Young professionals coming out of undergraduate, graduate and other professional schools are entering the job market at one of the worst points in the last 30 years. Competing against the hundreds of thousands of other Americans who have lost their jobs over the last year, these recent grads are turning not to established businesses for employment, but to themselves.

Young Entrepreneurs Get Savvy

Many financial experts say the best time to start a business is during a recession, when costs are low and innovation is critical. Thus, many 20-somethings are taking the initiative, especially on the Web. "You're going to see a lot more new entrepreneurs," says Jeanne Branthover, managing director of Boyden Global Executive Search.  "There are really creative ideas coming out. Those are the good things that happen in a bad time."

"It used to be that you had to get some experience and then start a business," adds Kim Bishop, vice chairman of Slayton Search Partners, who teaches a class at the Learning Annex about making a career change at any age. "But I see young professionals aligning themselves with strong mentors and advisers."

The narrowing job market isn't the only thing that might hamper young professionals' careers right now. "This is a generation whose older siblings were in the workforce during the dot-com era, and whose parents may have been the last generation to have held one job with one company for more than 20 years," says Clem Johnson, a partner at Crist Associates, an international executive search firm. “Their attention span is short, loyalties are fleeting, and their expectations are high that they will be challenged and rewarded – sometimes disproportionately relative to their experience. That said, their perception of risk is very different – these are people who expect to have dozens of mini-careers rather than one long career arc.”

Nevertheless, Johnson says that Generation Y does have qualities unique to their generation, such as intellectual drive and heart, which will help them in the long run. "The trick for employers is to be able to harness that energy productively and to retain and develop young talent creatively while unleashing their potential."

Fight or Flight to Grad School
For those not starting up businesses, many are going back to school to get a degree that can put them ahead of the pack later. "When hiring constricts among young people, we often see a flight to graduate programs," Johnson says, "That said, the expense of those programs (and fewer employers willing to sponsor them) creates a barrier, so the entrepreneurial path is embraced more than we have seen in previous cycles. This generation is all about options, so the breadth and flexibility of an MBA is attractive."

What advice do career experts have for young professionals? "Looking for a job is a full-time job," says Mitchell Feldman, president of executive placement firm A.E. Feldman and Associates. Also, experts agree that young job candidates need to be creative and make themselves stand out. "Remember, you have an incredibly bright future," says Johnson, “but no one is going to hand it to you."