Good news for graduates: help is at hand for university leavers struggling to get jobs in the recession. Former student Andy Shovel has launched Recruitment Squared, a business which he believes can combat graduate unemployment — and, three months in, it is already in profit.

Recruitment Squared offers employers the chance to “try before they buy” and, as Mr Shovel puts it, “this takes the risk away from companies, making it more financially appealing for them to hire”.

London-based Andy Shovel, 22, graduated from Nottingham with a degree in business and geography last year. He says: “When I left university I realised that companies don’t want graduates in a recession. They have dropped in terms of a company’s priorities. They are expensive to train and are a risk because they haven’t got a proven professional record to fall back on.

“There are so many talented candidates out there but they are finding it so hard to get in with a company.

“You need to be more imaginative to find work and offer employers a more palatable proposition.”

There are so many talented candidates out there but they are finding it so hard to get in with a company. Andy Shovel

Mr Shovel’s business allows firms to try out interns on a two-month basis — the right amount of time, he says, for companies to assess a candidate’s suitability without free-loading. “It takes between one and two months for the candidate to get to grips with the firm, so it isn’t really worth a reputable company’s time to take somebody on just for the sake of it.”

So employers get help at little cost and obligation, while graduates get a foot in the door.

“We are careful to insist that the potential employer signs up to an agreement that the internship will last no longer than two months and the candidate will then have to be given formal employment if things have worked out between them.

“The idea is to make the process a more buyer-led, results-orientated proposition in the current climate.”

The government has launched schemes to boost graduate employment, notably its Graduate Talent Pool — a graduate internship initiative — and the more recent Future Jobs Fund, which is injecting £1 billion into sectors such as social care, education, tourism and sport in order to create “soft jobs” and work experience opportunities for young people. But Mr Shovel argues that these schemes do not address the core problem.

“They are not doing anything to make it cheaper or easier for firms to hire but just repackaging the graduates and plonking them on what is effectively a glorified advertising board.

“This government has conclusively demonstrated their inclination towards an ‘act now, think later’ disposition.

“One could argue that most of these so-called ‘soft jobs’ are being created in a hurry and, as such, there will be no clear framework for personal development and promotion. Perhaps a more sensible approach would be to work with companies to make the young and unemployed more appealing. Incentives could be offered — perhaps companies that take on a number of new employees through the scheme will be subject to a slightly lower rate of national insurance.”

Recruitment Squared, which cost Mr Shovel £800 to set up, is already in profit. Although reluctant to disclose numbers, he says: “We are doing very nicely, with many of our placements looking like they will result in permanent positions.

“Going on evidence from the past couple of months, I think the growth will be quite fast.”

He has received thousands of CVs to date, hardly surprising given that graduates are competing in one of the most difficult job markets in decades. According to the Association of Graduate Recruiters, around 49 graduates are battling it out for each graduate job, up from 30 this time last year.

But Mr Shovel believes there are still plenty of vacancies. “It’s easy to get drawn into hysteria but there are jobs and there are growing sectors.” He cites energy efficiency as a “defiantly growing. There also seem to be a lot of IT companies wanting graphic designers. I think there are a lot of staple companies for whose demand has not been significantly affected by the recession.”

Graduating last year, south London-based Mr Shovel went to work for a start-up drinks company. “The academic side of university and school never really engaged me that much; I was always off doing other business ventures. There was a small team of us at the drinks company so I kind of helped build that up. It gave me a good idea of how a really small company operates.” He then started developing a business plan for Recruitment Squared before launching in May.

“Fortunately, I have very low overheads. A friend of mine built the website — that was about £300; plus rent on my small office in Hammersmith; incorporating the company, which was around £50; and other little bits and bobs. I didn’t want to start saddling myself with a huge investment.” It means almost all of the revenue that comes in is profit.

“I told myself that I would never do something with a big pile of investment as you could lose everything you’ve made. I want to have something that grows organically and doesn’t need a big leg up with money.”

He recruits graduates for companies at no cost and only takes a fee if the placement is successful after two months.

“Our rates for full-time recruitment are lower than the market rate, so the whole package adds up in terms of credit crunch appeal.”

The jobs crisis in numbers

£25,000 a year – average frozen starting salary
48 – applications per job, up from 30 last year
900,000 – number of people aged 18-24 out of work
2.4m — total unemployment
£5bn — invested by the government to help people find jobs in the downturn