Bleak Economy Not So Bad for New College Grads

March 13, 2008— -- Grim economic news inspired Northwestern University senior Shawn Basak to work practically full time for about 10 weeks in preparation for job interviews and applications. "The entire process was intimidating," Basak said. "It was nerve-wracking, given the state of the economy, which compounded the fear and pressure."

His worries were misplaced, thanks in part to the masses of retiring baby-boomers making way for the likes of Basak, who eventually landed three attractive job offers.

Basak shared the fears of many graduating students spooked by a weak housing market, rising unemployment numbers and a possible recession. Now, however, many of the same parents and grandparents who may have helped them survive college are creating a different kind of opportunity — in the workplace.

"[Companies] are seeing a lot more retirements of the more seasoned employees and need to replace them with new talent," Andrea Knock of the National Association of Colleges and Employers said.

The aerospace industry has been hoping to lure graduates to replace retirees. Aerospace Industry Association Vice President Jeremiah Gertler noted industry salaries have become more competitive in recent years as the need for "growing" new employees has become more important. The AIA estimates more than 20 percent of its workforce, many of whom were recruited during the "space race" era, fall in the range of the retirement age; 60 percent of their workers are older than 45.

"Today, if you're coming out of school with a computer science engineering degree, there are a lot of places for you," Gertler explained, stressing the importance of early recruiting and competitive benefits. "Computer engineers can go to Google or to the aerospace industry; there's lots of competition for people with tech degrees. Aerospace is not the only employer in the industry."

NACE, a non-profit organization that tracks college graduate employment, said students pursuing careers in engineering and financial services can look forward to slight increases in their starting salaries. In their most recent survey, engineering grads saw a nearly 6 percent increase in their starting salaries.

Many employers are still pushing forward with their on-campus recruiting plans. John Challenger, CEO of a Chicago employment placement firm, said the decline of job offers is "mostly confined" to industries hard-hit by a tumbling housing market. His firm said about half of the companies they've polled plan to hire the same number of employees as last year.

"The last couple of years have been very strong," Challenger said. "While recruiters are not going to add or continue to expand those efforts, most are keeping it where it was at."

Even with more discouraging economic news, Challenger said students can rest assured that most companies will stay true to their initial job offers and openings — there won't be a repeat of 2001, when some seniors found themselves graduating with rescinded job offers in the midst of economic trouble.

"Most companies have not changed their plans in what may appear to be a slowdown in the economy," Challenger said. "Employers can ill-afford to not bring in this year's crop of new grads."

Basak, the Northwestern University senior, said he "cast the net wide" and applied to as many jobs as he could this year. He spent 40 hours a week for about two and a half months to prepare for the process.

But Basak was "pleasantly surprised" when he landed three job offers. He has recently accepted a consulting position in downtown Chicago.

At the University of California-Los Angeles, Career Center Director Kathy Sims said she sees "little correlation" between reports of a sluggish economy and on-campus recruiting activity.

"We are seeing a very robust recruiting season for our college grads," Sims said. "This is the third year running that it's been increasing – at minimum, there's been a 10 percent increase in activity."

She said there have been more job postings and more on-campus recruitment interest. Her office has added days to scheduled job fairs to accommodate the demand. She noted technology, investment banking and consulting are fields that have been exceptionally strong in career offerings this year.

While the job market for college graduates is encouraging, Challenger warned it's still not a time for slacking.

"If the economy continues to deteriorate, maybe the companies won't keep going," he said. "They might curtail efforts … so, I would advise them to try to nail down that offer soon."