Challenges to Job Growth
"Despite the gloomy economic news that employers face, several developments in the economy cast a favorable light on the college labor market."
For the past several years the labor market could only be defined as robust and chaotic as employers aggressively sought new graduates to fill a widening array of positions in their companies. Even last fall, a slowing economy could not dampen the surge of employers visiting college campuses. By spring the magic was almost gone as the continued weakening financial markets, a result of the housing mess combined with higher commodity costs, constrained employers' staffing options.
CREDIT: Companies need access to dollars through financial markets to finance growth, research and development activities, and other essential functions of the organization. The housing crisis has put a stranglehold on financial markets where banks and other institutions have tightened lending until they can sort out their good from their bad assets. Even companies far removed from the housing sector are being impacted. Banks have fewer dollars to lend and those that do are lending at higher interest rates. Companies dependent on money flows through loans have had to become much more cautious in their business activities. The first casualty is the hiring of new staff. Only companies with large money reserves (usually very large companies) can proceed with their hiring plans with some certainty until the credit pipeline opens again.
COMMODITY PRICES: Companies have to purchase other resources besides labor in the production of goods and services. Energy, metals, chemicals, and grains are examples of inputs that companies may need to purchase. These inputs are coming at a much higher price. The major culprit is the strong global demand, especially from emerging economies (China, India, Vietnam, Brazil, for example), where resources are being gobbled up at a prodigious rate. Inflationary pressures are mounting throughout the world. U.S. companies have fended off these pressures, until recently, through higher productivity from their employees and cost-cutting measures. Unfortunately, U.S. employers are now conceding that they cannot keep up with rising input costs without making adjustments in their staffing. The first positions to go are likely to be those earmarked for new college graduates.
CONSUMERS: The U.S. consumer, by buying goods and services, contributes the most to our economic growth - nearly 70 percent. America's consumers are under siege with high prices for all forms of energy, food, chemical based products - nearly everything in their monthly basket of purchased goods and services. Consumers have few options but to cut consumption and change behaviors (e.g. driving) to offset rising costs. Consumers are also constrained by high levels of credit card debt, high costs of borrowing (can no longer use homes as collateral to sustain a lifestyle), and stagnant wages which have failed to keep pace with inflation. As a result, consumers are cutting back, impacting companies that directly rely on consumers for business. Retail, lodging, entertainment and auto dealers, for example, are all suffering significant declines in business. Companies are compensating by reducing positions and employees - to the detriment of college seniors.
Expanding Job Opportunities
Despite the gloomy economic news that employers face, several developments in the economy cast a favorable light on the college labor market. The pending retirement of a large number of Boomers (those between the ages of 45 and 62) has many large companies desperately searching for qualified college- educated workers to replace the retirees. Boomers will not be exiting the workforce in a tidal wave but in a steady stream which will extend over the next half decade. However, some companies and some sectors of the economy whose demographics are skewed heavily toward older workers face a wide range of immediate needs. These companies are loading up with new graduates so that they have sufficient time to train their newest employees and acclimate them to the organization's culture. The dollar, which has been weak compared to other major world currencies, has actually provided opportunities for companies that are export-focused. Global demand for agricultural products has catapulted the American food sector into high gear. From the farm through the food manufacturers, the demand for qualified staff, ranging from crop and soil scientists, food scientists, and food manufacturing engineers, has increased. Likewise, engineering, business and scientific consulting have benefitted from increased foreign opportunities.
Homeland security and military-oriented companies are also expanding or face shortages in key positions. Efforts to advance knowledge, technology and equipment to combat terrorists and sustain troops committed to conflict have generated a demand for engineers, computer scientists, mathematicians, scientists, and social science graduates. Because of restrictions on who these companies can hire, outsourcing is not an option in most cases. Employers are aggressively seeking the most qualified students from among this year's seniors.
Where to Find a Great Job
The entire economy is not in the doldrums, even though it may appear to be. Some sectors anticipate hiring a large number of seniors and recent graduates this year. Some majors flourish in all types of economic weather. As a result some regions of the country are doing better than others in this economy - location will be an important factor in finding a job (more on this in a moment). First, you have to investigate where the opportunities are and what type of new employee companies with opportunities will be seeking. You can choose to explore different sectors of the economy, or if your academic major corresponds directly to a position within a company, you can focus on job titles.
Job Sectors
"Advertising, public relations, event planning, human resources, and retailing majors will find fewer opportunities this year. These positions are generally the first eliminated when the companies face uncertainty within the economy. Seniors with these majors will need to work harder and longer to find positions."
Health services have expanding needs for a variety of technical and support personnel. A pending shortage of doctors, attributed to a high number of retirements and small medical classes in the late 1970s and early 1980s, has stimulated a growth in medical school seats. Even though the admission requirements remain rigorous, more students will have access to medical training over the next decade. The most severe shortage is among nurses. The demand for nurses presses upward with no sign of easing, as the supply of new nurses continues to lag. Technical positions also are needed - infusionists, radiology technicians and home health care attendants. More jobs will be created over the next decade in this sector than in most other areas of the economy.
Transportation may not seem a likely spot for jobs, with fuel costs eroding the profitability of air and ground transportation. However, the railroads are faced with a high number of retirements over the next few years. Their hiring will offset losses in freight and delivery services. The airlines, which began hiring last year after years of sporadic recruitment efforts, will again limit hiring this year as they continue to adjust to the new realities of fuel prices.
Agricultural production and food and beverage processing sectors are expanding. Ethanol production, organic food supplies, sustainable production processes and new nutritional (health) initiatives have energized a once sleepy sector of the economy. The supply of college students in food science, several agricultural sciences and food engineering, however, is limited. Shortages have forced employers to expand recruiting to a broader set of majors. This shift presents minor problems in that potential hires without a farm background or experience have more difficulty adjusting to the work environment. However, the outlook in these sectors will remain promising over the next several years.
Energy and utilities companies are contending with a shortage of trained personnel primarily because of pending retirements and the high level of turnover among new hires. The search for and transition to alternative energy resources has accelerated the need for engineers, scientists (geological and material), as well as personnel with business expertise. Energy will be a pressing concern for the decades to come and employment opportunities will abound for graduates with the right degrees and interests.
Insurance is a field that most seniors shy away from because they think it is all about selling policies. The industry offers a wider variety of positions and opportunities that require skills that can be derived from many different academic programs. Growth is stimulated by changing health care coverage, disaster and climatic changes, and rising life expectancies, all brought on by a rapidly changing world economy.
Other sectors to consider for good jobs include government (federal and state) and education. Budget deficits may impinge on the government sector, forcing agencies to restrict hiring, but the retirement of Boomers will significantly shape the federal and state workforces over the next few years. K-12 education is also projecting shortages of qualified teachers over the next several years. However, regional differences in hiring provide clues on where these jobs will be. The Midwest and Great Plains states that continue to see an aging population (often in rural areas) will need fewer teachers over the next decade. States and regions with a younger population will provide more opportunities. Students trained in states with declining enrollments should plan on looking to growth areas for employment.
Academic Majors
"You are going to have to research companies in the industries you wish to enter. Some will visit campus; but many [won't]. Remember, nearly 60% of graduates annually find their first job with employers that have fewer than 4,000 employees (35% with employers that have fewer than 250)."
Academic majors that have a corresponding job classification in the workplace tend to have an easier time in weak economic times. Accounting serves as a great example where a major directly links to a job. In fact, accountants always seem to be in demand regardless of how the economy is doing. Nursing is another good example. Other majors that are expected to survive this economic downturn include computer science and IT majors. (There simply are not enough of these majors graduating to meet demand.) Engineering, logistics and supply chain, packaging and geological sciences also are majors in high demand.
Not all majors with corresponding positions will be as lucky as those mentioned above. Advertising, public relations, event planning, human resources, and retailing majors will find fewer opportunities this year. These positions are generally the first eliminated when the companies face uncertainty within the economy. Seniors with these majors will need to work harder and longer to find positions.
What about the liberal arts - that broad array of majors in the social sciences, humanities, arts and some natural sciences? The liberal arts have fared well over the past few years as employers have recognized their value in managing and analyzing data, design, and Web content, for example. This year liberal arts majors can expect heavy competition for the few jobs that will be available. Employers paring back usually eliminate those positions over technical and business positions. Employers may live to regret this decision as liberal arts majors prove to be valuable assets after several years in the workplace. But that is little solace in a tight labor market.
Strategies for Finding a Great Job
As the school year begins, all the signals suggest that the labor market will cool down from its hot pace of the past three years. Opportunities are available, however, and juniors and seniors need to begin planning their transition strategy from college. Here are some suggestions to consider as you settle into your classes and before the first football game.
START EARLY: Your first visit should be to your career center and an appointment with your career advisor. During this session register for services, and mark the dates for career fairs and company information events on your calendar. Next, put together a job search strategy for the entire academic year. Designing a winning resume is relatively easy compared to the leg work you will have to do to search out companies that are likely to value you as an employee. The longer you wait to start the more difficult it is to connect with an employer before graduation. Students who wait until spring or even after graduation run a real risk of facing a tapped out labor market (no positions left to be had).
"Do your research, be prepared, and shake hands; but don't put this assignment off until the end. Why? This year the opportunities available in the market will go to the early bird. Those who wait may face frustration and anxiety as they look for a job."
RESEARCH: You are going to have to research companies in the industries you wish to enter. Some will visit campus; but many medium and small companies do not have a presence on campus. Remember, nearly 60 percent of graduates annually find their first job with employers that have fewer than 4,000 employees (35 percent with employers that have fewer than 250). Many career centers offer employer databases that you can search as well as protocols for Googling companies on the Web. Set aside a minimum of two hours each week just to research potential employers. The more information you gather, the more informed you will be about the opportunities and threats in the industries where you want to work.
LOCATION, LOCATION, LOCATION: Where you want to work is going to be an important parameter in identifying companies and landing a job with one of them. It is rather naïve to say, "I am willing to go anywhere for a job!" Some individuals are open to any location; but past research shows that most graduates want to stay relatively close to family and friends, or they have preferences to remain in certain geographical areas. A Minneapolis company may look very appealing to a Florida graduate in the spring, but come January home is much more attractive. Make your location preferences explicit at the beginning of your job search. This focus will allow you to use your resources more effectively. Be flexible however. Even within some states regional labor markets have sharp distinctions. One may be depressed and another expanding. The more you are aware of regional labor markets, the more knowledgeable you will be in conducting your job search.
EXPERIENCE: Employers probably will not even look at a potential candidate who has not had an internship, co-op or career-related work experience. In fact, many employers want two work experiences. Do not wait until the last minute to do your internship. Sometimes it cannot be helped, but generally an experience between the junior and senior year will position a student for on-campus recruiting during the senior year. If you are faced with beginning your job search without a credible work experience, you should consult your career advisor on strategies to offset this gap by emphasizing other activities that demonstrate your skills and competencies.
NETWORKS: The most valuable tool you have in finding a job is the social networks you have established over your time in college. Naturally your family and friends can connect you to potential employers - so don't hesitate to ask. You also have an array of campus contacts from classmates to guest speakers to work supervisors who can provide access to employers. College alumni networks also may be useful. Ask your career center staff if your college or university has a professional network (not Facebook but LinkedIn or similar site) through which alumni may be contacted. If your school has one, join immediately!
MEET AND GREET: Be sure to take advantage of employers who come to campus. Many employers host information nights. These events are more important than the fairs and other large events as employers have time to get to know you. Student professional organizations often arrange sessions with employers prior to career fairs or at monthly meetings. Take advantage of all these opportunities. They will help you build a professional network, and you will learn more about the workplace and how you fit into an organization.
A FEW DONT'S: Too many students simply rely on dropping their resumes into job provider websites and drop boxes on company's websites. Or students send out hundreds of resumes blindly to companies. Neither of these strategies works well. Sure, your buddy got an interview right after uploading his resume; but the magic only works infrequently. You are going to have to be diligent. Your job search will be the hardest assignment you have had to do in college. Do your research, be prepared, and shake hands; but don't put this assignment off until the end. Why? This year the opportunities available in the market will go to the early bird. Those who wait may face frustration and anxiety as they look for a job.
