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Disparity between expectations and reality a challenge for employers; More entry-level workers reporting they are underemployed
NEW YORK, May 7, 2014 /PRNewswire/ -- The vast majority of students about to graduate from college this year (80 percent) expect their first employers to provide them with a formal training program, but 52 percent of those who graduated from college within the past two years say they did not receive training in their first job, according to new research from Accenture (NYSE: ACN).
The research also found that nearly half (46 percent) of those who graduated in 2012 and 2013 consider themselves underemployed and working in jobs that do not require their college degrees, an increase from 41 percent of recent grads participating in last year's survey.
The Accenture 2014 College Graduate Employment Survey polled 1,010 students who will be graduating from college in 2014, and 1,005 students who graduated from college in 2012 and 2013, in order to compare the perceptions of students preparing to enter the job market with the experiences of recent grads already in the workforce.
The study found that two-thirds (66 percent) of those who graduated in 2012 and 2013 believe their education prepared them for their career, and half (51 percent) said their school was effective in helping them find post-graduation employment opportunities. At the same time, this year's young job seekers are considering career options earlier than in the past: three-quarters (75 percent) of those graduating this year took into account the availability of jobs in their field before deciding their major; compared to 68 percent of graduates from 2012 and 2013.
Upcoming graduates may also be overly optimistic that they will find a job in their chosen field. Eighty-four percent expect to be able to do so, compared to 67 percent of 2012 and 2013 graduates who are working in their chosen field.
"We are seeing universities helping students to think more clearly about making career decisions earlier in their education, and that is a positive for both grads and their employers," said Katherine Lavelle, managing director, Accenture Talent & Organization, Accenture Strategy. "But, although recent college graduates may feel ready to work, they may not be prepared for the precise roles being offered. That is where employers should assume responsibility for further talent development. This generation of graduates expects people to pay attention to them and give them the skills they need. The top students will look for talent development programs and see it as a differentiator."
Accenture makes three recommendations for how employers can improve how they hire and develop young workers coming out of college:
- Hire based on potential, not just immediate qualifications. HR filters can screen out great candidates because their resumes do not have the required keywords. Recent graduates will not have every skill you are looking for, so consider candidates that show a desire for continuous learning, transferable skills and problem-solving capabilities. If the role does not require a distinctive educational background, avoid hiring overly qualified applicants who may not stay long.
- Use talent development as a hiring differentiator. The ability to offer training and career advancement can be a differentiator when attracting and retaining top talent. If your training is distinctive, emphasize that in your recruiting strategy, social media presence and discussions with candidates.
- Consider alternative talent pools. Be creative when it comes to sourcing new employees, and use tools to search online communities for young people with strong digital brands that demonstrate the skills you're looking for. Consider non-local graduates, as the survey found many new grads are willing to relocate to launch their career.
"Graduates are leaving college expecting to receive corporate training, but despite the skills shortage, there is still no material movement by organizations to help close the gap," said David Smith, global managing director, Accenture Talent & Organization, Accenture Strategy. "The building of a strong and sustainable talent supply chain is dependent on better preparing and developing our entry-level employees and, without greater investment in talent development, companies will continue to find themselves with a workforce lacking in the right skills."
Job Market Remains Tough; Part-time Work On the Rise
The study reveals that only 11 percent of students graduating in 2014 had already secured a job at the time of this year's research; compared to 16 percent of last year's graduating class. Nearly half (46 percent) of the 2012 and 2013 graduates surveyed this year are currently employed full time, down from 68 percent of 2011/2012 graduates responding last year. And 27 percent of the 2012 and 2013 grads are working part time, significantly up from 16 percent of last year's respondents.
This year's survey also highlighted a gap between expectations and reality on the speed of landing a job and the willingness to relocate to do so.
- 69 percent of pending 2014 grads expect to find a job within six months of graduation, but only 42 percent of the 2012 and 2013 graduates said they did so.
- Three-quarters (74 percent) of pending 2014 grads said they would be willing to relocate to another state to find a job, but only 21 percent of 2012 and 2013 graduates surveyed said they ultimately did so.
Smith said: "Our research demonstrates that young people are willing to relocate for their career, meaning that companies should seek out talent in all locations to ensure they are hiring the best people. Companies should take advantage of new technologies, such as mining social networks for recruitment purposes, to find employees with the skill sets and interests needed, regardless of their location."
Graduates' Financial Outlook: Many Will Call on the "Bank of Mom and Dad"
The Accenture study highlights a disparity between the starting salary expectations of the class of 2014 and the actual starting salaries of 2012 and 2013 graduates. While only 18 percent of this year's graduates expect to earn $25,000 a year or less, more than twice as many (41 percent) employed 2012 and 2013 graduates have a salary within that range. Despite that, soon-to-be 2014 graduates are less willing to compromise on salary when considering a job than last year's graduates: 33 percent of this year's graduates compared to 43 percent of those about to graduate in 2013.
The survey reveals continued financial difficulties for graduates:
- 32 percent of the class of 2014 will graduate with no student loan debt, compared to 36 percent of 2012 and 2013 graduates.
- 41 percent of pending 2014 graduates will leave school with student loan debt of $30,000 or less, while 16 percent will have loan debt in the $30,000 to $50,000 range.
- A greater proportion of the class of 2014 will look to share student loan debt with their parents: 28 percent of pending 2014 graduates, compared to 25 percent of those about to graduate in 2013.
- 61 percent of pending 2014 graduates with student loans plan to pay off the debt without help from their parents.
- While 38 percent of pending 2014 grads plan to live at home after graduation, 42 percent of 2012 and 2013 college grads said they are currently living at home.
- More than half (52 percent) of 2012 and 2013 graduates rely on health insurance coverage through their parents' insurance, compared to only 37 percent of outgoing 2014 graduates who expect to do the same.
Grads See the Value of Investing in Their Education
- Of the 13 percent of 2012 and 2013 grads who have been unemployed since graduation, 41 percent believe their job prospects would have been enhanced had they chosen a different major, and 72 percent expect to go back to school within the next five years.
- 45 percent of all 2012 and 2013 grads with a two-year degree said they will need to obtain a four-year degree in order to secure the job they want.
- Internships remain a good opportunity for graduates to advance to a paying job; of the 69 percent of 2012 and 2013 graduates who participated in an internship while still in school, more than one-third (36 percent) said the internship led to a job.
Accenture conducted an online survey in the United States of 1,010 students graduating from college in 2014 and entering the job market, and 1,005 participants who already graduated college in 2012 or 2013. The survey was conducted between March 4 and March, 14, 2014. Learn more at www.accenture.com/CollegeGradSurvey.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 289,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.
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