Now that Trends has been out for a month and most of the initial speaking engagements and webinars are over, I can take a few moments over the holidays to reflect on the status of college hiring. Although the college labor market for new grads represents a very small segment of the total labor market, it appears to be expanding while other segments of the labor market seem stuck. Recently I had a call from a close friend who was ecstatic that his students were reporting multiple offers and that the number of students getting jobs was high. I asked him if he was hearing from the same group of students over and over again or if the hiring was running deep into the class of graduates. He was not sure.
Based on visits to about 10 campuses since Trends was released, I sense a very competitive market for “the stars.” However, a star is defined as those seniors who entered Fall semester ready to seek a job–knew the direction they wanted to go, could articulate their skills/competencies, had gained significant professional experiences–they are the ones that the large companies have been aggressively courting. However, beyond the top 20% or so, the situation is much different and for those students who are just beginning to think about their transition, the picture could be bleak.
Engineering tells a varied tale. In some locations I expected these majors to be doing well. Colleagues were reporting so-so activity (except for computer science/IT ) while at other schools, employers were complaining of too few students on their schedules. The college market is (1) localized – some regions are pulling ahead better than others; (2) depending on large companies to recruit heavily at core schools, spilling over to other schools if they cannot meet their targets; and (3) anticipating aggressive hiring by smaller employers through the spring. The college labor market is beginning to awaken but still has a long way to go. Factors critical to sustaining the gains anticipated this year and to furthering the momentum in hiring include:
- Financial institutions have to provide a steady flow of dollars throughout the economy. Most analysts anticipate banks will continue to be tight with their reserves.
- Non-financial companies are sitting on more than $900 billion in cash–the highest in several decades. Hoarding money was a logical course when the economy looked like it could continue to nose dive but that has not happened. With more stability, companies can start acquiring technology, modernizing equipment, making strategic acquisitions, and begin hiring people.
- Boomers began turning 65 on January 1 (averaging 10,000 a day). When will they begin to retire? How many of their positions will companies actually fill? We need to get a better sense of the demographic shift taking place in order to position our graduates better.
- Demographers estimate that the world’s population will reach and exceed the 7 billion number sometime this year. This will have profound effects on consumer markets, resource allocation, and wealth accumulation throughout the world.
- State and local tax revenues were up the last five months of the year, painting a brighter picture in hard-hit states like California, Michigan, and Ohio. Over the short run this will probably save some jobs, in fact states like Georgia are hiring, but in the longer run, most states have to deal with a structural imbalance between revenue streams and obligations. Since no one wants to pay taxes, expect state and local governments to cut services (privatize–so you will be taxed through the market) and infringing on an important component of the college labor market, especially this decade.
- Consumers went shopping big time over the holidays–looking for the best deals and paying in cash. Consumers remain conservative which may mean a slowdown in spending during the early months of 2011. Employers whose inventories are extremely low will keep suppliers busy restocking but they must deal with the uncertainty of restrained consumers. The one bright spot appears to be the wealthy (not sure where this group’s income begins but let’s say $250,000) who have been on a spending binge the last several months and do not seem to be putting on the breaks yet. Ads will be adjusted to cater to those who wish to spend big. It may impact jobs but until all of us have aligned our earnings with judicious spending, the consumer will remain a wild card in shaping jobs.
War on Unemployment:
- What would really help would be those folks in DC getting off their ideological horses and agreeing to a “War on Unemployment” (heard this from Brian Belski of Oppenheimer)–we have done it before. Remember Regan’s War on Drugs? We may not have won that war (just moved it to Mexico), but it got a lot of attention and some localized solutions. We are never going to solve unemployment but there is no excuse for the level of unemployment and the lack of a comprehensive workforce development strategy out of the leaders in DC.
- Make things other people want. Manufacturing is not dead in this country. We still have the best applied innovation, design, and production system in the world. Instead of writing an obituary to manufacturing, we need to invest in it. Manufacturing itself will not increase employees significantly to make the actual product but it will hire creative designers, logistics, marketing, and a wide range of different skill sets.
We need to raise our expectations and strategically align our education with anticipated workforce requirements so that every young person in the US has a chance to succeed during this new decade. That is my new year’s resolution.
References to check out:
Bloomberg Businessweek’s year –end review puts 2010 in broader context. Writers conclude that 18 months after Lehman Bros the economy is still “breathing on the fumes of 2008.”
The Korn/Ferry Institute Briefing on Talent and Leadership stresses the advantages of LinkedIn as a job search/recruitment tool of the highest caliber.