New data from the National Association of Colleges and Employers (NACE) reveals good news for collegiate job hunters: Companies plan to hire more interns and recent graduates in response to a burgeoning employment market.
NACE’s 2022 Internship & CO-OP Survey released this month found that employers are expecting to increase intern hiring by 22.6% this academic school year – the largest year-to-year increase in 10 years. Meanwhile, the nonprofit agency that links college career service professionals and employers reports that employers plan to hire 31.6% more new college graduates in 2022 than the previous year.
“The jump in intern hiring is all the more significant as it comes following a drop in 2020-21, when employers trimmed intern hiring by 0.5%,” says Shawn VanDerziel, NACE executive director, in a press release.
BIG JUMP IN INTERN HIRING
The 22.6% jump in planned intern/co-op hiring is the highest increase in 10 years, by a large margin. The highest previous increase came in 2017 when employers reported plans to hire 3.4% more interns than the previous year. The largest decrease came in 2016 when employers indicated they planned to hire 4.8% fewer interns than in 2015.
INTERN RECRUITING AND RETENTION
The NACE survey revealed some insightful data points for how employers recruit, choose, and retain interns and co-op students. (Cooperative education programs, or co-ops, provide multiple work periods for students that work around and in cooperation with their school schedules.)
For example, according to the NACE survey, employers typically begin their recruitment process for interns about eight months in advance and six months in advance for co-ops. Most also source these students through open applications. The lesson: Start your search early for the best opportunities and don’t sit on the applications. Employers also mostly base their hiring decision on preferred major and student’s leadership experience.
“The retention rates for both interns and co-ops after one year are closely aligned based on where they gained experience. For hires with internal experience as an intern or co-op in the company, the retention rates range from 73% to 75%, whereas those with either an external internship/co-op experience or no experience are at around 50% retention,” the report reads.
Other key findings from the survey include:
- 46.8% of employers plan to provide a hybrid internship experience while 25.8% will hold internships exclusively in-person. Just 2.2% of employers are planning internships that are fully virtual and 25.3% hadn’t yet decided the format of the internship by the time of the survey.
- There is still work to be done in gender and race equity for internships and co-ops. “Although there has been some progress when one compares the 2020-21 cohort to the 2019-20 cohort, many historically marginalized groups—notably female, Black, and Hispanic students—remain underrepresented relative to their distribution in the overall student population,” reads the report’s executive summary. In fact, about 43% of interns were female compared to 58.6% of the student population that is female.
- 51.8% of eligible interns are converted to full-time employment after graduation.
31.6% MORE NEW COLLEGE GRAD HIRES IN 2022
Intern hiring trends also align with projections for full-time hiring in NACE’s Job Outlook 2022 Spring Update survey. Employers in that report indicated they expect to increase their full-time hiring by 31.6% in 2022 versus 2021. That is a 5% jump from the 2022 Fall Outlook Survey and a 24% increase over spring 2021. It’s also the highest increase in 10 years.
“Almost 56% of respondents to NACE’s Job Outlook 2022 Spring Update survey indicate that they will increase their college hire numbers and an additional 41% will maintain them. Less than 4% will decrease their number of college hires,” reads NACE’s report on the survey.
Other highlights from the Job Outlook 2022 Spring Update survey include:
- 42% of entry-level positions will be in person, 40% will be hybrid, and 18% will be fully remote, according to employer respondents.
- Almost 90% of employers indicated they plan to hire both full-time employees and intern/co-op employees, while 10% report they are hiring either full-time or intern/co-op positions only.
POSITIVE HIRING TRENDS FOR BUSINESS MAJORS
The intern and graduate hiring surveys continue a series of positive reports NACE has released this year, particularly for business students.
In February, NACE’s Winter 2022 Salary Survey found that starting salaries for 2022 graduates with a business degree are projected to climb 3.1% over last year, to an average base of $60,695. That’s nearly double 2021’s projected increase of just 1.6%.
The salary survey also found that employers planned to hire candidates with business-related degrees more than any other major. Business majors represented six of 10 categories for the types of candidates employers are looking to hire in 2022.
Of the survey respondents, 66.1% planned to hire candidates with a finance degree in the upcoming year. Another 65.5% planned to hire candidates with accounting degrees and 61.3% candidates with a degree in business administration or management.
Survey data in the NACE report largely jells with the salary data reported in our latest ranking of undergrad business schools where average salaries rose between 2 to 9% at five of the top 10 paying schools from our survey. At the top schools, starting salaries ranged from $73,000 to $85,000. Starting salaries and internship pay are likewise soaring in industries popular with business majors such as investment banking and consulting.
It’s also important to note that the NACE survey doesn’t include bonuses and other compensation. Bonuses at P&Q’s topped ranked schools ranged from $9,000 to $12,000, raising total compensation up to high $80s to $90s for graduates from the top schools.
The 2022 Internship & Co-op Report surveyed NACE member employers between November 10, 2021, and January 12, 2022. Some 183 employers responded, or about 22.4% of NACE’s eligible membership. Another 26 nonmember companies also participated. Read more on the results of the survey here.
For the Job Outlook 2022 Spring Update, NACE surveyed employers between February 2 and March 11, 2022. Of the 196 total respondents, 160 were NACE employer members, representing 19.8% of eligible member respondents. Read more here.