(Job Outlook 2009 Spring Update—Student Version)
As the economy continues to falter, it is clear that employers are limiting, in a significant way, their hiring of new college graduates. Employers expect to hire 22 percent fewer new grads from the college Class of 2009 than they hired from the Class of 2008, according to the Job Outlook 2009 Spring Update.
This survey, conducted by the National Association of Colleges and Employers (NACE), ends a string of positive college hiring reports dating back to 2004, and overrides those employers made back in the fall, when hiring projections looked flat.
Almost all employers surveyed said that they had decreased the number of new college graduates they planned to hire, many of them as the result of the deteriorating economic situation.
For college graduates of the past several years, it was a “sellers” market in which they could all but dictate the terms of recruiting. Those days are gone. New graduates can no longer dictate terms; rather they must compete with each other to sell their skills to the limited set of remaining buyers.
Hiring Expectations by Industry
The decrease in college hiring expectations exists across every industrial sector of the economy with two exceptions. Only reporting federal government agencies and a group of companies within the logistics, transportation, and utilities sector expect to hire more college graduates as full-time employees from the Class of 2009 than they did from the Class of 2008.
With respect to federal agencies, the increase, even during the recession, is understandable. Even if the federal sector does not grow, replacement openings—due to retirements—will result in increased employment opportunities in federal government employment. In addition, an increased role is likely for many federal agencies given the effects resulting from the virtual collapse of the banking sector.
An increased role, even if temporary, is likely to produce increased employment opportunities in government. Nevertheless, even with these advantages, the expected increase in new college hires in government is relatively small—less than 6 percent. The increase is far more substantial among firms categorized as distribution, transportation, and utilities.
Particularly noticeable is the dramatic decline in the number of hires in the finance sector, a traditionally strong hiring area for new college graduates. This is the second year in a row where the Job Outlook Spring Update survey has reported a decline in hires for financial service firms, and this year’s drop takes the sector out of its traditional role as a prime landing spot for college seniors.
Also disquieting is the decline in anticipated hires from the professional services sector. This grouping represents accounting and engineering firms, which are also traditionally strong industries for new college graduates. This also represents the sector where the most-sought-after undergraduate majors (accounting and engineering) tend to land. Poor hiring estimates from this area speak to the depth of the recession in the college labor market for the Class of 2009.
On-campus recruiting activity
In addition to—and, really, as a consequence of—the drop in plans to hire new college graduates, there has been a sharp decline in overall recruiting activity on campus, including employer information sessions, on-campus interviewing, and posting jobs on campus web sites. It also includes a significant drop in career and job fair activity by employers.
In addition, there is a clear indication that the level of activity will continue to decline through the spring.
Nearly 22 percent of employers said that they do not plan to hire at all this spring. Only one-third of employers will be on campus to hire both full-time recruits and interns. Meanwhile, 16 percent of employers note that they will be on campus to recruit only interns.
Expectations for fall 2009
Hiring plans for the next year are generally poorly formed at this point in time. However, employers responding to the survey indicate an unparalleled level of uncertainty regarding the future of their hiring programs. More than 46 percent of employers said that they were unsure of their college hiring plans for next fall.
For those organizations that do have some idea about hiring new graduates from next year’s class, the picture is not particularly promising. Barely more than one-third of respondents are projecting hiring more or the same number of graduates as this year. In addition, 17 percent of survey respondents said they plan to hire fewer graduates next fall.
In spite of this gloomy forecast, the longer-term prospects for college graduates are still strong. This generation will still be required to fill the slots vacated by the retiring Baby Boom generation. Those retirements may not come as soon as many expected and will not help the current employment prospects of this year’s graduating class, but they will come, and, when they do, the employment opportunities for college-educated professionals should be plentiful, even if the economy does not grow at a record pace.