The National Center for Education Statistics estimates that approximately 1.9 million bachelor’s degrees will be awarded in the 2017-2018 academic year in the United States. These graduates will be among the millions worldwide who will be entering the job market with a degree for the first time.
A strong economy with low unemployment and robust growth projections should indicate that the graduates of the Class of 2018 have bright prospects for finding their first job after graduation. And while it is true that many graduates will benefit from the current strong demand for talent, others may face unexpected challenges. NACE, the National Association of Colleges and Employers, reports that employers plan to hire 1.3 percent fewer graduates from the Class of 2018 for U.S. positions than they did from the Class of 2017.
The study notes that volatility in just a few industries will impact the overall hiring outlook. Two industries, in particular, are driving this overall decrease: insurance firms and retail employers. Insurance firms responding to the survey projected a decrease in hires by 42 percent due to the recent natural disasters, including Hurricanes Harvey and Irma, which led to high payment amounts for catastrophic losses. Retail employers plan to decrease their hires by almost 33 percent, citing the changing landscape of the industry and a lack of job openings as the key factors. 2018 marks the first decrease in this hiring projection since the Class of 2010.
Despite the obstacles that some new graduates may face, the members of the Class of 2018 in the U.S. will be entering the workforce at a time of record high job openings. Yet a study released earlier this month notes that three-quarters of this year’s graduating class do not have jobs lined up after graduation. In the current extremely competitive job market, employers hoping to attract these first-time job seekers need to understand their concerns and expectations.
Wage Pressures for 2018 Graduates
According to the Federal Reserve Bank of New York, approximately 70 percent of college students borrow money to pay for their tuition. The average debt to a student borrower is $27,975. A significant number of candidates from the Class of 2018 will be entering the job market with student loan debts that they will seek to pay off as soon as possible. This makes compensation a major factor in choosing a job. In addition, many of the most attractive employers are located in large cities with a high cost of living. The Class of 2018 job seekers may find themselves balancing their need for a sizable paycheck with other attributes employers have to offer.
Which Majors Pay the Most?
While many students choose their field of study based on interest and applicability to their future careers, graduates of the Class of 2018 can evaluate their choices based on projections of their future earnings. In the NACE Winter 2018 Salary Report for the Class of 2018, students with engineering, computer science and math and sciences degrees are the top-paid graduates at the bachelor’s degree level.
The average starting salary for a 2018 graduate in engineering is $66,521 followed closely by those majoring in computer science at $66,005. Math and sciences majors will average $61,867. While an undergraduate degree in business was once thought of as a ticket to a high starting salary compared to a degree in social sciences and humanities, the initial average earning for business is only slightly higher for the Class of 2018. A business major can expect an average income of $56,720 while a social sciences major can plan to earn an average of $56,689 and a humanities major will average $56,688.
Global Outlook
For much of the world’s largest economies, the strong demand for talent provides a good environment for first-time job seekers. The notable exception is in much of southern and eastern Europe where youth unemployment remains high. Due to the uncertainties related to Brexit, especially regarding the free movement of labor, the Class of 2018 is potentially facing fewer options of work locations than their predecessors.
In Canada, new college graduates can use data from the recent BMO’s Regional Labour Market Report Card to help determine the best locations in which to search for jobs. Moncton, New Brunswick topped the City Labour Market Performance Rankings, increasing from a six-year low. British Columbia and Ontario are showing the strongest results for overall job market conditions by province. Local unemployment, job growth and business investment are some of the elements that contribute to the ratings provided by the report.
Australian college graduates are increasingly turning to part-time work for employment. The Guardian reported earlier this year that there is a pronounced trend towards part-time employment among graduates. Between 2008 and 2017, the proportion of employed graduates working part time increased by 17 percentage points to 38 percent of all graduates. And part-time employment is growing in Australia. In the March 2018 Australian Employment Report, part-time jobs grew while full-time jobs decreased.
UK Study with Global Implications
A study from Universities UK found that one in three graduates are mismatched to the jobs they find after leaving their university studies. While universities and students themselves can take steps to address this issue, employers need to attract the right people at the right time for the right positions. Given the amount of early attrition in much of the world’s major economies, this problem is not limited to the UK.
Finding the Perfect Match
A key element in solving this “graduate to job mismatch” is in the recruitment process itself. Take a moment to consider what attributes a new graduate should have to be an ideal candidate for your company. How can you know if these ideal candidates exist? And if they do exist, how can you successfully compete with other companies to attract them?
What steps do you need to take to increase the chances that it will be your job offer that is accepted and not one of your competitors? If the answers to these questions are not addressed in your current recruitment process, it may be time to turn to an expert. Enterprises that have shown success in the delivery of products and services should consider turning to a Recruitment Process Outsourcing (RPO) company to provide the needed expertise to attract the millions of new graduates coming into the job market this year. And with many graduates receiving their degrees this month and job markets tighter than they have been in years, the time to act is now.