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After a Lull, Salaries and Bonuses for New College Graduates Rebound

August 23, 2005
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After several years of sluggish hiring, the job market this year presented new college graduates more offers, higher salaries and bigger signing bonuses, harkening back to the go-go ’90s. And as the class of 2006 returns to campus optimistic about its job prospects, companies are sharpening their recruitment strategies, anticipating stiff competition.

“Employers are more confident about the economy and are looking to increase their hiring,” says Mark Smith, director of the career center at Washington University in St. Louis.

Newly minted graduates with bachelor’s degrees received an average of 18 percent more job offers compared with a year ago, according to WetFeet Research & Consulting. MBAs received 11 percent more.

“We kind of have recovered from the dot-com crash,” says Martin Shibata, director of career services at Cal Poly San Luis Obispo. “This was the first full year that I felt was back in full swing. Instead of hiring one or two students, companies were hiring five or 10 students. And students were getting multiple offers.”

Spots for career fairs this fall and slots for interviewing students on campus are filling up faster than in the past two academic years, says Susan Terry, director of Center for Career Services at the University of Washington.

New college graduates also received higher starting salaries than those offered a year earlier, according to the National Association of Colleges and Employers. The average starting salary for marketing graduates was $37,496, a 6.2 percent increase. The average for accounting graduates rose 5.3 percent to $43,269.

MBA salaries also rose. The average reached $90,652, the highest since 2001, according to the Graduate Management Admission Council.

And anecdotal evidence suggests that signing bonuses are rebounding.

Celia Harms, associate director of recruiting services for the MBA Career Management Center at the Stanford Graduate School of Business, says bonuses offered to the school’s graduates increased 33 percent, to a median of $20,000.

Employers are noticing the change in the tide. Taiwan Brown, manager of student sourcing and selection at Texas Instruments, says her company has noticed that candidates are receiving more offers. She expects competition for talent to stiffen in the coming year.

In response, some organizations are trying to build deeper relationships with students in hopes that students are more likely to accept an offer if they already feel at home there.

Booz Allen Hamilton will host more on-site visits for MBA students in top-tier programs, says Julie Martin, senior associate in recruiting services for the consulting firm. That’s in addition to offering mock interviews on campus workshops about résumé writing.

“We’ll practically be living on campus for six weeks,” she says.

The firm also will continue its “externship,” a program begun last year in which undergraduates spend a day shadowing a consultant.

Even companies where hiring hasn’t increased markedly are reviewing their college recruiting.

Dick Hoell, director of global workforce planning and staffing at Sun Microsystems, says his company’s hiring of new college graduates has remained steady in recent years. But Sun is “ratcheting up” its recruitment efforts, Hoell says, expanding the list of universities whose graduates it will target.

“It’s the bullish sense we have about Sun,” he says.

Bryant Ison, a product director at Johnson & Johnson involved in recruiting, says the best and the brightest always are in demand.

“No matter what kind of year it is,” Ison says, “the top students always have three or four offers.”

--Todd Henneman

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