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Friday, 24 October 2008

For '09 Grads, Job Prospects Take a Dive

by Cari Tuna

College seniors may have more trouble landing a job next spring than recent graduates, as employers trim their hiring outlooks in response to the slowing economy and financial-sector turmoil.

Employers plan to hire just 1.3% more graduates in 2009 than they hired this year, according to a survey by the National Association of Colleges and Employers.

That's the weakest outlook in six years and reflects a sharp recent downturn. Just two months ago, a survey by the same group projected a 6.1% increase in hiring. The August survey included 219 employers, 146 of whom responded to the new survey, conducted earlier this month. The big drop in hiring projections is "extremely unusual," says Edwin Koc, the association's director of strategic research.

The results continue a pattern of diminishing job prospects for college graduates. A year ago, employers told the association they would increase hiring for the class of 2008 by 16%. By this spring, though, the projected increase had fallen to 8%. The association doesn't report how actual hiring compares with its projections.

Some of the decline reflects the weakened financial sector, with employers like Lehman Brothers Holdings Inc. in bankruptcy protection and others, including Merrill Lynch & Co., being acquired. But other employers are tightening their belts as well. Insurer Progressive Corp. last fall expected to hire 4,000 college graduates in 2008. In fact, the company has hired fewer than 1,000 this year. Mari Pumarejo, who works with employment and recruiting for Progressive, says the company expects to hire fewer new grads in 2009, although she declined to offer a precise projection. "Things are changing very rapidly, and we are reassessing everything right now," she says.

General Electric Co. hired about 900 undergrads and M.B.A. graduates for full-time positions in the U.S. this year, but expects that number to shrink by 10% next spring, while hiring grows overseas. "It's going to be tougher for the class of '09 than it has been for the previous couple of years," says Steve Canale, manager of recruiting and staffing services.

Retailers Target Corp. and Walgreen Co. also have trimmed hiring projections for 2009. Maureen Reim, director of recruitment for Walgreen, says the company plans to open fewer stores next year and sees more recent hires staying in their jobs, in part because of the weaker job market.

The new survey comes amid the fall corporate recruiting season on college campuses and reflects the weakening U.S. labor market. Employers shed 159,000 non-farm jobs in September, and the unemployment rate was near a five-year high at 6.1%. According to the Department of Labor, the number of unemployed people has risen by 2.2 million in the past 12 months.

Meanwhile, more students are graduating from college, according to the National Center for Education Statistics. Colleges and universities will grant an estimated 1,585,000 bachelor's degrees this school year, up from 1,544,000 in the 2007-2008 year and 1,506,000 the prior year.

The weaker job market is most evident at colleges in the Northeast and schools that typically feed the finance sector. Trudy Steinfeld, director of career services at New York University, says about 15% fewer companies are recruiting on campus this year; the decline is primarily among financial-services firms, she says.

"There are some students who are quite nervous, especially those who thought they were headed to a Wall Street career," she says.

Nick Burch was one. The senior finance major at NYU's Stern School of Business says he had planned to interview with top investment banks. But he's since expanded his search to include midsize banks, like Piper Jaffray Cos. and Lincoln International, as well as finance positions at companies like Macy's Inc.

Mr. Burch is also considering Teach for America, which places recent graduates in teaching positions at underperforming schools. The downturn, he says, makes young people "feel freer to pursue your real passions."

Salaries are likely to suffer, too. In a separate survey, NACE members reported a 7.6% increase in the average starting salary paid to 2008 graduates to $49,224. But career counselors say they expect starting salaries to hold level or decline next year. Mr. Burch says he expects "downward pressure" on his starting salary, and he doubts that job offers in finance will include signing bonuses.

College career counselors are intensifying efforts to help students. Ms. Steinfeld's group is inviting recruiters from smaller employers around New York, soliciting job postings from NYU alumni and scouring newspapers to find companies that are expanding. This week, the career center will hold an information session on "alternatives to Wall Street."

At the University of Wisconsin-Madison, the number of companies attending a September career fair fell to 225, from 232 last year. Leslie Kohlberg, director of career services for the College of Letters and Science, is encouraging students to seek individual counseling, visit employers and develop a back-up plan -- or two.

"Things have been so good that students were able to rely on even some of the least-effective job search strategies," like sending résumés via email and searching online career postings, she says. "They can't really afford to do that now."

The employment outlook is not all bad, career counselors say. Despite cutbacks in finance, retail, manufacturing and construction, demand for recent graduates remains high in fields such as accounting, public service, health care, education and technology.

The federal government, in particular, is boosting campus recruiting ahead of anticipated worker shortages. By 2016, nearly 61% of current full-time government employees will be eligible for retirement, according to U.S. Office of Personnel Management.

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