As recent college graduates venture into the job market, some unexpected dynamics are at play. While the tech sector has traditionally been a strong source of employment, it seems the tides are shifting.
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This change is exemplified by Lucas Voron, a computer science and engineering graduate from Santa Clara University. Despite his initial ambitions of joining tech giants like Apple, Google, Amazon, and Meta, circumstances led him to opt for a stable software developer position at Hewlett Packard Enterprise instead.
Does this reflect a broader trend in the job market for college graduates?
Key Takeaways:
- As tech giants slow down their hiring, other sectors like health care, education, retail, and construction are emerging as strong employment prospects for college grads.
- The effects of COVID-19 continue to linger as this year’s graduates face challenges in gaining experience due to the reduction or cancellation of internships during the pandemic.
- Despite concerns about an economic downturn and tech sector layoffs, the job market remains resilient for college graduates, indicating a shifting yet promising employment landscape in 2023.
The Shifting Job Market
“The growth of the labor market is still strong but it’s slowing down,” observes Luke Pardue, an economist at Gusto, a payroll processor for small and midsize businesses. While tech and finance are seeing slower job growth, the hiring focus has shifted towards health care, education, retail, and construction, indicating an evolving labor market.
This evolution comes with a potential dip in the economy. Speculations of an impending recession due to the Federal Reserve’s aggressive interest rate hikes and regional bank crises pose potential threats to the job market.
Resilient Employment Opportunities for Grads
Despite these changes and potential challenges, employment prospects for recent college grads remain robust. Gusto forecasts a 5.4% employment increase this month for 20- to 24-year-olds, including college grads. This represents a slight decrease from last year’s 7.2% rise, but still signals a healthy job market.
The National Association of Colleges and Employers also reveals employers are planning to hire 3.9% more freshly-minted graduates this year than last year. While below the previous estimates, this figure confirms the resilience of the job market amidst shifting trends.
COVID Impact: The Internship Experience
However, the impact of the COVID-19 pandemic continues to present some challenges. Jeff Beavers, executive director of the Career Services Network at Michigan State University, notes that some of this year’s grads may be at a disadvantage as the pandemic has restricted their ability to participate in internships or extracurricular activities.
- Pandemic-related disruptions led to many internships being reduced or canceled, particularly in tech and supply chain and logistics industries.
- The lack of internship opportunities meant that many students could not gain the experience employers are seeking.
- In contrast, in 2022 COVID-era graduates were generally able to gain this experience before the pandemic hit.
- This has left some of 2023’s graduates at a disadvantage in the job market compared to their predecessors.
Emerging Hiring Trends in Various Industries
Despite tech struggles, other industries are actively seeking recent grads. Luke Pardue, an economist at Gusto, highlighted this trend, saying “The opportunities have shifted to other industries.”
- For example, hiring of early 20s workers has seen increases in food and beverage, retail, education, health care and social assistance, and accounting.
In San Jose, a leading tech hub, technology companies are reducing their workforce, but accounting firms continue to hire. Patti Gower, the director of recruitment at Frank, Rimerman & Co., expresses the difficulty of finding new recruits, stating, “Fewer students are going into the accounting profession. That’s what’s causing trouble for us.” This highlights the abundance of employment choices available to new graduates. Meanwhile, Jeff Beavers, executive director of the Career Services Network at Michigan State University, observes, “construction, health care, education and the packaging industry all have accelerated recruitment.”
A New Outlook for College Grads
While there are concerns about the tech sector’s layoffs and potential economic downturn, the job market for college grads remains resilient. The hiring focus has broadened, with sectors like health care, education, retail, and construction now taking the lead. Amidst these changes, recent grads, such as Lucas Voron, are adapting and finding rewarding opportunities, even outside the traditional tech powerhouses. The employment forecast indicates a shifting, but still promising landscape for college graduates in 2023.
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