When recruiters from big companies visit university campuses these days, they take a lot more than a Pow-erPoint presentation and a glossy brochure with which to attract the best students. Accountancy firm Price Waterhouse Coopers offers the chance to learn how to count to 20 in five languages or make a dog out of balloons in five minutes, while the energy company Npower has a £10,000 prize for bright sparks with ideas on how to tackle climate change.

“Students expect skills workshops or events or something else more than a talking head,” says David Ainscough, deputy director of Cambridge University Careers Service. Employers need to work hard because competition for the top graduates is strong in many sectors. The economic downturn means, however, that in areas such as banking, those leaving university in 2009 could find it difficult to get on the career ladder.

Employers have a long tradition of using outside agencies to help them to attract graduates and technological advances have seen more of the process being handled by recruitment outsourcing (RO) firms. RO staff may work in the client’s offices alongside the in-house human resources team or in an off-site service centre. In each case, candidates are unlikely to know they are dealing with a third party. That doesn’t matter if the service provided is good, says Antho-ny Hesketh, deputy director at the Centre for Performance-led HR at Lancaster University.

“For the large employers of graduates, there aren’t enough hours in the day to sift through the thousands of applications they get. If you’re a smart HR manager, those processes can be put out to another company,” he says.

Some employers outsource everything except final interviews and selection, while others keep all interviewing in-house but get RO companies to do the initial screening and testing of candidates plus the administration of arranging interviews and sending out rejections or invitations to the next stage.

The keys to success, says Hesketh, are a good relationship between client and provider and a clear understanding of who will do what. When it works well, there are advantages for everyone involved. Employers benefit from the expert advice – and cheaper delivery – of a specialist recruiter that is up to date with market trends. Candidates get a faster, more consistent service.

Jayne Houlihan, head of resourcing at the bank Abbey, which outsources graduate recruitment to Hays Resource Management, agrees that the RO provider and client must strive to work together seamlessly. Many of the Hays team work in Abbey’s offices. “Quite often people have no idea who is from Abbey and who is from Hays,” she says. “It doesn’t matter who is paying the salary bill. What’s important is that the business model works as a team.”

Hiring at retail banks, insurance companies and the big four accountants appears to be holding up, although competition for places will be stiffer. “We are expecting applications to be of a higher quality,” says Houlihan.

Final-year students who have set their hearts on a career in investment banking may be in for a rude awakening, however. Ainscough says that unless they did an internship in their last summer holiday, acquiring the work experience expected by top investment banks, the next round of graduates is likely to be “a generation lost to banking”. There are already signs of a downturn, says Ainscough: “Students who have done numerical tests are not hearing whether they’ve got an interview and we are hearing that some graduate schemes are full, even though it’s before their deadline.”

Recent redundancies from Lehman Brothers, Citigroup and the merged Bank of America/Merrill Lynch mean student jobseekers will be competing with unemployed young bankers, who have already had the benefit of a graduate programme. The squeeze in investment banking, traditionally an employer of the brightest talent, will make the competition for jobs tougher in other sectors, too, as would-be bankers are forced to seek alternative careers.

The Association of Graduate Recruiters remains reasonably optimistic. Carl Gilleard, chief executive, says a straw poll of members suggested that 40% are planning to hire the same number of graduates in 2009 as this year, 20% are hiring more, 20% fewer and 20% don’t know.

The strongest sectors are engineering and utilities.

Tom Mason, head of outsourcing at recruitment firm Hudson, believes that employers won’t abandon graduates: “Companies learnt their lesson from the slowdown in 1992-93, when they stopped hiring graduates and then found they had a skills gap a few years later.” But Alexander Mann Solutions, which handles graduate applications for many large employers, is less sanguine. Clodagh Ban-nigan, head of graduate recruitment, expects hiring to be down 25%.

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