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Recruiters Still Courting College Grads, but Signing Fewer New Hires

March 25, 2009
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Related Topics: Strategic Planning, Workforce Planning, Featured Article, Recruitment
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Recruiters are still roaming college campuses to recruit 2009 graduates, but they are targeting specific skill sets and making a smaller number of offers.

Despite the downturn, 59 percent of employers are conducting on-campus interviews during the 2008-2009 recruiting season, according to a nationwide survey of 945 employers by the Collegiate Employment Research Institute at Michigan State University in East Lansing.

"Employers want their recruiters on campus because they don’t want to lose their brand with young adults," says Phil Gardner, a director at CERI. "But hiring levels are down for all degree groups."

About 1.5 million undergraduates will receive their bachelor’s degrees this year.

They will collide with 1.85 million workers with bachelor’s degrees or higher who are currently unemployed. Although the unemployment rate for workers with degrees remains at a relatively low 4.1 percent, the rate has doubled in the past year and increased faster than the rate for those with no college, in large part because of widespread layoffs in financial and business services.

While the recession accounts for a large part of the drop in college hiring and the rise in unemployment among workers with degrees, the numbers also reflect a long-term trend toward producing more college graduates than labor markets can absorb. This trend is exacerbated by an equally long-standing mismatch in the fields of study that students pursue and the skill sets that employers require.

Recruiting process
The CERI survey report notes that labor markets generally favor young adults in recessions, and 29 percent of the employers in its current survey indicate that they have shifted their hiring in favor of new college graduates over experienced workers. According to the survey report, human resources managers note that some companies are moving away from experienced hires to concentrate on the new college graduates, primarily because of costs.

Companies spend an average of 20 percent of their recruitment budgets on campus recruiting, according to CERI. The campus recruiting budgets cover funding for various activities, including 12 to 15 percent to manage internship programs, 15 percent to attend job fairs, 21 percent to sustain on-campus recruiting and 30 percent to post positions on Web job boards. Employers rate internship programs and on-campus recruiting as the strategies with the highest return on investment.

Because of cost considerations, many employers are now concentrating their efforts on career fairs, which have seen a resurgence after several years where targeted recruiting had lessened their appeal. Two-thirds of employers are participating in career fairs for the 2008-2009 recruiting season, according to the CERI survey.

Sixty-four percent reported that they post positions with Web providers, down nearly 15 percent from the previous three years. Cost considerations are a likely factor as companies attempt to reduce both travel expenses and listing fees.

The survey report also notes an increase in the use of campus referrals, with 58 percent of employers reporting that they are using this approach. Some employers are demanding direct access to faculty in an effort to identify the best candidates.

In fact, 29 percent of employers want to work directly with faculty and an additional 14 percent want to work directly with advisors if faculty are not available, according to CERI. More than 40 percent of employers would like to bypass some, if not all, of career services.

Companies vary in their arrangements and sequencing for the selection and interview process. Regardless of the specific steps taken, most attempt to conclude the process in 3½ to five weeks, according to the CERI survey. The average time between the first and second interview is 2½ weeks, with the candidate notified of the decision within 1½ to two weeks after the second interview. Some employers reported that they do not conduct a second interview and conclude the hiring process within 2½ to three weeks.

A substantial majority of employers allow candidates no more than two weeks to accept or decline a job offer. In fact, 40 percent indicated that they give candidates less than a week to decide on an offer. An additional 45 percent allow candidates one to two weeks; only 5 percent will extend the window beyond three weeks.

Persistent mismatch
In a CollegeGrad.com survey of the 500 companies that hired the highest numbers of new graduates in 2008, the respondents ranked the student’s major as their first consideration in making hiring decisions. For the past three years, employers have targeted new hires for a broad range of positions, according to CERI, but this year witnessed a constriction in the breadth of positions targeted for recruitment, with companies focusing more narrowly on technical and business functions.

The mismatch between the fields of study selected by college students and open positions in the labor market has plagued employers for many years, but this recession has thrown that mismatch into sharp relief.

Despite the high numbers of unemployed graduates and the overall decline in college hiring, CERI reports that 36 percent of employers anticipate moderate difficulty in securing the graduates they need; 14 percent anticipate difficulty. Employers seeking health professionals, engineers, computer scientists and scientists—particularly agricultural scientists—are the most likely to anticipate difficulties in hiring the necessary talent.

"There is built-up demand for certain majors, particularly in the agricultural and food sciences, engineering and IT," Gardner says.

Forty percent of employers surveyed by CERI indicated that they expect to hire business majors, 36 percent plan to hire engineering majors, 18 percent are looking for computer science graduates, and 15 percent are seeking science majors. Only 6 percent are looking for liberal arts or humanities graduates and just 5 percent are looking for social science majors, which are among the most popular majors.

In 2006, the last year for which full data are available, U.S. colleges produced 83,297 new graduates in the visual and performing arts, but only 67,045 in engineering; 88,134 new graduates in psychology, but only 47,480 in computer and information sciences; 25,490 in recreation and fitness studies, but only 20,381 in the physical sciences and 14,770 in mathematics and statistics, according to the National Center for Education Statistics. Colleges awarded 161,485 bachelor’s degrees in the social sciences, but only 91,973 in the health professions.

The mismatch continues at the graduate level, where 19,770 students received master’s degrees in psychology, compared with 17,055 in computer and information sciences; 13,530 received master’s degrees in the visual and performing arts, compared with 8,681 in biology and biomedical services. The country produced 6,092 new theologians, but only 4,730 new master’s degree graduates in mathematics and statistics.

According to CollegeGrad.com’s survey of the 100 companies that hire the largest numbers of master’s degree graduates, this year’s most sought-after graduates are those with accounting, engineering and computer science degrees. Together, these top three majors account for 63 percent of all master’s hiring in 2008.

At the aggregate level, U.S. schools continue to produce more college graduates than the country can absorb. Consequently, many graduates end up unemployed or in jobs that do not require a degree. As of February, the labor force included 45 million workers with a bachelor’s degree or higher—29 percent of the workforce, according to the Bureau of Labor Statistics. The BLS estimates, however, that only 24 percent of jobs require a degree.

"We may be producing too many graduates," Gardner says. "A lot of students are attempting a four-year school because they are convinced it’s necessary to get a job, but many will not be better off. Also, a lot of jobs that employers say require a college education do not provide good returns."

Many graduates are locked into $30,000-a-year jobs without much of a future, and they are saddled with student loans. Nearly three-quarters of all 2008 graduates have student loans, according to a survey of 4,000 students by CollegeGrad.com. Of those with loans, 37 percent expect that it will take them more than 10 years to pay them off; 21 percent expect it will take five to 10 years.

Bad hires
Hiring decisions clearly focus on skill sets, but firing decisions shift to other concerns. According to a 2007 survey of employers by CERI, the top six reasons for firing college graduate new hires are unethical behavior (28 percent), lack of motivation/work ethic (18 percent), inappropriate use of technology (14 percent), failure to follow instructions (9 percent), late to work (8 percent) and missing assignment deadlines (7 percent).

"New hires are held accountable for their actions, but this is not addressed in the hiring process," Gardner says. "I’m not convinced that the selection process is effective. Recruiters are young and often in recruiting for only a few years. Employers think that they need to send young recruiters to the campuses because they will better connect with students, but often their own behavior does not model what is required for new hires and employers do not articulate what is expected."

For 2009 graduates still struggling to find jobs, relying on campus recruiting may not be productive.

"The key issue for schools now is how to broaden student contact with small and midsize employers who are doing 60 percent of all the hiring but never come on campus," Gardner says. "Schools are using LinkedIn and heavily utilizing alumni networks to open up possibilities with small and midsize employers."

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