The stars are aligning for next springâ€™s crop of graduating college seniors who are about to leave the security of college life and run headlong into the often-cruel adult job market.
Future employment prospects for those with degrees are as good as they have been in nearly 20 years and 2019 graduates with their newly-minted diplomas can expect:
- to find jobs easily and quickly
- be paid more than their 2018 counterparts
- receive a full set of benefits
- be offered signing bonuses in some cases
- get hired for positions for which they may have no experience or skills, and
- have any wild and crazy past behavior (that landed them in serious trouble) be deemed irrelevant.
â€śWe havenâ€™t seen this in a long time. We had a run like this in the 1990s â€” that was the dot-com era,â€ť said Phil Gardner, director of Michigan State Universityâ€™s College Employment Research Institute. â€śBut itâ€™s been 20 years since conditions were like this,â€ť he added.
The institute, which uses the acronym CERI, recently released its 48th annual report on recruiting trends for graduating college students.
Trends were derived from a survey of 3,300 employers, of which nearly three-quarters indicated they were recruiting full-time employees or had hired managers to oversee talent acquisition.
The key finding was that 83 percent of those surveyed had hired at least one college graduate last year, and of that group, 98 percent intended to hire college grads this year.
Overall, employers surveyed expressed â€śthe highest level of optimism in the labor market since the late 1990s,â€ť the report said. Businesses planning to increase hiring likely will add between 1 and 5 positions, it added.
Factors include organizational growth, employee turnover
CERI has gathered 10 years of data on potential influences on the college labor market, and this year it found that organizational growth and employee turnover were the two biggest factors driving hiring decisions.
Those citing growth remained at about 66 percent as it has over the past four years.
But 61 percent of employers said turnover was forcing hiring decisions, up from 57 percent last year.
â€śTurnover, that is, people looking for new jobs â€¦ is really giving an emphasis to the college market,â€ť Mr. Gardner said. â€śEmployers find they can get a college student versus a competitive, experienced person much easier in this market,â€ť he said.
Whatâ€™s more, because of the tight labor market with unemployment at just 3.7 percent through October, Mr. Gardner said if students are ready to transition to the workforce, but donâ€™t necessarily have the right job experiences, skills, or attitudes, â€śemployers are giving them a pass until they get their acts together.â€ť
Sectors most affected by turnover include: accommodations and hospitality, education services, government, healthcare and social assistance, and arts and entertainment.
Sectors most affected by growth include: administrative services, construction, finance and insurance services, mining and oil production, professional, business and scientific services, real estate and leasing, transportation, utilities, retail, and wholesale trade.
Transportation, health care sectors among best bets
Since the great recession bottomed out in 2010, the college labor market has had solid growth for eight years, including an average of 15 percent in the past four years.
Mr. Gardner said this year the college labor market may be on the cusp of a slowdown period since 2018 growth is going to top out at around 9 percent. â€śIâ€™d say weâ€™re in the 8th inning of this. I canâ€™t get past this year on my predictions,â€ť he said.
Seniors headed to graduation this year will have a plenty of opportunities to enter the workforce based on employers surveyed who said they plan to hire nearly 63,500 new graduates by the spring, with 80 percent of the hires being students earning four-year bachelorâ€™s degrees. About 70 percent last year had bachelorâ€™s degrees.
Compared to last year, the best bets for jobs for those with bachelorâ€™s degrees are in seven segments: transportation, administrative services, educational services, information services, nonprofits, health care services, and hospitality.
On average, transportation firms will hire 16 college graduates, up 34 percent from last year; administrative services 19 grads, up 30 percent; educational services 60 grads, up 29 percent; information services 13 grads, up 26 percent; nonprofits 84 grads, up 16 percent; health care services 34 grads, up 15 percent, and hospitality 6 grads, up 14 percent.
The study shows starting salaries will rise between 1 and 20 percent from last year with the average expected rise in starting salary to be 4.3 percent. Small employers (500 or fewer workers) will raise salaries an average of 4.4 percent, larger companies 3.9 percent.
Starting salaries will increase more than 5 percent for: agriculture and natural resources; mining and oil; construction; transportation services; real estate and rental services; administrative services; arts, entertainment and recreation, and nonprofit organizations.
They will increase between 4 percent and 4.9 percent for: manufacturing; wholesale trade; information services; finance and insurance; business, professional and scientific services; health care services, and accommodations and food service.
Lastly, they will increase between 2 percent and 3.9 percent for: utilities, retail trade, education services, and government.
â€śAlmost 50 percent said they are going to raise salaries,â€ť Mr. Gardner said.
â€śThe other big thing in there not salary-related is the number of employers who are beginning to use signing bonuses again,â€ť he added. â€śMany had stopped and this year only 20 percent say they are going to do this but that is still significant.â€ť
Signing bonuses on average are expected to be up to $5,000, but 8 percent said they planned to offer between $5,000 and $10,000. One percent planned to go higher with the highest at $25,000.
In lieu of bonuses, many employers planned to offer generous benefits as a higher lure.
The report shows 91 percent would offer comprehensive medical insurance, 90 percent paid vacation time, 86 percent sick and personal days, and 83 percent retirement savings options.
Another 77 percent planned to offer life insurance, 77 percent professional training, and 65 percent flexible healthcare accounts.
Other perks included flexible schedules, 43 percent; alternative work sites, 23 percent; paid parental leave, 21 percent; assistance with college loans, 18 percent, and child or dependent care assistance, 10 percent.
â€śIt all has to do with the very tight labor market and there’s just not a lot of room to wiggle on this thing. Colleges for various reasons are just not putting out as many college graduates,â€ť Mr. Gardner said. â€śHigh school graduate numbers are down, ethnic minorities are struggling to get into colleges, and high schools are not doing a good job of getting kids into the right places to succeed,â€ť he added.
Recruiters, according to the report, are finding skilled trades and high-skilled medical positions are the hardest fill. Difficult positions to fill are in construction, engineering, science and mathematics, and skill technicians.
The easiest positions to fill are in accounting; art, design & advertising, communications and public relations, and human resources.
Mr. GardnerÂ said the tight labor market has had one other interesting effect: amnesty for past transgressions.
â€śThey donâ€™t have a choice, so a marijuana violation? Theyâ€™re likely to forgive. A DUI? Theyâ€™re willing to forgive,â€ť he said. â€śFelonies and harder drugs, theyâ€™re probably not going to forgive that, but smaller problems? Yes,â€ť Mr. Gardner said.
â€śEmployers just donâ€™t have much choice right now, so they’re willing to give people a pass on some things that used to be a problem for them,â€ť he said.
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