The Slow Economy Has Employers Putting The Brakes On Perks
Tuesday, May 27, 2008PAUL KANGAS: The end of May is traditionally college graduation season, which means thousands of new graduates will be joining the work force or so they hope. The slowing economy has many graduates worried that they won't be able to find a job. As Dana Greenspon reports, there are still entry level jobs to be had, but the perks may not look the same as last year.
DANA GREENSPON, NIGHTLY BUSINESS REPORT CORRESPONDENT: American University graduate Emily Thomas hopes her degree in environmental studies will add some green to the world and to her wallet. But first, she needs to get a job and so far, finding one hasn't been easy.
EMILY THOMAS, AMERICAN UNIVERSITY GRADUATE: It's a lot tighter job market and so there's a lot more competition. I know people applying for the same jobs that I am, so it's a little tense.
GREENSPON: Thomas isn't alone in feeling tense about her job prospects. Sue Gordon is a career counselor at American. She says the slowing economy is the number one worry among this year's graduates.
SUE GORDON, CAREER ADVISOR, AMERICAN UNIVERSITY: I think there's a higher anxiety this year that I'm seeing. When a student sits across the desk from me is that they're just -- they're worried about the economy, whereas in the previous several years, that hasn't been a concern.
GREENSPON: Gordon says most industries are still hiring, even in the financial sector. But she has noticed a troubling pattern -- salary cuts, in areas ranging from the non-profit sector to finance.
GORDON: Our undergraduate business students are still getting offers, but this year, there aren't signing bonuses, whereas in the past, there have been. So that's another trend we're seeing. So there are still jobs, just maybe not quite as much money as the students might have hoped for or expected.
GREENSPON: Not all salaries are slumping. Salaries for some engineering jobs are up significantly over last year. But many jobs, including those for accountants, teachers and management trainees, have seen cuts in entry level pay. To new graduate Chris Chester, those numbers are more than just statistics. He is still looking for a job in public affairs and has been surprised by the advertised salaries.
CHRIS CHESTER, AMERICAN UNIVERSITY GRADUATE: I'm looking at jobs in New York and California and it doesn't really seem like they're offering the kind of salaries that you could live on in the city.
GREENSPON: Employers like Eric Burnquist say future economic uncertainty has put businesses like his in a tight position. Burnquist runs Georgetown Learning Centers and is still hiring college grads. But he says this year, he's holding salaries flat for entry level employees and he isn't hiring the extra employees he had hoped to.
ERIC BURNQUIST, CO-FOUNDER, GEORGETOWN LEARNING CENTERS: We're just trying to buy ourselves a little bit of time before we make those commitments and hopefully be in a better position when the economy picks up, we'll be prepared to bring on extra staff. And if the economy continues to turn down, then we'll be prepared to still making a viable business but not be overextended.
GREENSPON: Sue Gordon of American University says the good news is, graduates are still finding jobs. GORDON: My impression is that, compared to previous downturns -- say 2001, the dot-com bust, etc., 2001, 2002 -- I think right now we're in a better place than we were then.
GREENSPON: Career counselors say a telltale sign of the health of the job market could come this fall when they see how many companies sign up to recruit next year's seniors. Dana Greenspon, NIGHTLY BUSINESS REPORT, Washington.
KANGAS: We'll have more about the job picture for new grads a little later in the program as we talk with the chief executive of online job search firm careerbuilder.com.
SUSIE GHARIB: Earlier today, NIGHTLY BUSINESS REPORT's Jeff Yastine spoke with Matt Ferguson, the CEO of careerbuilder. Jeff began by asking him what the job market is like for new grads.
MATT FERGUSON, CEO, CAREERBUILDER.COM: Well, I think job market in 2008 for new graduates from college is worse. I mean, it's slowed down a little bit. I think in our survey we saw 79 percent of employers were going to hire new college graduates last year and that's down to 60 percent. So it's a slower market, but it's not a terrible market. It's not as bad as it was in 2001. I think there will be plenty of opportunities for those that are willing to go after them.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is it basically just a sense that new grads need to perhaps lower their expectations a little at least compared to perhaps their friends who might have graduated a year or two years before?
FERGUSON: I think there's something to be said about expectations. I think you may have to take a job that's a little different than what you thought you were going to take a year ago. You may have to take it in a geography or city where you didn't expect to go initially. It may not be the perfect job. The important thing for any new college graduate is get a job that's a good job that gets you started on the pathway to that better job maybe two or three years out. And don't be so specific that maybe you end up wasting a lot of time looking for that first job.
YASTINE: With all that in mind, tell us what are the best degrees for these new graduates to have for the best hiring prospects at this moment?
FERGUSON: Yeah, we see some areas that are still very, very hot for new graduates. One would be information technology and engineering. There's a ton of need in the United States for good information technology and engineering professionals. Those salaries usually start above $40,000 a year, maybe above $50,000 depending on the company. That's a very good area. Health care overall, booming demand, 300,000 jobs created in the health care in the United States in 2007, in the early part of 2008. So there's a lot of demand for health care professionals and that's a good area to be in. Also I still think sales and marketing is a good area. Companies want to grow revenue. They're still focused on their customers. I think sales and marketing is a good area to start your career if you're thinking about doing anything in management and business later also.
YASTINE: I know I've seen in past years when I read these types of stories that often in the hottest places in the job market you see a lot of signing bonuses and all these other sorts of incentives that come along. Are you seeing much along those lines in these areas that you just mentioned?
FERGUSON: No, not too much with signing bonuses. I think those would be a little bit more prevalent in a market where it's really hot and growing quickly and you saw that a lot in finance. You see that some in law school graduates. But I see overall you're not going to see signing bonuses. I think if you're in information technology or health care, you're going to see pretty good increases in your starting salary over what people saw last year. If you're in another area, you may not so that big of an increase and you certainly may not see things like signing bonuses.
YASTINE: And just a final perspective from your part as far as how does this compare compared to previous economic slowdowns in about 15 seconds.
FERGUSON: Yeah, I think this slowdown is not as bad as what we saw in 2001. I think we had a real bubble in the labor market in 2001. I think you're seeing a slowdown in the labor market, but it's not nearly as severe as last time.
YASTINE: I appreciate your time on the program.
FERGUSON: Thank you.
YASTINE: My guest, Matt Ferguson, CEO of careerbuilder.com.
