As far as I know this hasn't been suggested before...

When pro clubs release the graduates who haven't been retained there are games known as 'exit trials' played where lower league clubs can see players and often offer then further trials or contracts.

I think it would be nice if in FM09 or FM10 (as it's a bit late) these games happened during the off season and if you chose to view or send a member of staff to them (as a Blue square Prem or north/south club) then the young players relased from larger sides would be more likely to sign for you, because as it stands it's often a nightmate trying to sign these players without them wanting £600 a week.

The idea in game terms would mean that within weeks if there's been no contact from clubs they retire from football and cleared from the DB. And if there's contact they're much more willing to take a much lower wage or semi-pro contract just to stay in the game.

It would clear up all those players who refuse to sign for clubs because they want silly wages and then retire even though they make the drop down rather then stack shelves IRL.

It's been discussed extensively in the past, as part of huge threads on improving aspects of recruitment etc.
Probably doesn't show up in a search as half the old threads have been wiped.

I'd like it. but only as part of a major overhaul, not as an isolated feature.

I agree, the entire recruitment area does need a proper overhaul.