The good news: New graduate hiring is expected to increase again in 2016.
The bad news: Employers have cut their hiring projections in half over the past six months.
That’s the big takeaway from the most recent Job Outlook 2016 report published by the National Association of Colleges and Employers (NACE). According to data collected in February and March, 5.2% of employers surveyed intended to add more graduates over the previous year. The caveat, of course, is this percentage is a steep drop from the 11% who anticipated boosting graduate hiring when surveyed last fall.
HIRING UP…BUT STARTING TO COOL
Look a little deeper and the numbers can be a somewhat unnerving. This year represents just the second time in the past six years when spring hiring plans were lower than fall forecasts. What’s more, this 5.2% bump pales compared to the robust spring hiring for the classes of 2015 (+9.6%) and 2014 (+8.3%). And it is a far cry from the Class of 2011, when employers–rebounding from the Great Recession–anticipated a 19.3% jump in hiring.
In fact, 37.1% of employers intended to scale back on graduate hires this spring, nearly triple the number that expected to do so last fall (13.2%). Even more disturbing: Among employers surveyed by NACE, the average number of job postings plummeted from 148 in 2015 to 67 in 2016. While postings are down, the average number of applicants per posting remained steady (23.4 in 2015 compared to 22.7 in 2016).
In other words, the economy is continuing to churn out entry level jobs. However, growth is grinding down despite steady demand. As a result, the job market will be more fiercely competitive in 2016 than in previous years.
BUSINESS MAJORS REMAIN POPULAR HIRES
The updated employer survey from NACE features detailed data from 144 employers, including ARAMARK, Caterpillar, ConocoPhillips, Johnson & Johnson, Intuit, Principal Financial, and the UnitedHealth Group. These firms came from over 20 different industries, with just two (Finance, Insurance and Real Estate and Miscellaneous Manufacturing) accounting for 10% or more of the sample. The vast majority–83.1%–were comprised of 1,000 or more employees.
Traditionally, business majors have been more insulated from economic cycles due to employer demand for their skills sets. And 2016 won’t be much different. According to NACE’s data, 63.7% of respondents planned to hire business majors from the 2016 class– second only to engineering (66.9%). Again, this positive is accompanied by a downside. Namely, 68.2% of employers surveyed in 2015 predicted a bump in hiring business majors (engineering demand also dipped in 2016 at a 5.2% clip).
At the same time, the bachelor’s degree retained its popularity among employers. Some 81.2% of respondents were prepared to hire 2016 grads with a BA, nearly an identical percentage as 2015 (81.9%). Indeed, every employer with plans to hire included new bachelor’s degree holders in their estimates. Even better news: Employers have a track record for following through on these plans, with 83.4% of employers actually hiring BAs from the 2015 class.
EMPLOYERS EMPHASIZING PROFESSIONALISM AND WORK ETHIC MORE
That said, employers look to be curtailing their hiring going forward. Just 29.6% of respondents were inclined to beef up their hiring this fall, a 13.3% decline from 2015. Another 7.2% expected to hire more, while 48% planned to add the same number to their employment rolls.
When they do hire, employers will generally be looking for the same qualities from new hires. In terms of career readiness competencies, NACE employers placed the greatest emphasis on critical thinking and problem solving (i.e. using analytical reasoning and inventiveness to make decisions and resolve issues) and professional and work ethic (i.e. taking responsibility, understanding non-verbal communication, acting with integrity, and conveying a professional image).
Surprisingly, tech savvy and leadership ranked among the lowest attributes sought by employers. Even more, employers seemingly sent a subtle message to the class of 2016 in this survey. Professionalism and work ethic was the only essential need rating to increase among the seven competencies–perhaps reflecting some employer unease with what they experienced from 2015 hires.
To go along with hiring, NACE also released its annual salary survey in March. Among business majors, Management Information Systems majors earned the most coming out with a mean salary of $56,846. They were followed by graduates who studies Logistics and Supply Chains ($55,246), Actuarial Science ($54,833), Economics ($53,673), and Finance ($53,499). Overall, graduates enjoyed pay increases across the board from the previous year ranging from $100 (Marketing) to over $2000 (Logistics and International Business). However, there were two areas where graduates suffered lower salaries from the year before: sales ($50,200 to $50,122) and hospitality management ($47,090 to $46,469).
To see NACE’s starting salaries for various business-related majors, go to the next page.