The Class of 2020 Enters Worst Jobs Market in Decades

Not very long ago, the U.S. college graduating class of 2020 was about to spring into one of the strongest labor markets in history. But before seniors could even finish their classes in person, the world turned. Graduates are suddenly facing a full-blown recession due to the coronavirus pandemic, evidenced by mass layoffs, hiring freezes, rescinded job offers and internships, canceled career fairs, and a forecast of high unemployment.

"Beginning in March and into April, there was a significant drop in engagement from employers," said Gian-Karlo Alvarez, SHRM-CP, assistant director of employer relations in the career services office at the University of Central Florida in Orlando. "Tourism and hospitality here in Florida saw a tremendous drop, and internships were put on hold or made virtual as organizations wondered 'What do we do next?' "

Historically, graduating into a recession has resulted in settling for lower-paying jobs and delaying professional careers.

Some insights into the preferences and expectations of the Class of 2020 can be found in the annual "Class of" survey of 500 U.S. college seniors and 500 recruiters and HR professionals conducted by recruitment software company iCIMS. The survey was conducted in mid-March as COVID-19 lockdowns were going into effect across the country.

"The college graduating class of 2020 had big career hopes and expected to be welcomed by a strong job market," said Irene DeNigris, chief people officer at iCIMS. "Our new reality reinforces the need for flexibility, as the center of gravity shifts from a candidates' market to an employers' market."

Up until mid-March, college seniors intended to apply for 10 jobs, according to the iCIMS survey. The average expectation grew to 20 jobs by the end of the month as it became apparent that skyrocketing unemployment would make landing those jobs tougher.

"Most candidates will have to apply to more jobs before securing an opportunity, given the competition for roles as they become available," DeNigris said.

Alvarez said that since May, campus recruiting has started up again. "Summer is usually the lull, but this year has been like no other in my experience—there's been a boom in late employer interest because they know the talent is still available." He said that student interest has also spiked following an initial job-search pause when COVID-19 first hit, and schools cleared out.

David Owens, the director of campus recruiting at Chicago-based national staffing agency Addison Group, believes that the suddenly changed job-search situation has a silver lining.

"I think early career professionals should want to cast a wide net early on and engage in conversations with multiple employers to learn about the different opportunities that are out there," he said. "Candidates previously have been too focused on only a few organizations and can make rash decisions about specific careers or employers without getting a complete perspective that comes from engaging with multiple employers. It's in any candidate's best interest to be able to compare and contrast the different opportunities and whittle them down to what aligns best to career goals."

It's also important to realize that the jobs outlook isn't one-sided. New graduates may find themselves with a surplus of opportunities in certain fields.

"As expected, we're seeing an increase in the demand for first responders, health care professionals and a wide range of workers within the food services industry," DeNigris said. "While not all 2020 graduates planned to pursue careers in these industries, there's a chance that they'll answer the call to fill these roles. Given the state of the labor market, candidates must be open to new opportunities so that they gain in-field experiences."

Salary Discrepancy

At the time the survey was conducted, members of the Class of 2020 said they were expecting to earn $49,000, on average, for their first job, while employers reported being willing to pay $56,000 on average, a $10,000 jump from what they were paying five years ago.

But that was pre-pandemic. COVID-19 has decimated the labor market, putting downward pressure on salaries and benefits, Owens said. "The shift to high unemployment will create competition for the open roles that are available, but I hope that industry leaders will recognize that this isn't a time to undercut talent when it comes to pay."

Experts agreed that employers should take a total-rewards approach when recruiting entry-level candidates, because while salary is important, these new graduates will also put a premium on stability.

"I anticipate job security to emerge as an elevated priority for candidates—and with a heightened sense of insecurity, it is imperative that employers effectively communicate the financial stability of their organizations, as well as how the organization is pivoting to navigate these unprecedented times," DeNigris said.

Interest in HR

The Class of 2020 study showed that college seniors are increasingly becoming more interested in human resource roles, with 19 percent saying that they are interested in working in HR, up from 18 percent last year and 16 percent in 2018.

The current climate may push more graduating seniors into gig work as well. "Among the class of 2020 graduates, 22 percent are very likely to get a job in the gig economy to supplement their main income—and this number will likely rise," DeNigris said. "Even before COVID-19, they were looking for work arrangements that gave them access to a wide range of experiences. In response to the effects of COVID-19 and fears of potential resurgence, companies may increase the amount of hires they make on a part-time, temporary or project basis versus committing long term to full-time employees. Recent graduates may latch on to these opportunities to get their foot in the door and get some experience under their belt."

And that's a smart move, Owens said. "Being open to opportunities to help build a transferable skill set for when you figure out exactly what kind of career path you want to be on will help land the ideal job later on."

Changes to Recruiting

Many expect that the pandemic will alter HR and recruitment processes in the long term. "A crisis tends to accelerate the adoption of new tech, and we've quickly learned that virtual recruitment methods and hiring practices are here to stay," DeNigris said. "Once viewed as a competitive edge, virtual recruiting capabilities are now a must-have for employers. Employers should expect to see a proliferation in technologies like texting, video and chatbots as part of the hiring process. These tools enable faster, always-on communication from anywhere."

Employers have been offering more virtual information sessions and career fairs, Alvarez said. "Where we had 1 or 2 per month, we now have that amount per week. Some organizations are getting creative, producing professional development webinars or holding virtual happy hours to speak with interested candidates."

It might be reasonable to assume that candidate experience will take a hit in an employer's market, but that's not necessarily true. "The expectation for concierge candidate experience will vary by industry," Alvarez said. "Some students may be more accommodating when it comes to hearing back quickly from employers they've applied to, but many candidates are expecting increased communication during this time as opposed to less."

DeNigris said that a speedy hiring process should remain a leading priority for employers, "because if they're not quick to secure top talent, they'll miss out. Stakes are high, and it can't be assumed that because the economy has shifted, candidates will exercise a new level of patience—in fact, it should be noted that uncertain times drive impulsive behavior." 

Employers' priorities will evolve but "those who lean in and continue to differentiate their brand with a candidate-centric and easy experience that values the candidate's time and shows empathy to candidates will win," she said.

Article by  Roy Maurer

June 12, 2020