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Congratulations on getting your degree. Now welcome to a tricky job market

In Business
May 06, 2024

College seniors will don graduation gowns this month before jumping into a job market that isn’t quite as hungry for their diplomas as it is for skills learned outside of four-year schools.

Employers added 175,000 jobs in April, the Bureau of Labor Statistics reported Friday, below analysts’ expectations and a sign that hiring is slowing down across the economy. Some of the strongest gains were in health care, retail and the transportation and warehousing sector — industries where part-time and nondegree roles are plentiful.

“Not every sector is hiring that a new college grad would want to target based on their education level,” Nela Richardson, chief economist at the private payroll processor ADP, told reporters on Wednesday.

Her remarks came on the heels of ADP’s own report this week that found that the biggest private-sector job growth was in leisure and hospitality, construction and several other fields that don’t often require college credentials.

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The heavily white-collar information sector, on the other hand, which includes many roles in media and technology, posted job losses and the slowest pay gains since summer 2021, ADP found.

Meanwhile, Friday’s BLS data showed that the number of people employed part-time because their hours had been reduced or they were unable to find full-time jobs ticked up slightly to 4.5 million in April, higher than the 3.9 million level a year ago.

“I don’t think that’s the dream of many college students — to graduate and go part-time immediately,” Richardson said.

Compared with today, the past few graduating classes found “the opportunities were very plentiful,” said Guy Berger, director of economic research at the Burning Glass Institute, a labor market research group. “Employers were falling over themselves to hire them.” Since then, he said, “It’s gotten more challenging for sure.”

federal survey released this week revealed that total job openings had slowed to a three-year low in March, while total job separations — including quits, layoffs and discharges — decreased by nearly 340,000.

More than 40% of college seniors said they planned to pursue freelance or gig work after walking across the stage, a recent survey by the job marketplace Handshake found. Almost a third expected to do so on top of a full-time role.

While that isn’t exactly a new trend among fresh grads, who often cobble together multiple income streams in their first year or two out of school, it could signal that they’re bracing for a tough long-term job search. It’s something of a silver lining that part-time hiring is still going strong.

Experts said there may be others, too. As layoffs in tech and elsewhere continue, skill vacuums in sectors like health care might create new opportunities to excel quickly, Berger said.

After the 2008-09 financial crisis, “You started seeing a lot of the MBAs [and] Ph.D.s previously going into finance start drifting toward tech,” he said. “The key question is whether we start seeing the reverse, where that talent that was really flowing to tech starts to show up in other sectors.”

The class of 2024 will need to be more nimble and should consider “retooling their skills and orientation toward sectors that are hiring,” Berger added.

That might include strengthening qualities beyond subject-area expertise: The top skills employers of all sizes are prioritizing among new hires include all-purpose basics, like “strong work ethic,” the ability to work on a team and strong interpersonal skills, according to a recent ADP survey.

Mark Hamrick, senior economic analyst at Bankrate, said “the keys for those who are graduating college — as well as members of the workforce aspiring to find new employment — are possessing the right skills, being in the right location and then, obviously, finding their way toward an enterprise organization where they can be a good fit.”

In other words, demand for white-collar workers may be softening, but the fundamentals of job searching still apply. And in any case, the hiring climate for new grads could be a whole lot worse — just ask the nearest millennial.

“The measures speak to a labor market that’s still relatively robust,” Hamrick said.

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