Graduation season is here, which means that it’s time for C2C’s annual state of the job market. There is good news: compared with 2015, the employment landscape for the class of 2016 looks more favorable, yet is not without its challenges.
- A slight uptick in hiring expectations gives reason for optimism
- Reality clash persists between graduate expectations and self-assessment of job-readiness, and employer offers and requirements
- Entry-level wages remain stagnant while student debt soars
Now, let’s look at the data underlying the assessment:
The number of college graduates remains steady. The National Council on Education Statistics (NCES), reports that approximately 1.87 million students will graduate with a bachelor’s degree this year, roughly the same number as in 2015.
The majority of newly minted alumni plan to enter the workforce directly from their undergraduate studies. Only 17 percent of graduates will continue on to pursue advanced degrees immediately.
The job market for new grads remains uber competitive. When you add in unemployed (5.6%) and underemployed previous college graduates (13%), the class of 2016 faces a lot of competition for a limited supply of good, entry-level jobs.
Hiring is forecast to increase but not for all industries. Both the National Association of Colleges and Employers (NACE) and CareerBuilder.com’s annual surveys found that employers are planning on increased hiring of recent college graduates versus last year. The Bureau of Labor Statistics forecasts healthcare jobs, once again, to be among the fastest growing occupations.
Buried within the statistics are some discouraging trends. Fewer employers will increase hires over a year ago and more employers plan to decrease new hires. Falling oil prices, lower projected growth, tighter budgets and corporate restructures are to blame.
New graduates remain optimistic about their prospects. The reality will vary for many. Accenture’s annual study of recent college graduates uncovered significant gaps between the class of 2015’s expectations and realities experienced by previous graduating classes.
Career readiness continues to be a big concern for employers. A large gap exists between graduates’ self-assessment and employers’ perceptions of entry-level candidates’ readiness.
Employment prospects vary significantly by location. NerdWallet.com’s 2016 survey of best cities for recent college graduates cites Arlington, VA at the top of its list for opportunities and Washington, D.C. as third. Apparently, our nation’s capitol and its suburbs are where it’s at for new graduates. Noticeably absent is New York City, which is the most expensive city for new graduates.
The skills employers seek remain unchanged. NACE’s 2016 Job Outlook Survey reaffirmed traits most in demand among employers are leadership, teamwork, communication skills (written and verbal), problem-solving, and professionalism/work ethic. Having that right balance of technical and soft (smart) skills is critical to securing a great job.
Pay is up for some majors, but lower for others. STEM majors remain at the top of the pay scale with forecasted increases in starting pay. This year, communications, health care and social sciences majors will face lower starting salaries.
Overall, wages for college graduates have been flat since 2000. College graduates still earn much more than those with only a high school diploma. And they need to, because…College debt is skyrocketing. The average college debt now stands at $35,000, triple what it was just two decades ago. Nearly two-thirds of the college cap and gown crowd will leave the stage with a diploma and a hefty loan to pay off.
Pay disparity by gender starts early. If you’re female, you can deduct even more from your prospective paycheck. According to US News and World Report, starting annual salaries for female graduates are $9,000 lower than male counterparts. Honing negotiation skills now will pay off handsomely over your career.
Strong personal finance skills are critical. Whether you’re male or female, understanding your pay, benefits and expenses can give you a stronger start financially. This is especially important if you face a lower salary than you anticipated and/or carry student loans.
Before you collect that diploma you’ve worked so hard for and leave campus life in your rear view mirror, take time to set yourself up for success in your job search. Reach out to your favorite professors and request letters of recommendation. Leverage your college’s career office and job boards. Connect with alumni who work in fields that interest you. Your fellow alumni are among the best connections you can make in your job search. Your ties to your college will never be as strong as they are now.