The Class of 2023 Faces a Jittery Job Market: ‘The World Seems to Have Flipped on Its Head.’

Companies from Amazon to Wayfair are tapping the brakes on their hiring of college grads this year, forcing seniors to cast a wider net as they search for that crucial first job

By Lindsay Ellis and Kailyn Rhone of The WSJ. Excerpts:

"Many employers are taking a go-slow approach to employing graduating seniors this year, college career offices say. The cautiousness marks a sharp reversal from the past two years, when companies often made offers barely weeks after school began and staged bidding wars over interns and graduating seniors. 

Some of the companies that have laid off thousands of workers in recent months—including Alphabet Inc., Meta Platforms Inc. and McKinsey & Co.—are the same ones that went on hiring sprees when the Classes of 2021 and 2022 were graduating. Many of the companies announcing layoffs have been among the most-coveted and the best-paying large employers"

"Rachel Kaschner, associate director of Ohio State University’s engineering career-services office, says one company offered jobs to seniors but asked some of them to delay their start dates. It also floated an unusual perk: The company, which Ms. Kaschner declined to name, will pay tuition for those willing to pursue a graduate degree before joining the payroll a year later.

Nearly all—97%—of the 1,000 college seniors surveyed by recruiting-software firm iCIMS in March said they have considered alternative options in the uncertain job market, weighing graduate school, gig work or taking a job outside their major."

"While the U.S. isn’t in a recession, many companies have said they are bracing for one. If a downturn arrives, it could have lasting effects on the careers and earnings of new grads. Workers entering the labor force when unemployment is high often can’t find the jobs they want, so they make tough choices to make ends meet, sometimes ending up at low-paying or smaller employers.

In February, the most recent month available, the unemployment rate for college graduates aged 20 to 24 was 4.6%. That’s double the 2.3% from December 2021"

"The people graduating this year could be hitting the job market at its low point, says Charlie Cain, managing director and executive vice president of Beacon Hill Associates, one of the biggest staffing firms in the U.S."

"many lower wage or service-industry jobs are still going unfilled—yet college grads face increased competition for knowledge-worker roles."

"At Villanova University in Pennsylvania, the number of entry-level, full-time jobs that companies posted via the school’s career center between Jan. 1 and March 14 declined by 7%, compared with the same period last year."

"Bringing in new graduates is important for companies even in downturns, as it establishes talent pipelines for the years ahead, when business stabilizes"

"New graduates with degrees that were hot until recently, including software engineering and computer science, may need to temper their expectations, says Kelly Jones, chief people officer at Cisco Systems Inc. Unlike prior years, they may not have their pick of several jobs at once."

Related posts:

Historically, college students who graduate into a recession have settled for lower-paying jobs at less prestigious companies (2020)

Has The Recession Been Hard On College Graduates? (2010)

How Recessions Affect Young People (2010)

The Class of 2020 Looks for Work (2020)