College students graduating this fall or next spring should expect to face a softer job market than in the past several years as a result of the pandemic-related economic downturn.
Just 37 percent of the more than 2,400 employers nationwide responding to an annual Michigan State University survey said they planned to increase hiring quotas across all degree levels.
That’s a 15-percent decline from a year ago in the annual recruiting survey, which for several years found more than half of respondents planned to increase recruitment of college graduates.
This year’s hiring expectations come after “the college labor market has experienced ten years of solid, if not spectacular, growth,” according to a report on the 2020-21 MSU Recruiting Trends survey.
“COVID-19, a non-economic event with destructive economic consequences, continues to raise uncertainty nearly 10 months” after hitting the U.S., according to the report. “The hope for a speedy recovery has not materialized, and conflicting economic news sends troubling signs that some employers are recovering and doing well while others face continued economic hardship.”
The report also found employers’ plans “more subdued with the labor market in a swoon.”
The number of employers planning to increase their recruiting of graduates with a two-year associate degree declined 10 percentage points from a year ago to 42 percent. Increased recruitment of graduates with a bachelor’s degree slid 11 percent points to 35 percent.
The hiring outlook for MBAs and other master’s students was “more disappointing,” according to the report. Only 26 percent of employers responding to this year’s survey planned to recruit more MBAs, down 10 points from 2019-20. One-quarter intended to increase recruitment for graduates with a master’s degree, a decline of 12 percentage points.
‘Sitting on the sidelines’
The annual survey reflects the state of the economy in the pandemic and uncertainty about the future, said Phil Gardner, director of MSU’s Collegiate Employment Research Institute.
“It’s hovering right around employers just holding the line where they were. They’re not aggressively hiring,” Gardner said. “It’s just holding there and people are waiting to see what happens with the virus in relation to the economy.”
As the fall recruiting season approached and many college campuses operated virtually, nearly one in five survey respondents said they curtailed all college recruiting without making job offers. Some curtailed recruiting and rescinded job offers.
One-quarter of recruiters who were active on campuses were “completely gone,” Gardner said.
Although employers are generally cautious with recruiting this year, the college job market has not collapsed, similar to what occurred in the Great Recession a decade ago and the prior economic downturn, he said.
“They’re sitting on the sidelines waiting to see what happens in January and February, and now we know the outlook for January and February is not good, so they may not hire at all this year,” Gardner said. “I’ll call it a swoon because it’s down, but it’s not like we saw in 2008 and 2000 when it really hit bottom fast.”
Still, the softer job market this year does mean college graduates will need to temper their expectations and “work harder” to find an opportunity as they enter the job market, Gardner said.
“Employers are saying, ‘You really have to be open and receptive to the kind of opportunities that are out there.’ They may not be exactly what you thought you were going to do, but these will open future doors for you to get where you want to go,” Gardner said. “It’s just what they have available right now and that’s what they’re presenting to students.”
Virtual recruiting, tips for students
Those recruitment methods — as with so much that is now different about how people work in the COVID-19 economy — have gone more virtual in the pandemic.
Nearly 30 percent of employers surveyed told MSU that they plan to use technologies to connect with students through events such as social media or online job fairs. Virtual technologies that employers have chosen to utilize in recruiting this year are already familiar to students, career professionals and talent professionals.
Above all, college graduates “need to be persistent,” Gardner said. The COVID-19 pandemic will eventually wane, and the economy will improve and generate more jobs.
“There are a lot of jobs out there. Is there one for every student that’s going to graduate? Probably not right at the moment,” he said. “But every student that takes their job search seriously has a much better chance of finding a job.”
Gardner advises students to not only change expectations but also to not focus just on large corporations. They should research and consider small and mid-sized companies “that you may not be familiar with and you see them out there having positions you never heard of,” he said.
Results from the MSU survey indicate that more smaller employers with 100 or fewer employees planned to hire graduates with associate or bachelor degrees than large companies with 100 to 499 employees.
As well, employers with 500 to 1,499 employees “will increase hiring at all degree levels except MBA,” while at organizations with 1,500 to 25,000 employees, “hiring weakens across all degree levels,” except at the associate degree, according to MSU. Hiring at those largest companies for graduates with bachelor’s degrees will decline 19 percent this year.
More than eight out of 10 companies said they plan to hold starting salaries at 2019-20 levels, and 13 percent planned to increase pay in their offers to graduates. The remaining 3 percent intend to lower starting salaries.
Economic sectors where survey respondents intend to increase hiring include computer services and development, and scientific research. Gardner expects education “to be really strong in the spring and certainly we won’t have enough teachers coming out.”
Down sectors include engineering, manufacturing such as automotive and aerospace, hospitality and food service, and advertising, marketing and public relations, and accounting, payroll and tax services.