Remember as a young computer science undergraduate, you used to smile indulgently at your wilder college peers who were all doing totally unemployable sociology degrees, while you basked in the knowledge you were studying a subject that employers were falling over themselves to recruit?

You might not have such a big smile on your face if you were back in student digs these days. Not only is there a decline in applications to study IT at university level, it is now back down to 1996 levels.

The class of 2006 seem to face a set of challenges to starting a career that our erstwhile chums in the liberal arts have long been familiar with.

For example, figures from the Higher Education Statistics Agency suggest that computer science graduates had the highest jobless rate last year, with nearly 11 per cent thought to be not yet working or seeking further studying as their best bet.

According to research backed by Microsoft – a special report called Developing The Future, carried out by independent researchers including the BCS – in the past five years, there has been a 50 per cent drop in applications to do computer-related degrees at UK universities.

Such a fall is allied to a 47 per cent drop in systems engineering students, and a 60 per cent drop in software engineering students entering the job market.

According to the report, we are now welcoming 20,000 fewer graduates into the profession per year, at a time when the alleged demand for software developers could be as high as 150,000 new entrants annually.

And while there has been a steep drop in the number of graduates with IT backgrounds entering the job market, employers have also been complaining about the quality of candidates they see coming through the front door.

In the summer, the Confederation of British Industry (CBI) struck what is a depressingly familiar note when it once again felt it necessary to warn the education sector that job seekers do not seem to have been properly equipped to enter today’s highly competitive job market.

The employers’ body says more than a third of adults in the UK do not have a basic school-leaving qualification, while one in three employers is having to send staff for remedial training to learn the English and maths they did not learn at school.

Meanwhile, at the other end of the education process, software and outsourcing specialist LogicaCMG’s chief executive Martin Read has suggested that the cost of a UK science degree should be cut to encourage more young people to study such subjects.

The company, which recruited just 200 UK graduates this year, also said it was intensifying its global recruitment strategies to find more skilled workers.

‘We need the raw material to go on being successful,’ says Read.

The CBI agrees, noting that by 2014 the UK economy will require an extra 2.4 million scientists, but as a nation we only produce about 80,000 science graduates a year.

So we are getting fewer graduates in, on top of which there may be problems with the ones we are getting out. To a certain extent one could say ‘twas ever thus – employers have always had an expectation that they needed to shape entry level people into the kind of workers that could eventually make a real contribution.

Now they may be running out of patience. ‘It is a definite problem, but I don’t think it has that much to do with what the education system is or isn’t doing,’ says Sandra Smith, head of information systems at Toshiba UK. ‘The real problem is that it is getting harder and harder for IT managers to take on entry level people and investing the two to three years needed to get them productive.’

Why are chief information officers (CIOs) not hiring so many graduates?

The first argument is that colleges are not producing the right goods – that they are still, as a rule, not teaching the kinds of languages and technologies today’s IT department needs.

Mohamed Moshaya is a recent software engineering graduate who feels he was not trained as well as he could be.

‘Over the course of the four years, I did a gap year that was not that useful, and probably only one to two terms of actual development in the time, the rest of it was all very theoretical,’ he says. ‘I have studied Java, but I do not think I got enough practical experience with it to be honest, and there was not enough project work.’

Julian Divett is chief operating officer of the firm Moshaya now works for, FDM, a provider of both IT services and training

‘There is just such a big gap between what employers want and what education is providing,’ he says.

‘Partly that is because they do not have the resources, but it is still frustrating to see people coming on to the market with such a lack of hands-on skill.’

It is not just hard-core technical skills that may be lacking, surprisingly. Echoing some of the CBI’s sentiments, Nicholas Mann, managing director of a web design business called Interdirect, says the use of grammar is pretty poor with all graduates, programmers and designers.

‘I’m a bit worried about their ability to communicate on the phone with clients,’ he says. ‘There is a surprising lack of numeracy and literacy and I wonder if we need more emphasis on written English and language, no matter what you are studying.’

But of course, what is probably more at stake here is the issue of offshoring. Essentially, why hire a UK graduate when you can get a more experienced and cheaper equivalent in Mumbai?

The road to offshoring

In the budgetary argument, the skill base of the UK candidate is irrelevant – cost is the driver here. By 2010, the BCS thinks as many as 102,000 IT and software jobs will have been offshored, many of them at the basic programming level that IT degrees have traditionally been considered for.

That is what Toshiba’s Smith believes. ‘I do think it’s down to offshoring and I’m definitely worried we are going down that path too quickly,’ she says.

‘Talking about offshoring as a way of dealing with the skills shortage is like saying more air conditioners is the answer to global warming.

‘We need to see more UK employers taking in entry level people here, and giving them time to gain the commercial skills they need, because surely we can’t let it all go offshore?’

The offshorers, of course, do not see this as their problem.

‘The whole economy is moving to a global delivery model, to access labour wherever it is needed,’ says Arun Aggarwal, European head of consulting for Indian outsourcing giant Tata Consulting Services.

‘Senior executives in IT especially have grasped that this model is robust, mature and successful. The opportunity for the local worker is to try to join the global model where he can, as nearshoring and other forms of resourcing are growing, too.’

Fine, but not everyone is so sanguine about this development.

‘The UK is going to fall further and further behind in the economic race,’ says Matthew Bishop, senior director in the development and platform group at Microsoft UK. ‘We are seeing more and more jobs disappearing in what is one of the fastest-growing areas of the economy, the software or IP-based economy – see box, page 23. This is especially worrying given the growth rates in IT skills and graduates in other parts of the world.’

Bishop’s message: ‘Offshoring is a legitimate tool, but you cannot offshore everything, so look to what you can take from the UK market that will benefit you.’

Basis enough for the CIO to justify restarting the graduate trainee programme, you may think. But perhaps there is a more down-to-earth reason.

‘The reason we hire graduates in the first place is the ability to shape them into what we need, so they become part of the culture,’ says Richard Chorley, associate director of IT recruiters Computer People.

‘The great thing you get back from that is loyalty and commitment. Of course there’s a chicken and egg issue – experience versus qualification – but we can’t ever lose sight of that benefit.’

Whatever the shortcomings of the class of 2006, it seems, we must find a way to ensure they still get a chance. After all, one of them could be you in 10 years’ time.