from York is better than one from Bolton? Do you look at the research output of the departments? That's never quite an indication that the teaching is any better.

At the end of it, university is a self-taught system. If you've been in a classroom for 3 years being spoon-fed then you did the wrong degree.

Reactor_2

EdgEy wrote: »

Along with a general interest in my career path besides the renumeration, indeed this is my motivation when I wake up to books of equations on a Sunday morning.



Ah, this makes your point a bit clearer. Yes, this is true if you fail to get onto a grad scheme. However under the new fees you'd not have to pay back much if anything, you need only worry about the 'lost' 3 years.

Bearing in mind you're working straight from GCSE/A-level, you'll be lucky to get bottom rung jobs and any savings you manage to accrue will be small.

I think it's a bit of a toss up over whether 3 years in unskilled work looks better on a CV than a decent degree (and contrary to what abaxas thinks, I'm pretty sure anyone of sound mind can tell a STEM degree from a redbrick from Media Studies at an ex-poly).

edit: This is bearing in mind I'm not a recruiting manager and do not have experience of sifting through CV's. I'm only inclined to say that I'd view candidates with a degree in higher stead than someone who worked at Tesco for three years.

The angle I'm coming from is getting an office job. I'll provide an example.

JPMorgan has a site in Bournemouth where a majority of it's operations in Europe are done from. You can get a job there without a degree. You don't even need A levels.

So if you are lucky you can get in at 18, straight out of college. I think the starting salaries are around £13k. If you get in on the grad scheme in Bournemouth, you get around £26k. Clearly if you didn't get in on the grad scheme you'll have to start on £13k.

An average person who left college at the same time as you and worked in JPMorgan for 3 years will be on more money than you, if you have just graduated from uni, but didn't get in on the grad scheme.

Also the grads do the same work as the normal employees, except they have more options to jobs, which in JPMorgan means working anywhere in the world. Obviously, more is expected from the grads than the normal employee.

For an entry level job, the manager recruiting will have more than enough resources to know if candidates are suitable for a job, so a person with only 3 years work experience at Tesco's might be more desirable than someone with a degree, because they are good speaking to clients and can take pressure. The other factor is staff turnover: no one wants an employee that doesn't stick around.

The reality is that most jobs can be learnt: it's whether you get the opportunity.

[Deleted User]

Arcaine wrote: »

Thanks, just found out I went to the 80th out of 115 in the uk, guess my degree is worth naff all, although I did suspect that anyway based on my results. :cool:

21st out of 90, not bad for getting in on clearance! Shame I got a 2:2.. doh. Feels harsh since i was only 1% off a 2:1. Never mind, got a 40k+ job after about 7 years out of uni

Reactor_2

princeofpounds wrote: »

No. This is totally the wrong way of looking at the time value of money, although you capture the opportunity cost.

A better way to do it would be to estimate the capital cost of going (including missed earnings) and value that against the prospective increase in the stream of earnings from graduation until target retirement date. You would discount those future earnings to the present value using an appropriate cost of personal capital (working out what that is is the hard bit!).

A discounted cashflow model, if you wanna google it ;-)

Anyway, the point of all this is that you don't just want the investment to pay back in three years alone as that disregards all the benefits of the next three decades (which are the important, if difficult-to-estimate, benefits).

I know how to work out a valuation based on discounted cash flow, but you don't need to as the reality is, if there is payoff to going to uni then it is realised sooner rather than later, which will increase the value of future cash flows.

If your degree is going to give you an advantage, you should notice it straight away, for example getting you onto the graduate scheme. If you didn't need a degree to do the job, then what value did doing the degree have?

I think the reality is that the majority of graduates will be earning less than £26k a year once they graduate, doing jobs that don't require degree. I also think the government is doing students a favour by increasing fees as they will now need to think if you are going to get a payoff as their debt will stop them living the life they want if they get it wrong.

I think it's another simple question to answer as it's just like like the beautiful girl or extremely attractive guy: they know they are good because they get constantly told and have the validation. If you don't have the validation of your academic success, then it might be worth giving uni a miss.

On a slight tangent, I was watching CNBC and they think the next credit crisis will stem from defaulting student loans as graduates are unable to find good enough jobs to pay back for the degrees they have obtained.

Derivative

Reactor wrote: »

On a slight tangent, I was watching CNBC and they think the next credit crisis will stem from defaulting student loans as graduates are unable to find good enough jobs to pay back for the degrees they have obtained

This is indeed something that worries me too. Credit crisis might be a bit overblown though.

I'd like to see figures on just how many students are expected to pay back their loans so far under the current system.