It wasn’t too long ago when the headlines were full of good news for younger career professionals.
Prior to Labor Day, 2022 -- when an army of newly-minted college graduates was expected to hit the job market -- labor experts viewed the job sector with a mostly positive outlook.
For instance, on May 25, 2022, Santa Monica, Cal.-based Zip Recruiter said new college graduates were entering a “sizzling “job market with two job openings for every unemployed person.
“Employers are rolling out the red carpet for grads with perks like signing bonuses (nearly 800% growth in recent years), remote work options, help with student loan payments, and vacation stipends,” the online employment services company reported.
That was then and this is now.
Two short months later, the Federal Reserve Bank of New York reported that “recent college graduates” has surpassed the national unemployment average every month since the beginning of 2021.
Through March, 2022, the U.S. general unemployment rate stood at 3.8%, compared to 4% for younger college-educated Americans. Three months later, the U. S. unemployment rate slid to 3.5%, while the jobless rate for new college grads rose to 4.1%.
That’s a clear contrast to the period between 1990 and 2018 when Americans aged 22 to 27 held a significantly higher chance of landing a new job compared to all other U.S. age demographics.
A 'Tough' Market
What’s going on with a flip-flopping labor market for college graduates?
“We're hearing that things are tough out there for new grads with some companies rescinding job offers,” said Lisa Severy, PhD, a certified career counselor at the University of Phoenix. “This job market is certainly chaotic and none of the patterns that we used to rely on seem to hold true anymore. Usually, a job market seems advantageous to either employers or job seekers, but right now it feels like everyone is struggling."
Historically, the job market is reliably tough for new grads because, unlike experienced workers, new grads often have little on a traditional resume that demonstrates their potential.
“What makes matters worse right now is the collective whiplash job seekers are experiencing,” said Scott Dettman, chief executive officer of Avenica, a talent recruitment and career placement firm in Minneapolis, Minn. “Just a few months ago, companies were dropping experience requirements while also offering well above market pay to attract talent, but now, with talk of a recession looming, companies are opting to cut back on training and hire only experienced candidates.”
That move tends to backfire over time.
“When companies pay more than they should for what they perceive to be greater experience, thinking they can achieve a quick ramp to productivity, they’re often disappointed with the results and end up cycling back to a focus on hiring for culture first and experience second.”
Upbeat News on the Horizon?
The good news is that the market is not as toxic as some say – at least, not down the road.
“Yes, companies are leaning toward experienced hires but many experienced hires have already switched jobs in the past year and are aware of the risk and difficulty in doing so again,” Dettman said. “As a result, many companies are unable to find experienced talent and will need to cycle back to a new grad hiring strategy sooner rather than later.”
That doesn’t mean recent college graduates should sit back and wait for the job offers to roll in.
“While the majority of recent Gen Z college graduates have successfully secured their first job, the labor market is still very competitive,” said Mark Beal, assistant professor of communications at Rutgers University-New Brunswick. “New college grads seeking their first job need to take a proactive and strategic approach to secure employment. They can't rely solely on being reactive and responding to job posts.”
Younger job-seekers also need to proactively research and rank as many as 20 potential employers and then leverage their network of family, friends, and professionals to secure informational interviews at their target companies, Beal advised.
“The ultimate goal is being recommended for an open position,” he said. “That type of proactive approach will successfully lead to employment.”