As this year’s college graduates transition from school to career, they are entering one of the healthiest job markets in decades for those with newly minted degrees. Compared with their counterparts from the Class of 2010 — who left college in the depths of the Great Recession, when the unemployment rate was 9.5 percent — this year’s graduates face unemployment of under 4 percent.
When students graduate matters significantly to their earnings in the formative years of their careers, according to researchers. Generally, people who enter the job market during an economic downturn start with lower wages than those who graduate in better times, and it takes those who start behind a decade or more to catch up — if they ever do.
But the legacy of the Great Recession for graduates goes well beyond that unlucky cohort who left college then. In recent weeks, two studies on the job market for college graduates landed on my desk. In reading them, one quickly realizes just how much the job market has shifted since the economic downturn ended.
The first study came from the Strada Institute for the Future of Work and from Burning Glass Technologies, a workforce analytics firm. It analyzed the phenomenon of underemployment among college graduates — meaning they are in jobs that don’t require a bachelor’s degree — and found that 43 percent are in that predicament.
Many graduates, their parents and even college leaders minimize the importance of the first job, knowing that many others will follow. That mind-set could prove detrimental, according to the study. Two-thirds of graduates who are underemployed at commencement find themselves in the same situation five years later. Even 10 years later, the job outlook doesn’t improve: Seventy-four percent remain underemployed.
The second report was released by Handshake, an online platform similar to LinkedIn that is used by more than 500 colleges and connects their students with 250,000 employers. In combing through more than 5 million applications that students submitted over the past year, the company found a change in the types of employers students are seeking. And it discovered changes in the skills graduates are applying outside their majors and what they want most out of a job.
Nonprofit and government agencies loom over campus hiring in ways they haven’t in the past. Some 24 percent of students are applying to jobs outside of corporate America, according to Handshake. Of that group, some 40 percent of students are applying to nonprofits, 30 percent to the federal government and 22 percent to local government agencies. Even when students go the corporate route, the companies where they are looking include a healthy mix of old brand-names where their parents could have worked. Indeed, IBM received the most applications in the past year from students on Handshake.
Students are also looking for jobs outside the industries normally associated with their majors. In health care, more than 20 percent of the open entry-level roles are aimed at graduates with technology skills. And students are looking for more flexibility in their work. The search terms “start-up” and “remote” were increasingly used by students on Handshake.
“The job market is more wide open for graduates than ever before,” Garrett Lord, co-founder and CEO of Handshake, told me. “They have plenty of choices of industries, jobs and locations to apply their skills.”
Both reports seem to indicate that the skill sets of graduates — rather than their major — might matter most in hiring. Taken together, the reports show that today’s undergraduates, along with their parents and colleges, need to prepare differently for the job market than they did a decade ago.
For one, there needs to be less emphasis in college — and in the admissions process — that a major leads to a specific job. A college graduate’s ability to do the job matters more to recruiters than the major. The Handshake report showed that graduates are applying those skills across a range of industries. Engineers, for instance, are working in the fashion industry, jobs typically associated with arts majors, and writers are employed in tech firms mostly identified with computer science majors.
Second, liberal arts graduates don’t fare as poorly in the job market as many students and parents assume. In the last few months, the liberal arts have been under fire, with a handful of colleges eliminating, or threatening to wipe out, majors such as English and history. Those majors and others in the liberal arts still matter in hiring. But the key for students in those majors is to get specific hard skills (such as computer coding or comfort with data) and learn how to translate the competencies they developed in the major, such as writing and critical thinking, so employers can better understand the background of applicants during the recruiting process.
Finally, colleges need to make career services part of the curriculum from Day 1. As the Strada-Burning Glass report showed, the first job matters more than we have long assumed. Colleges like to say they prepare students for their fifth job, not their first. That way of thinking needs to change. Students must acquire specific skills and find hands-on experiences, such as internships and undergraduate research, much earlier in their undergraduate career than past generations of students.
This time of year is often scary for graduates who are left to navigate the world of work after 17 years of schooling. But if students are armed with a broad education and marketable skills, they should have little difficulty finding gainful and fulfilling employment after college.