Graduate jobs: In a recession?

Source: Exec Digital Canada

Date :2/13/2008 6:42:29 AM

Employers worry about the lack of basic numeracy and literacy in students entering college; the main concern of the careers services is that their students will be employable in a competitive jobs market.

By John O’Hanlon

Only half joking, a Stanford engineering professor told me the other day that though the dropout rate there is low, as you’d expect, it can be a sign of success rather than failure because it means the students are leaving to start their own companies even before graduating. But most new graduates have to find an employer, and in reality very few entrepreneurs manage to avoid the jobs market altogether.

One sign that the jobs market for graduates is strong has been the apparent return of signing bonuses of $2,000 to $3,500,a phenomenon of the 1990s, to entice newly graduated university students to enter careers like engineering and accountancy that even today have difficulty selling their image, or medicine, which simply needs more graduates than it can get. A 2007 survey by the National Association of Colleges and Employers found that 46 percent of responding employers planned to offer signing bonuses to selected new graduates in 2007.

Uncertainty

However, talking to universities at the beginning of 2008, I encountered an atmosphere of uncertainty, if not exactly alarm, about the likely effects of the ongoing effect of the ‘crisis’ triggered last year by the collapse of the sub-prime property market. Amid talk of a possible recession in 2008, the financial services sector of the country - among the largest employer of new graduates - is inevitably going to look to its cost base. Frankly, it’s likely to be a buyer’s market by the time this year’s graduates hit the streets.

The trouble is that nobody knows quite what will happen. When the employers did their annual round of recruiting in the fall of 2007 they were approaching the careers advisors on a ‘business as usual’ basis: things have got a lot bleaker since then as authorities like former Fed Chairman Alan Greenspan and NBER president Martin Feldstein speculate on a 50 percent chance of a recession in 2008.

The major employers like Goldman Sachs, Accenture and JP Morgan may now be inclined to make fewer signings, with or without bonuses, than they were in November: by June who knows, one careers advisor speculated, they may even be withdrawing some of the offers they made in the fall.

Of course many people feel that talk of a recession is premature. The President has taken effective action to support the economy and in any case he won’t be around for much longer.

It is likely that the economy will turn down for a while but even if it does, the large banks and consulting companies know these things are cyclical and that they last place they should economize is in graduate recruitment. When business recovers they will need their future leaders…

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