The recession did a lot to hurt the job market for management all the way to the recent college graduate. Some of the damage caused still lingers, or at least the effects do, and some say that this will be continuing trend, a hallmark of the first part of this century.
The Bureau of Labor Statistic estimates that in January of 2008 there roughly 677 thousand unemployed new entrants to the civilian job market in the US, that number rose rapidly during the great recession with a high of roughly 1.4 Million around March of 2012 which supposedly after the “official” part of the recession was now over. Today, about 1 Million new entrants remain unemployed. This includes both college educated and those who opted to do something else.
If you consider a reasonable cross section of the unemployed, those who left the workforce, those looking for part-time work, those looking for full-time work between the ages of 20-24 (college graduating age for most), you will find that the jobless rate for the collective group reached 16% at the height of the job recession in 2010. Today, it stays around the 10%-12%. To compare this to non-recession times, in 2007 it hovered around 7.5%.
By any quantitative or qualitative measure, these numbers are important. Consider that, there was a point where new job seekers were unemployed at a rate roughly comparable to that of the general workforce as a whole, then consider that during and now after the great recession they are averaging 1.75 to 2 times the national average. That means that for every one unemployed person above the age of 25 there are 2 job seekers unemployed between the age of 20-25. This is in a climate where college tuition rates have skyrocketed and many have to be employed to pay for school expenses. Some argue that this is because of the entrepreneurial spirit of the next generation, and that they seek to become stars, bloggers, and inventors, but there is simply no evidence that this is a driving trend on their employment choices.
The Perfect Storm
Rya-Conrad, an executive director for The Fullbridge Program argues that it’s a combination of factors none of which relate to the effects of the economy, “what’s really clear is that…college graduates today will have an average of 29 jobs before they retire, 30% of the workforce is engaged in freelance [work], 60% of recent grads are underemployed in jobs that don’t relate to their field of study, [and] millenials expect different things from work [which makes them] motivated to consider more options where they would get to make a difference,” she says.
But, weren’t all these variables existent before the recession? As a Gen-Y, I feel that all these variables were around and in full force as I was getting ready to graduate college, and it certainly did not stop me from getting my first job offer before graduating. The general theme was that there are plenty of jobs and the only question for us was whether we were good enough. Still, that’s just my localized, anecdotal point of view, and not a valid response.
Here’s one interesting statistic found in a study conducted by the CEB: “Millennials apply to the same number of organizations and participate in the same number of interviews as candidates of other generations, but they receive 12.5% more offers,” says Donna Weiss, managing director at CEB. If you have been following my explanations closely you would immediately see that this single statistic throws everything into disarray. How could new market entrants have a higher level of unemployment when compared to the overall workforce, and the same time receive more offers?
The CEB study doesn’t tell us about why this is happening only that it is happening. In fact, in my research I found little to nothing that could clearly explain why so many recent grads were unemployed by almost double the national average, while on average receive the same opportunities for interviews, and more job offers than the average workforce.
There are a number of theories that could potentially explain the disparity. Dan Campbell, CEO of Hire Dynamics and former chairman of the American Staffing Association tells me about the number of factors contributing to the challenges of market entrants. “It all depends on what you’ve studied,” he summarized. “[There are] 207 occupations where it was still difficult to find quality people, but if you’re graduating as a cloud developer, then you have 9 jobs for every candidate.”
I found that interesting because it’s true that occupation-based unemployment for market entrants is quite variable.Campbell tells me that 75% of employers say that they can be more selective in their hiring, but at the same time 80% of them are having difficulty filling their jobs. And, the average time to fill for the average job has jumped from around 90 days to 180 days because of it. He also shares that factors such as employers being less wiling to relocate candidates to different geographic markets, and job seekers being less willing to relocate doesn’t help either.
And when it comes to the all-inclusive reason we use to justify pretty much anything the world today – globalization – there appears to be no consensus on whether this is causing new entrant job markets to be more competitive or not. “I don’t buy the ‘global economy’ argument. America is predominantly a service economy and most jobs that are in the global context are still more manufacturing-related. While providing services globally continues to increase, it is highly concentrated in the IT sector,” explains Jon Broder, an attorney and entrepreneur who owns 3 successful recruiting agencies.
Frank Britt, CEO of Penn Foster says that a byproduct of the recession was the creation of “grey collar” jobs that “combine practical skills with selective white collar technical capabilities in…industries such as solar installation, pharmacy technician, and diesel engine repair.” But for the majority of those I simply don’t see how market entrants benefit.
If you put all those factors together a clearer picture begins to emerge, not one based on economic hardship due to the recession, or a more competitive market resulting from globalization, but one based on the correct alignment of skills produced from primary and secondary education to modern job needs. We’re simply not producing the necessary skills for new market entrants to even get hired into the market quickly, never mind succeed.
This is nothing new, and both scientists and practitioners of the social fields have lots of evidence to support it, but it does explain the perceived job finding hardships that new job seekers experience.
If we were to assume this conclusion as correct it means that schools and colleges are not being successful in achieving their respective mission. It means that curricula have to finally adjust to the demand of the modern workforce. It means that it no longer makes sense to spend $150,000 on a college education, when you can buy $100 worth of programming books and learn the same skills – which by the way – is a growing trend among hiring technology and software developers. It also means that business will now have to come in and help out in the educational system as well. Many large corporations are already doing that at the college level, but soon, they’ll have to start engaging earlier level academic development.
This, like anything else, has positives and negatives for all to see and surmise, but regardless of the dangers of this oncoming trend, today it has reached a point of becoming a necessary danger.
What do you think? Share your thoughts in the comment section below…