If you are a current or soon-to-be graduate, you may be feeling uneasy about finding a job in the future. In fact, this is the fear most commonly felt by students over the course of their entire study process.
We’ve done some massive research to find out what aspects of job searching for recent graduates are actually worth worrying about. Below you will find facts and numbers we’ve put together for you, highlighting the current job market situation. Spoiler alert: things are looking good.
Find some key college graduate employment statistics below.
Positive tendencies in recruitment for fresh graduates
- The survey Recruiting Trends, highlighted by Forbes, showed that the hiring of college grads was expected to jump 15% in 2016.
- This makes it the second year in a row that the survey has shown double-digit hiring growth. In 2015, hiring climbed by 16% over the year before that, which was an especially significant jump given that 2014 showed only a 7% increase.
- 67% of hiring managers and human resources professionals in the US reported to CareerBuilder that they are willing to hire recent college graduates during 2016. That went up from 65% the year before that – and it’s the best outlook since 2007. “More companies are looking to hire students straight out of college than any other time in almost a decade,” commented CareerBuilder’s CEO Matt Ferguson.
- The report by the National Association of Colleges and Employers showed a confident 5% growth in graduates from the class of 2016 expected to be hired, compared to the previous year. Although the number doesn’t sound as impressive as those shown by similar studies, it is still promising for the grads of 2016, who are entering the best job market in years.
- The EU market tendencies are looking good too, with the UK in particular showing that their graduate recruitment expanded by almost 8% in 2014, which was expected to be followed by a further 8% rise in 2015. In 2016, the country’s top employers were planning to hire 7.5% more graduates than in 2015.
- According to the 2016 US Job Forecast, more and more employers are looking for opportunities to build relationships with students at an early age – 25% of employers were planning to hire high school students as interns over the 12 months following the survey. There was a general intention within the employers to encourage the next generation to pursue STEM (science, technology, engineering and math) fields as well as other in-demand areas.
Top hot careers for recent graduates
While there is no doubt that the employment picture for grads is now looking brighter than ever, finding a first job may still be a challenge on an individual level.
Not only must recent graduates decide which jobs will give them the best opportunities to use their talents, capabilities and previous experiences; they also need to find a position where a decent salary is combined with promising career prospects. Here’s some information on fields which are seeing the biggest demand for new specialists.
- The graduate jobs market in the UK is seeing significant shortages in some areas, as highlighted by The Guardian. The top 5 key sectors experiencing this issue are:
- building and construction
This would be a particularly great time to graduate as an engineer, as The Guardian tells us, but don’t despair if you aren’t one: there are plenty of areas in the economy which are short of graduates and therefore offer good employment opportunities. Quantitative social scientists are in demand, for one. Therefore, if you’re graduating from geography or psychology, you may consider giving your stats and data management skills a bit of a polish.
- While science and engineering majors seem to be getting the biggest salaries in the US market, business majors follow them closely and are also the most in demand. More than 75% of employers have business majors in the list of grads they would like to hire.
- According to 2016’s Emerging Careers Report by UC San Diego, the top 5 emerging careers for college graduates across the US are: software developers (projected growth in 2014–2024: 18.8%), accountants and auditors (10.7%), computer systems analysts (20.9%), medical and health services managers (16.9%), sales representatives in wholesale manufacturing/technical and scientific products (6.9%)
- The demand for software (applications) developers is expected to grow by 23% between 2012 and 2022, according to UCSD Hot Careers This is faster than the average for all other occupations.
- For those who consider that choosing an employer is as important as the position itself, there is the Fortune ranking of the top workplaces for fresh college grads. The ranking takes into account a volume of job growth, and recruiting and hiring numbers. Quick fact: probably the most desired employer in the world – Google –took only the #17 spot in this ranking.
What are the starting salaries like?
Obviously enough, your choice of major, as well as your first career steps, will have a huge impact on your salary in the future.
But don’t get us wrong.
It’s probably not worth it to base your career decisions purely on how much money you’re likely to make. And yet the financial factor is a rather significant one and has to be taken into account when choosing a future job.
At least we think so.
And that’s why we’ve also put together some facts and numbers regarding the earning potential behind some different career paths.
- The overall good news is that 37% of employers were planning to offer recent college graduates higher pay in 2016 than in 2015, according to CareerBuilder Survey.
- The same survey showed that 27% of employers hiring recent college graduates in 2016 intended to pay a starting salary of $50,000 or more.
- Although the salaries were increasing overall, the STEM majors are still making consistently more than their humanities peers. The average 2016’s engineer graduate is expected to earn $64,891, and petroleum engineers were estimated to make an average of $80,600 in their first year out of college, according to 2015 data.
- The highest-paying bachelor’s degrees, according to PayScale college salary report, are as follows:
- petroleum engineering (early career pay $96,700)
- systems engineering (early career pay $66,400)
- actuarial science (early career pay $60,800)
- chemical engineering (early career pay $69,800)
- computer science & engineering (early career pay $71,200)
- Among humanitarian degree holders, those with a history major seem to perform the best. In an attorney/lawyer position, they get a mid-career pay of $159,000, on average.
- The second best paying humanitarian major is English Literature (or Language & Literature). By the middle of their career, graduates holding this degree make $92,200 as editorial directors, $91,200 as exclusive editors and $90,500 as content strategists.
- An English major is the most common degree held among those who studied humanities. It doesn’t rank the highest, but college graduates with an English major who are between the ages of 25 and 59 make an average $53,000, which is $17,000 more a year compared to those with only a high school degree, and only $8,000 less a year than an average salary across all college degrees.
- “A surprising number of Senior Marketing Directors hold a bachelor’s degree in English Literature,” PayScale’s 2016–2016 college salary report states. “With a median mid-career salary of more than $100,000, that’s a good argument to use against anybody who says English is a waste of time.”
Interestingly, the choice of major within the college seems to be much more important than the choice of college itself, at least when it comes to future earnings.
- According to director of Georgetown University’s Center on Education and the Workforce, you are expected to make $1 million more, on average, over your lifetime if you graduate from college, compared with someone who only went to high school.
- At the same time, you would make, on average, $5 million more over your lifetime if you got a degree in energy based engineering.
So it’s mainly what you study that matters, not the college you go to.
While the numbers above may make it a little more clear when it comes to what to expect, bear in mind that those are average numbers, which means there is always a chance that you’ll be an outlier. There are countless factors – first of all, your own abilities and effort, your personal connections and your determination – that will contribute to how much cash you’ll be bringing home at the end of the day.
But there is another question that keeps many soon-to-be graduates awake at night.
“What are my chances of remaining unemployed after graduation?”
We’re used to thinking that it’s a struggle for recent graduates to find a job. In fact, ending up without any job at all is really not very likely anymore. In the US, the unemployment rate for graduates is around 10%.
- In 2015, the number of unemployed American graduates holding a bachelor’s degree was 9% for males and 12% for females, as reported by National Center for Education Statistics.
- The unemployment rate of all American workers under the age of 25, according to the Bureau of Labor Statistics, was 12.3%, and the overall unemployment within all age groups was 5.5%.
- While the US market doesn’t suffer much from unemployment, others do. In the UK, nearly 40% of graduates are still looking for a job half a year after graduation, and a quarter remain unemployed after a whole year, as highlighted by The Telegraph.
Overall, the hiring figures for recent graduates look good and are expected to increase. The huge unemployment rates were mainly due to the 2007–2008 recession aftermath, and they have been steadily decreasing since 2011. Underemployment, meanwhile, is increasing – and that is bad news for new job seekers.
Unemployed vs. Underemployed. Here’s the real threat for every recent graduate
Finding a job – any job – may seem like a critical point. But the reality is that “employed” does not necessarily mean “satisfied”. Having a job which is below one’s expectations, ambitions and skill levels leads to decreased self-esteem, atrophied skills, and disengagement from the working process. So-called “underemployment” is dangerous in many ways – and very common. For instance:
- 51% of recent graduates in the US feel that they are underemployed, as reported by Accenture Strategy’s 2016 US College Graduate Employment Study.
- This number has climbed steadily, from 41% in 2013, to 46% in 2014, and to 49% in 2015.
- That means that the percentage of underemployed grads has risen 10 points over the last 3 years.
- 79% of those students considered job availability before selecting their major, which is further proof that the job market is changing faster than it would be easy to follow.
- Some disturbing numbers published by The Telegraph show that in the UK around one third – or 60,140 – of employed graduates were in jobs that do not necessarily require a degree.
- Of that one third, 13,985 graduates had administrative and secretarial jobs, and 10,855 had elementary level jobs such as waiters, bartenders, hospital porters and office juniors.
Bottom line: unemployment is bad, but underemployment is not that much better, and the two combined seem to be a significant threat. So let’s get to the figures which might give us some hints on how to avoid either situation.
How to become and stay competitive in a rapidly changing labor market
One of the key reasons for fresh grads not getting their dream job may be that, while they believe they are prepared for the job, their potential employers do not share this belief. There is statistical evidence of the dissonance between employers’ ideas around what is a well-prepared candidate versus that of job seekers.
- A study from theAssociation of American Colleges and Universities showed that, quoting Forbes, “new graduates are more than twice as likely as employers to think of themselves as well-prepared, especially in soft skills like communication, creativity and critical thinking”.
- The CareerBuilder’s survey, which included more than 2,000 hiring managers and human resource professionals, showed that nearly a quarter (24%) of employers do not feel that academic institutions are giving the students adequate preparation for jobs available within their organizations.
- Out of those, 47% pointed out the problem that book learning prevailed over real-world learning.
- 39% wanted to see a candidate who has both technical skills and those gained from liberal arts.
- 25% said that entry-level roles in their organizations became more complex for recent graduates to handle.
The curious thing is that, while the employers are complaining about the fresh grads’ decreased ability to contribute, the graduates themselves seem to believe that it is large companies who are to be blamed for underemployment. Presumably, they think that smaller companies tend to have a more personal approach, which increases the chances of their talents being noticed.
- 44% of fresh college graduates are willing to be employed by either a medium-sized business or a small business/start-up.
- Only 14% of 2016’s grads would like to be hired by a large corporation, and this number has been steadily decreasing.
But, large company or small, what exactly are the qualities that they would like to see in their future employees?
- When asked about which skills college graduates lack the most, US employers cited interpersonal skills (52%), problem-solving skills (48%), leadership (42%), teamwork (39%), written and oral communication (37%) and creative thinking (35%).
- Employers in the UK and India have a similar enough opinion, pointing out that recent graduates have a lack of interpersonal skills (49% in the UK, and 50% in India), problem-solving skills (40% UK, 60% India) and creative thinking (39% UK, 56% India).
- The Association of American Colleges & Universities found during a recent survey that most employers value the knowledge of human cultures and the physical world, in particular understanding democratic institutions and values (87%), broad knowledge in the liberal arts and sciences (78%), and understanding of cultures and societies outside the US (78%).
- 91% of employers agree that for career success “a candidate’s demonstrated capacity to think critically, communicate clearly, and solve complex problems ismore important than his or her undergraduate major”.
So here is the question:
If so many employers believe that today’s graduates do not really measure up, is it even worth it to aim for good education?
Yes, we believe it is.
More importantly, the statistics say so, too.
Stay with us for the details.
Here is why everyone needs to pursue higher education
- As the US National Center for Education Statistics tells us, the employment rate for those between the age of 20 and 24 with a bachelor’s degree (or higher) was 89% in 2015, while for those with some college education but no bachelor’s degree it was 76%.
- At the same time, the rate for those who had only completed high school was 67%.
- Those who had not even finished high school had an employment rate of only 51% in 2015.
So obviously while not having an education at all would give you a 100% guarantee of not getting employed, getting a degree provides significantly better chances. And here is what’s more important: in many areas there is a persistently growing difference between the numbers of posted jobs in some fields and the numbers of hires, leaving a huge gap for fresh grads to fill. In particular:
- In the US, 689,685 computer and IT jobs were posted between January 2015 and January 2016. The average number of people hired during the same period was 209,035, which makes a gap of 480,650 positions.
- STEM-related fields seem to have the most critical gaps, but there are many other areas which aren’t producing enough graduates for the growing labor market. Among them are HR management (gap of 21,736), legal assistance (gap of 10,952), economics (gap of 10,583) and graphic design (gap of 2,350).
- 63% of employers admit that they are concerned about the growing skills gap in the US.
While demand for high-skill labor is growing rapidly, often faster than supply, demand for low-skill labor is decreasing. Here are some of the challenges the labor market may face by 2020, as seen by McKinsey Global Institute:
- 13% of the demand for college or postgraduate degrees will not be satisfied. There will be 38 to 40 million fewer graduates than employers will need.
- Further, 15% of the demand for workers with secondary education in developing economies will not be satisfied. 45 million more workers will be needed.
- There will also be an 11% oversupply of low-skill workers (those who didn’t go to college in advanced economies, or those without secondary education in developing economies). There will be 90 to 95 million more of those workers than employers will need.
So if you are right now struggling through those tough college or uni years, remember that you are doing it for a good reason. You’re creating better possible outcomes for your future self in the labor market. Which is, of course, not the sole purpose of higher education: no matter what, you’re gaining the priceless skills of critical thinking and intellectual curiosity, which will assist you in every endeavor throughout your life.