Nations gain from intern programmes

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A recent report by Reuters highlighted an acute shortage of Gulf graduates, especially in the competitive Saudi Arabian financial sector. As a result, there is a need for companies in the private and public sectors to consider the effectiveness and scope of their graduate recruitment and internship schemes. These can play a beneficial role for both parties if carried out correctly: for graduates and interns, to understand how the real world operates and give them a chance to assess their career interests; and for employers to assess the graduate's abilities before making long-term hiring commitments.

As greater numbers of graduates come on to the market, some companies are not increasing their graduate intake, while others are winding back on such schemes altogether, especially in times of cost cutting. In the advanced western economies, internship programmes and graduate recruitment schemes have played a prominent role, not only in terms of public relations and social responsibility for the companies concerned, but in ensuring there is a continuous flow of fresh ideas and new blood to companies.

Graduates are welcomed to think outside the box while learning from old hands. Mentors ensure that the corporate ethos lives on. In the Gulf, with a few exceptions, such schemes, especially short-term internships, are not a common feature of most companies, which prefer to hire trained professionals. Some argue that they do not have the necessary mentoring skills or capacity in-house to ensure a meaningful internship programme, and that it is far better not to have one instead of going through the motions and causing frustration among all concerned.

This is a valid argument, as it has been observed that the standard of internship supervision has declined over the years for university co-op placement programmes as the number of intakes have risen. Banks in particular have been hard pressed to come up with training programmes that often last up to seven months in Saudi Arabia. Given current earning pressure on bank employees, internship training is probably the last item on senior bank executive's minds. It certainly seems to be the case for some blue-chip western companies that had prided themselves on programmes.

The giant UK telecommunications company BT has become one of the first big-name companies to scrap its graduate recruitment scheme, adding to fears that dwindling job prospects may lead to a "lost generation". BT blamed the economy for the decision to axe the scheme and said there was no certainty when it might start recruiting again. The company is Britain's ninth-largest employer, with 147,000 workers. The numbers of graduates applying for its scheme had grown substantially in the past three years, from 3,800 in 2007 to the 4,800 competing for 130 jobs this year. The decision to suspend the programme is a hard blow for UK graduate employment.

In the Gulf, youth unemployment is high, especially among graduates, and jobs are not being created fast enough to absorb new college leavers. Some Gulf countries, for example Qatar, do not face such a problem, while others with larger and younger populations such as Saudi Arabia admit more should be done. They have sponsored vocational training and placement programmes to ensure that job entrants have the appropriate technical skills needed by the private sector. Gulf governments, like those in the West, are being forced to act urgently to prevent youth unemployment reaching unacceptable levels.

A survey released last month found that the number of graduate vacancies in Britain had fallen by 24.9 per cent this year, much steeper than the 6.5 per cent decline in vacancies in 2002. Information technology has been the hardest hit, with a 44.5 per cent decline in vacancies, says the report, from the Association of Graduate Recruiters. The same trends are being felt in the Gulf, with the once popular IT sector now experiencing graduate unemployment, while interest in chemical, petroleum and mining engineering has risen among graduates. Whatever career choices are being made, competition is becoming fiercer.

The UK association said the market is becoming far more competitive, with 49 applicants for each vacancy this year, compared with 31 for each graduate job advertised last year and 28 in 2006. In some Gulf countries the graduate prospects are just as dismal, despite the Gulf hosting millions of expatriate workers and seeking more qualified foreigners to build their economic infrastructure. The situation is not as simple as it looks, as some have argued that there are more than enough jobs for Gulf nationals if they replace foreigners. The issue is simple: most of the jobs filled by foreigners are not the ones that Gulf graduates would like to do, while many jobs require years of skilled experience.

Building a national skilled labour force takes time. Commitment to quality graduate placement will ensure that appropriate business and work ethics are being instilled at an early in Gulf youngsters, irrespective of whether they stay on with the same company training them or not. The nation as a whole will benefit in the long run. Dr Mohamed A Ramady is a former banker and visiting associate professor, finance and economics at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia