Black Collegian Career Center

Since late summer, the economic news indicating the long “anticipated slowdown” triggered by several interest rate increases, had finally arrived.  The stock market has witnessed an erosion in value, especially among dot-com companies; major manufacturing, and communications; and financial companies have initiated plans to lay off thousands from their labor force; and inflation while very modest, continues to loom in the background.  What impact will a “soft” or “hard” landing of the economy have on the college labor market?  After three years of an incredibly strong, persistent growth, the steam may have run out!  Not so!  Employers expect to keep hiring college labor in response to demographic changes and skill requirements.

College Labor Market: an Overview

Nearly 400 employers responded to the 2000-2001 Recruiting Trends survey conducted by Michigan State University, in cooperation with the Midwest Association of Colleges and Employers.  These respondents were generally confident about the future of the national economy, despite an economic slowdown and ongoing organizational restructuring.  Factors contributing to their confidence arise from increased productivity, improvement in services, solid financial markets with controlled interest rates, technological advancements, and the shortage of qualified workers.

In rating the overall college labor market, 43% considered the prospects excellent and an additional 41% stated them to be very good.  Retail, financial services, health care/social services and food lodging were the most confident sectors.  Manufacturing’s confidence improved over last year while professional services remained correspondingly high.

When asked to rate the college labor markets in their own industrial sector, respondents were slightly more cautious.  Financial and information services, food and lodging, retail and professional services expected prospects to be very good to excellent throughout their industry (aggregate ratings exceeded 85%).

Approximately 50% of the respondents recruited in the Midwest with 33% indicating that they recruited nationwide.  About 25% of the respondents sought college labor in the other five regions of the country.  They reported that the Northeast, Southeast, Midwest, and California would be the strongest labor markets.  The Northwest was viewed as slightly weaker as major employers in this region respond to current market and political issues.

The agricultural sector, which was pessimistic about their outlook in 1999-2000, indicated an improvement in employment prospects.  Allied health respondents expressed a pent-up demand for labor, which is being held in check by cost retainment measures and political issues surrounding health care.

What’s Driving This Year’s Labor Needs?

Several reasons were emphasized when explaining hiring intentions.

• Retirements.  A large cohort of baby boomers are poised to retire.  In fact, many have been able to retire early because their retirement assets (stocks) have done so well.  The surge of early retirements may have caught employers by surprise – accelerating succession labor needs.
• Skill replacement.  Even though some companies intend to lay off workers, they also intend to hire.  Employers appear to be replacing skill sets; bringing in college graduates who are perceived to have the skills they seek.
• Unfilled needs.  Some employers could not find the qualified labor they needed last year; so they have carried over these positions hoping to fill them this year.

What Majors are Hot?

Employers will be hiring a variety of majors.  Overall 58% of the respondents expect to increase hiring over last year and 26% indicate they will hire at the same level as last year.  Based on the actual number of hires, employers in this sample expect hiring to grow by 6% to 10%.  A small number of large employers noted that they have large hiring quotas for this year.  If this trend extends throughout large companies, the college labor market can be even more robust.

Hiring demand is strongest in engineering and computer science:  fields where employers have an insatiable appetite.  Business majors will remain strong.  Because of changes in CPA credit requirements, a shortage of accountants may materialize this year, as students extend their education to obtain these credits.  Human resources majors will be in demand as companies gear up for retirements.  Probably the best news is found in the sciences and liberal arts majors.

Employers are finding it necessary to differentiate technical skills and information acquisition and manipulation tasks.  Liberally educated graduates bring excellent skills to research, information aggregation, and data presentation.  In addition, employers have found that the complexity of the systems intertwined around them requires individuals who can think and discuss across system boundaries; a great place to utilize a well-prepared liberal arts student.

The recruiting parade will be led by large, manufacturing firms.  These firms have not been as active in recent years.  Their emergence was noted last year and they arrived full-force this year.  Driven to accommodate demographic changes, manufacturing companies will be seeking all types of graduates.  Other sectors with strong hiring growth include food and lodging, retail, financial and professional services.

Employers Paying More But Trying to Stay Within Inflation

Last year employers hoped to increase starting salaries by 3% to 4%.  Many actually had to go higher than this level to remain competitive.  This year employers would like to keep increases at between 4% to 6%.  In terms of dollars for the bachelor’s graduates, this translates into an increase from $35,000-$39,000 to $37,000-$41,000.  These salary figures are strongly influenced by technology salaries.

A few majors can expect salary increases to be larger than 6%.  What is significant is the salary movement occurring at the lower end of the salary ranges.  In other words, the bottom is moving up faster than the top end.

A list in this article provides examples of expected salaries in certain majors.  These salaries do not reflect regional differences nor differences by industrial classification.

Bachelor’s Degree

2000-2001 Expected Starting Salary Ranges ($)

Is There a Signing Bonus for You?

Nearly 45% of these respondents will utilize signing bonuses – but only if forced to by the competition.  Bonuses will run between 5% and 10% of base salary.  Employers are much more likely to offer work environment incentives to lure potential employees into their companies.  The incentives used most frequently included: 

• Training
• Challenging assignments
• Casual work environment
• Relocation reimbursement

Forget those exotic incentives, such as SUV’s and special vacations; not many employers offer them.  A little used incentive, repayment of student loans, may increase in use.  The Federal government is discussing using this incentive to recruit graduates.  If successful, other companies may begin repaying loans.

Are You Qualified for the Job Market?

Employers continue to emphasize the “total package.” It’s not just what a student learns in the classroom.  Repeating this theme from last year’s issue, the total package is described as follows: 

In addition to the “total package,” employers continue to emphasize these skills:

• Web-based technologies:  A working knowledge of Microsoft Office and other Microsoft technologies; JAVA and HTML languages; and application software – Biztalk and Websphere.
• System building (visually and technically)
• Interface analysis (business, technology, and society), which require higher-level critical thinking skills.
• Community involvement:  As boomers take over leadership in companies, a community service commitment is expected to be an important hiring requirement.

Be Prepared!

The opportunities for the class of 2000-2001 appear to be awesome.  However, it may not take but a “hard” economic landing to send the labor market into a tailspin.  To avoid disappointment, seniors need to start their job search early.  For engineers, computer science, and business majors, the preparation and execution comes with the territory.  For some seniors, it’s hard to start a job search and take classes.  That is no excuse for not making preparations now:  work on a resume, network with family and friends, target who you might be interested in working for.  Waiting until spring or after graduation has a negative downside.  This is the slow period for employers.  Starting at this time may well mean a six to nine month job search. Students should use this time to utilize campus resources.  Your career service center and this magazine offer excellent support and input that will make your job search easier.  Be sure you are in a position to capitalize on the array of opportunities awaiting you.