Graduates turn their backs on careers in the City

The global economic crisis has led hundreds of elite graduates to eschew careers in finance in favour of lower-paid but "safer" jobs such as maths teaching, it emerged yesterday.

Far fewer students are turning up to City and financial job fairs held as part of the annual university "milk rounds" to help graduates find jobs when they leave. At Warwick University, for example, the number of students attending its City and finance fair just before Christmas was 1,425, down from 1,988 the year before. At Oxford, the head of the university's careers service, Jonathan Black, reported a "10 to 15 per cent" fall in attendance. Cambridge, too, saw turnout drop by 14 per cent from 998 last year to 866 – and hits on its website for City and finance sector jobs fell by 18 per cent.

Gordon Chesterman, the head of the university's careers service, said: "Students are becoming suspicious of the sector. By the time they returned in early October, they had heard war stories from their chums who had had internships in the sector and not been offered jobs. They had also read headlines in the press about 120,000 white-collar jobs going in the finance sector and thought, 'I've got my suspicions'."

Instead, young people are increasingly opting for careers seen as "safer" – such as teaching, the Civil Service and law. Teach First, a scheme which recruits high-achieving graduates to work in deprived schools, saw more than 2,000 students applying for its 450 places by the end of the year.

"Recruitment normally ends in the spring," said a spokeswoman. "In 2007, we had 2,000 applicants by then – but in 2008 we had reached that figure by the end of the year."

Other winners in the recruitment stakes at Cambridge include a maths teaching post in a private school in London which attracted 154 expressions of interest this year, compared to 75 the previous academic year, and a technician post at the BBC which saw a 200 per cent increase in applications.

The fall-off in demand for finance sector jobs comes as the country's top investment banks have whittled down the number of "milk rounds" they attend at universities to just a handful of the top research institutions.

It could be quality, not quantity, that the banks are seeking. Warwick – one of six universities still on most investment banks' hit-lists – recorded an increase in the number of financial institutions attending its fair this year from 61 to 68. "They appear to be focusing specifically on where they think they will be able to recruit the brightest recruits," said a university spokesman. "They find that in a downturn, more than at any other time, they need the brightest students to keep abreast of things."

Other institutions still in the loop for recruitment include Oxford, Cambridge, the London School of Economics, Imperial College London and University College London. However, the move by investment banks to cut back on the university job fairs they attend provoked an angry response from representatives of the UK's newer universities.

Pam Tatlow, the chief executive of Million+, a think-tank representing the post-1992 universities, said: "It is high time that City firms caught up with the rest of society and valued graduates from all UK universities.

"Elitist and potentially discriminatory practices have existed for much too long. To narrow the recruitment pool even further is a disappointing response to the economic crisis."

Wes Streeter, the president of the National Union of Students, said: "Given the high level of debt currently being accrued by students because of fees, the news that their job prospects will be diminished owing to the economic downturn will be extremely worrying for those who are prepared to graduate in 2009."

Case study 'I really wanted to do something that would make a difference'

For Rhys Parry, going into teaching was "literally one of the best decisions I've ever taken".

Mr Parry joined the Teach First scheme, which pitchforks high-flying graduates into disadvantaged schools and is now one of the most popular options for students taking part in the annual university "milk round".

The 26-year-old contemplated a career in finance or translation services with his degree in modern languages but opted for teaching instead. "To be honest it was hard to know what to do," he said. "I really wanted to do something that would make a difference."

The economic crisis, he believes, may have prompted a change of thinking among many of today's top graduates.

Mr Parry, who taught modern languages at Parklands High School in Manchester for two years before becoming a spokesman for teachers on the scheme as their participant president, thinks there is "a case to say that harsher economic times bring the concepts of social action and responsibility into sharper relief".

As far as his own teaching experience is concerned, he said: "You can see the difference you have made to a pupil – a child who starts from a disadvantaged background who you then see starting to engage with education.

"Nothing compares with the moment you first see a pupil or class of pupils engage with, or even enjoy, your hard-planned lesson," he added.

He rejects any suggestion that those who have opted for teaching want an easy life. "Teach First and the teaching profession will prosper not because it is a 'safe haven' but for its value both for the individual and for society," he said.

In any event, Teach First can equip students with leadership skills which will stand them in good stead if and when the economy takes a turn for the better.

Pros and cons: Teaching versus banking

SALARY: The starting salary for a teacher is £20,627, whereas investment banking staff can start on £45,000. The highest-paid headteachers earn just over £100,000 a year, while senior investment bankers earn millions.

HOLIDAYS: Nigel de Gruchy, a former leader of the National Association of Schoolmasters/Union of Women Teachers, described the seven-week summer break as "the last perk of the teaching profession", but research shows that even with the long holiday, they can work an average of more than 50 hours a week over the year as a whole. In the banking sector, annual leave is rather more modest (six weeks per year is considered a good deal) but you could well be burning the midnight oil at the office.

PENSION: A teacher will retire on an index-linked pension based on their highest salary and there is much more chance of them making it through to a pensionable age. Bankers, of course can be made redundant at a moment's notice – an estimated 120,000 white-collar banking jobs will vanish this year.

WORKING ENVIRONMENT: Here's the rub. In teaching, you are likely to have a class of about 30 pupils and there is a high probability (97 per cent, according to recent research) that at least one will be persistently disruptive. However, they are unlikely to stab you in the back – as can happen in the world of banking.

JOB SECURiTY: As we have already said, it can be a bit of a lottery in banks, whereas only yesterday Christine Gilbert, the chief executive of the education standards watchdog, Ofsted, was calling for a tougher focus on weeding out "boring" teachers. Her comment followed claims by the General Teaching Council that not enough schools and local authorities disciplined poor teachers.