TOPICS > Economy

College Grads to Face Toughest Job Market in Years

June 6, 2008 at 6:15 PM EDT
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Amid worsening economic prospects, marked by Friday's Labor Department report announcing new unemployment highs, the class of 2008 faces a tough job markets for new college graduates. Two career-development experts discuss the challenges ahead for new job-seekers.
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RAY SUAREZ: While the picture isn’t exactly rosy, the prospects for new grads may not be as bad you think. According to an annual survey of college recruiters, employers plan to increase their hiring of new college graduates by 8 percent compared to last year.

Here to tell us more: Marilyn Mackes is executive director of the National Association of Colleges and Employers; and Trudy Steinfeld, executive director of the Wasserman Center for Career Development at New York University.

Well, Marilyn Mackes, just a moment ago we heard a portrait of the job market and the economy writ large, and it wasn’t very pretty. Why is the market for new grads different?

MARILYN MACKES, National Association of Colleges and Employers: Well, it’s very interesting. You know, it was very bleak to hear that news, but, as you noted, we’re seeing an 8 percent increase.

Now, I will tell you that this follows four straight years of double-digit increases in college hiring. So there is a bit of a slowdown, but it’s still a pretty good market.

What happens in the college market is that employers start their recruiting much earlier for the hiring. They start as early as the fall of the senior year. And, quite honestly, they’re converting a lot of internships students have had prior to that.

So what happens is that sometimes what happens with the college market is that it will lag what is happening in the economy.

RAY SUAREZ: Trudy Steinfeld, are you seeing the same thing in one college, one university that’s sending its grads out into the marketplace?

TRUDY STEINFELD, Wasserman Center for Career Development at New York University: The college market at New York University for employment has really remained pretty robust.

And I think that, really, the factors — to dovetail what Marilyn has said — is that, number one, college hiring does start very, very early. The recruiting cycle could be 10 months ahead of when they expect students to start.

Another factor is top talent from colleges and universities such as NYU are cheaper than more experienced labor. And I think that’s why many employers in a variety of sectors are going to the college market to really fill their ranks.

Student prospects amid turmoil good

Marilyn Mackes
National Assoc. of Colleges, Employers
The majority of them, the vast majority of them, have not changed their hiring for this year. And, in fact, the projections for fall 2008, two-thirds of them are saying that they're going to remain as active or increase their hiring.

RAY SUAREZ: It's interesting that you say the recruiting starts much earlier, because employment is often a lagging indicator. Are there employers who made plans to take on some of your graduates who have now seen their circumstances change by graduation time?

TRUDY STEINFELD: Well, you know, it's interesting you say that. We actually have been very proactive and been really reaching out to all of our employers, actually, since November, when we started seeing signs that the economy was really starting to weaken.

And for the most part, all of those offers and those hiring plans have remained strong, with one notable exception, and that's Bear Stearns, who did renege nationwide on their offers. I'm very happy to report that almost all of our NYU graduates who had Bear Stearns offers have new jobs in hand.

RAY SUAREZ: What about the picture overall, Marilyn Mackes? Are there employers...

MARILYN MACKES: Yes.

RAY SUAREZ: ... who are having to revisit their hiring plans for this year?

MARILYN MACKES: Well, it's interesting. You know, we also follow up, because we do a job outlook survey in the fall, and we stay in touch with our employers throughout the year. And we actually specifically asked them this year what their plans were, in terms of any changes in their recruitment.

And just to reinforce what Trudy has said at NYU, the majority of them, the vast majority of them, have not changed their hiring for this year. And, in fact, the projections for fall 2008, two-thirds of them are saying that they're going to remain as active or increase their hiring.

Now, I will tell you that I think it's kind of a cautiously optimistic approach to the recruiting season for next year, so we're all staying on top of it.

RAY SUAREZ: But it's fascinating. You know, we've got five straight months of job losses, meltdowns in some sectors, like finance, housing. If you're in the business of appraisals or writing mortgages, those people are losing jobs by the tens of thousands. Yet you still have an increase. How do you explain that?

MARILYN MACKES: Well, it's interesting, also, that geographically -- for example, we found when we surveyed the financial services area, where we saw most of the decreases in projected hiring were not in the Northeast, in the Wall Street area, so much as in the South, where a lot of the mortgage lending was taking place.

So, actually, geographically, the South and the Midwest are experiencing very, very flat hiring right now, but the Northeast is doing extremely well.

RAY SUAREZ: Do you second that, Trudy?

TRUDY STEINFELD: Yes, I would definitely second that. And I would also say there are some other factors, that some of the financial services firms that we deal with were not as exposed, in terms of the mortgage-backed securities, and were doing very, very well.

They did not have the same kind of dramatic financial pressures that some of the firms you've been reading about. And I think that really accounts for why some of the hiring and some of the projected plans for the fall remain fairly strong or at least cautiously optimistic.

Future options more nontraditional

Trudy Steinfeld
Wasserman Center
A lot of our students are very social activist-oriented, they're socially engaged, they want to do something, and they're looking at maybe the next year or two to do something that they can contribute to the educational sector.

RAY SUAREZ: Trudy Steinfeld, are there graduates who are, in effect, taking themselves off the market by going to graduate school, when they might not have otherwise, or extending their education because it just looks too perilous to jump into the pool now?

TRUDY STEINFELD: You know, I think that some of our graduates' parents are more anxious than our students. I think that's an overall observation. But some of our students absolutely are applying to graduate or have applied to graduate or professional schools and are doing that in the fall.

The other thing, that a lot of our students are very social activist-oriented, they're socially engaged, they want to do something, and they're looking at maybe the next year or two to do something that they can contribute to the educational sector, they can contribute to the environment, work on some kind of social causes that are very near and dear to their hearts.

RAY SUAREZ: If people are just getting started now, Marilyn Mackes, looking for work, how would you advise them? Are there any particular sectors, any particular parts of the country, any particular industries that are hot right now, and you say, "It's not necessarily what you've got a degree in, it's where the action is"?

MARILYN MACKES: Well, some of it is geography, and some of it is industry. And earlier in this segment, we heard about some areas like health care, for example, is a booming area. Energy is extremely strong, as I think we all know.

And, in fact, starting salaries for chemical engineers topped the list. So there are certain fields like that -- energy, health care, and that sort of thing -- that are certainly going to be very much in favor right now, very much popular for everyone out there who's looking for a job at this point.

A need to be flexible

Marilyn Mackes
National Assoc. of Colleges, Employers
So I think candidates are going to need to be flexible about the industry that they might want to be working in. They're going to be flexible about the nature of the work and flexible about the compensation.

RAY SUAREZ: And should they bring with them particular expectations on wage, be flexible? I mean, how much play is there going to be in the offer?

MARILYN MACKES: Well, clearly, when times are tougher, when things start getting a little bit more competitive out there, flexibility is extremely important.

So I think candidates are going to need to be flexible about the industry that they might want to be working in. They're going to be flexible about the nature of the work and flexible about the compensation.

They may not see some of the higher compensation that we've seen in recent years. In fact, this year, for example, in the business area, various disciplines and business, what we're seeing is flatter starting salaries than we've seen.

But, overall, this graduating class is looking at a 5.3 percent salary increase, so it's still pretty strong.

RAY SUAREZ: And, Trudy Steinfeld, even though you both have spoken about how long ago the recruiting season started, what if you're just getting started now? What's your best advice for someone entering the labor market?

TRUDY STEINFELD: I think, if you're just entering the labor market, that you really need to be flexible and you really need to keep your options open.

But one of the things that, you know, we've talked about, the health care sector, education, jobs in government, certainly technology and the accounting fields, as well as anything connected to service and business development, but sometimes you might feel, you know, you're graduating with a liberal arts education and maybe you're not prepared for those fields.

Within all of those sectors, there are jobs for graduates with any major. So if you are flexible and you really understand your skills and know how to promote them, then you're really going to, I think, have many opportunities available to you.

RAY SUAREZ: Trudy Steinfeld and Marilyn Mackes, guests, thank you both.

MARILYN MACKES: Thank you.