A job-market recovery finally may be under way for this year’s crop of college graduates. However, a new survey by global outplacement consultancy Challenger, Gray & Christmas Inc. indicates that the job prospects for these grads are about the same or only slightly better than last year’s dismal outlook.
Continued weakness in the entry-level job market could force many newly minted graduates to accept lower-paying service sector positions or forsake income entirely by volunteering or accepting unpaid internships. Others may abandon the job search, opting to further their education, live at home or travel.
In the Challenger survey, about half of the human resource executives polled said the outlook for this year’s college graduates is roughly the same as last year. Twenty-eight percent of respondents were marginally more optimistic, saying that the outlook is slightly better than a year ago.
On a positive note, less than 10 percent of respondents felt that the job market for this year’s graduates would be worse than last year. Meanwhile, nearly 13 percent said the job market is “much better” than in 2009.
The survey was conducted among approximately 100 human resources professionals in a wide variety of industries nationwide. The two-week survey concluded the first week of April.
Last year was an extremely tight job market for entry-level candidates. Even if this year is slightly better, the competition for available jobs will remain fierce. In fact, some of this year’s graduates may very well compete with some of last year’s graduates for positions.
They will also be competing with other young people, who received their diplomas within the last five years, had jobs and found themselves back in the labor pool once the recession hit. These recent job seekers could prove to be the toughest competition for this year’s graduates, as they are likely to accept entry-level wages yet bring some on-the-job experience to the table.
In the overall job market, there are more than five job seekers for every opening, based on the latest data from the Bureau of Labor Statistics showing that there were about 2.7 million job openings at the end of February and about 15 million unemployed Americans. These figures do not even account for the estimated 2.4 million 2009-2010 graduates, who entered the job market this spring armed with associate’s and bachelor’s degrees.
This is not to say that recent graduates should give up hope. There are opportunities out there, but entry-level job seekers will have to dig for them. They may have to look outside of the industry or career path they envisioned pursuing immediately out of college. They may need to look in parts of the country they might not have considered previously. They will have to look beyond the on-campus job fairs.
Many seniors are probably already finding that on-campus job fairs are not providing many opportunities. On-campus recruiting has improved only slightly in recent months.
A monthly index compiled by the National Association of Colleges and Employers finds that, on an index scale of 0 to 200, recruiting activity rated an index score of 97.3 in February, up from 92.6 in October. However, any rating below 100 still represents an expected decrease in activity.
The number of companies that went during the spring semester to recruit business graduates at the University of WisconsinMadison was down 9.6 percent from a year earlier. However, that was an improvement from the fall/winter semester, when the number of on-campus recruiters was 25 percent lower than the previous school year, according to a statement provided to Challenger researchers by Steve Schroeder, assistant dean of the school’s undergraduate program and the director of the Business Career Center.
“We had a much busier spring semester than expected. Typically fall semester is the busier time and spring tends to be a bit lighter. While our fall was busier than spring, spring was busier than what we normally see. This aligns with what we have been seeing nationally as the economic recession is getting better,” said Schroeder.
“We anticipate hiring in the fall of 2010 to pick up and the number of companies already committed to coming to campus in September and October confirms that,” he added.
Schroeder had more good news for this year’s graduating class:
“In regard to job postings, we are up 20 percent over last year. This indicates that companies still have great opportunities but are not been able to come directly to campus to interview students. The past 18-24 months have been difficult for college graduates, but most indicators point to a better 2010 and beyond.”
According to the Challenger survey, the graduates with the best chance of employment success are those with degrees in health care-related fields, such as nursing, physical therapy, pharmacy sciences or medical technician specialties. More than one in four respondents (26.3 percent) felt that these graduates would enjoy the most success.
Those earning a business degree were considered to be in the best position for this job market by 18 percent of respondents. Meanwhile, degrees in accounting/finance, engineering and computer science, which used to be considered surefire paths to employment, each received just 10 percent of the votes for offering the best chance of job-search success.
Engineering, computer science and accounting may no longer be the fastest path to employment, but they are among the most lucrative. A recent survey by the National Association of Colleges and Employers found that eight of the top 10 best-paid majors are in engineering, with the highest-paid petroleum engineering graduates starting at $86,220. Computer science ranked fourth in the NACE survey, with graduates earning average starting salaries of $61,205.
A high starting salary is no guarantee of job-search success, however. NACE found that only 42 percent of engineering graduates found jobs in 2009, compared to 70 percent in 2007.
Some recent graduates are less concerned with starting salaries. In fact, they appear to be more willing to work for free if it means getting their foot in the door and obtaining valuable on-the-job experience. Unpaid internships used to be held primarily by those still in school. In today’s job market, recent graduates and even experienced job seekers are more willing to take these unpaid positions, and companies are more than happy to oblige.
The Atlanta Journal Constitution recently reported that the number of companies attending job fairs at Emory University remained nearly unchanged. However, university officials told the paper that the number of companies recruiting full-time employees was down by about 10 percent, while internship recruiting increased by about 25 percent.
Reent graduates may also consider volunteering at nonprofit organizations.
As the job market continues to improve over the next couple of years, those who can show some work experience are going to be in a better position than those who abandoned the job market entirely.
For those who feel that opportunities are nonexistent, the best option may be a return to school. However, for many this is not an option financially, and they may simply return to live with their parents until steady income can be achieved.
Among 2009 U.S. college graduates, 80 percent moved back home with their parents after graduation, according to a report by CollegeGrad.com. That was up from 77 percent in 2008, 73 percent in 2007, and 67 percent in 2006.
The percentage of graduates returning home could reach even higher this year, as new graduates compete with last year’s graduates and other more experienced job seekers for available positions. We may even see young people who have been out of school for two or three years and had jobs and apartments returning home following a layoff.
John A. Challenger is chief executive officer of Challenger, Gray & Christmas Inc., the global outplacement consultancy that pioneered outplacement as an employer-paid benefit in the 1960s. Challenger is a recognized thought leader on workplace, labor and economic issues.