The Rocky Road Ahead For Recent College Grads
Hello and welcome back to the Recruitonomics Newsletter! This week, we’re diving into the challenges facing recent college graduates within the United States. This group of workers is seeing far worse labor market outcomes than older college educated workers.?
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This Week on Recruitonomics:?
The Divide Between Graduates’ Aspirations and Industry Demand
In the United States, the job market has been consistently robust. However, recent college graduates are now facing greater challenges in securing employment. While the college-educated population has recently plateaued, there has been a consistent upward trend in completed college degrees over the past decades. In 2012, 30.9% of the population held a college degree or higher, and 87.6% had received a high school diploma. Fast forward to 2022, and these figures have increased to 37.7% and 91.2%, respectively. This is good news, as higher levels of educational attainment are closely linked to higher employment rates and have been, historically, a dependable pathway to better job prospects and higher earning premiums. However, since the onset of the pandemic, job prospects for recent graduates have significantly deteriorated.??
Read the full article here .
What does this mean for recruiters??
How can this be, when so many recruiters are experiencing difficult conditions? Well, the majority of graduates are predominantly interested in the dwindling professional occupations. Many of the worker shortages, and thus high recruiting competition, are in the industries that do not align with the preferences of recent graduates, such as restaurants, hotels, daycares, and nursing homes. Recruiters may soon see the emergence of “gray-collar” jobs – which combine physical labor akin to blue-collar positions with technical skill requirements that often match or exceed those of white-collar jobs.?
The U.K. Slipped Into Recession: What Does That Mean for the Labor Market??
The United Kingdom has technically vastly outperformed expectations, but that doesn’t necessarily mean it has performed well. In fact, the U.K. actually slipped into a recession in the second half of 2023, as it experienced two consecutive quarters of negative growth. While this is certainly not good, the Bank of England expected a severe economic downturn paired with rapidly rising unemployment. This recession that occurred in the latter half of 2023 does not include rampant unemployment. In fact, the labor market has held up… so far. Employment growth has been fairly strong but shows signs of slowing. Perhaps most worrisome is the redundancy rate, which shows that more and more U.K. companies are implementing hiring freezes or actively laying people off, especially in white-collar industries. While the Bank of England is still concerned with too-high inflation, it may need to take a step back and reevaluate the situation before it keeps the economy too tight for too long, pushing it further into recession.?
Read the full article here .
What does this mean for recruiters?
While the labor market has held up so far, the technical recession is less consequential than the severe slowdown in nominal GDP (and compensation of employees), which is pointing towards a broad-based decline in incomes across the economy. This will eventually feed back into declines in spending and cause an economy-wide downturn. That potential decrease in demand for goods and services would directly decrease demand for workers, hurting the labor market further.
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Recruiting Tips:?
Employer brand has often been seen as a nice-to-have rather than a need-to-have, but as a new generation enters the workforce, it matters more and more. Did you know that 75% of job seekers are more likely to apply for jobs with companies that actively manage their employer brand? On the other hand, 86% of American women and 67% of American men wouldn’t join a company with a bad reputation.? If you’re not taking the proper steps to create a positive brand, you’re missing out on a significant portion of the job market. Read our latest blog, “Why Your Employer Brand Matters More Than You Think ” to learn how you can leverage recruitment strategies that showcase your brand’s reputation.??
Recently on Recruitonomics:
Pinpointing when the U.S. enters a recession is dicey enough but knowing when a state is in a recession seems nearly impossible. For the United States on a whole, the National Bureau of Economic Research’s business cycle committee decides when the U.S. enters a recession but these recession calls are famously delayed. Researchers have begun using inventive methods to try to get a quicker answer to the important question of whether or not we are in a recession. Claudia Sahm, a former Fed economist, created the Sahm rule, which tracks the unemployment rate and flags a certain percentage point increase as a recession indicator. While the Sahm rule is powerful for national recessions, its insights do not extend to the state-level. State unemployment rates are far more volatile. So, if not the Sahm rule, then what? The Philadelphia Federal Reserve has devised an econometric model that helps determine whether or not a state is in a recession. They call it the State Coincident Index (SCI), which is based on the following monthly economic variables for each state: employment and unemployment, average hours worked in manufacturing, and wage and salary data (deflated by inflation). In the long run, the SCI is basically a measure of each state’s economic output – demonstrating when it is expanding or contracting.
Read the full article here .
The Canadian labor market expanded in January, adding 37,300 net new jobs. After several months of sluggish growth, these gains were welcome news but there were some concerning details within the report. First, the majority of growth in the headline number was from an increase in part-time employment (+49k). Full-time employment fell by nearly 12,000 jobs (-11.6k), a concerning signal about the demand for hiring. This could potentially suggest a shift towards less-stable employment conditions, undoing several years’ worth of gains of full-time work. Second, the overall demand for workers has fallen across all major industries in Canada. The job vacancy rate has fallen sharply in construction, manufacturing, and retail. In the end, this is a mixed report, full of shifting job market dynamics that will require strategic hiring decisions in 2024.?
Read the full article here .
What Recruitonomics is Reading:
In her latest from the New York Times, Jeanna Smialek asks whether the U.S. is in a productivity boom. Official productivity data show large gains for the first time in years, but is it just a blip? Most have written it off as such, especially given the volatility in the data in the years following the pandemic. However, companies and workers are utilizing new, exciting tools more than ever, with the advent of AI and the seemingly-permanent adoption of hybrid work. Just like in the mid-1990s, when computers became more affordable and were integrated into business habits, we could be seeing a productivity revolution. If it’s a true productivity boom, it would be huge for workers, who would see wage gains as companies' potential production surges. For more information, read the full article from the New York Times: Are We in a Productivity Boom? For Clues, Look to 1994.
?More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.