Job Outlook Brightens for New College Graduates
Good news for the class of 2016: companies are planning to step up their hiring of new grads.
Employers expect to hire 5.2% more freshly minted grads this year than in 2015, according to the National Association of Colleges and Employers, which tracks college hiring. Last fall, companies on average predicted they would increase college hiring by 11%, but they pared those plans after 2016 got off to a rocky start.
Now, 67% of employers say they are planning to hire recent college graduates this year, up two percentage points from last year and the highest proportion since 2007, according to a Harris Poll survey for job website CareerBuilder.
The same trends damping the outlook for U.S. economic and job growth this year are affecting corporate hiring plans. While the stock market has regained much of the ground it lost earlier in the year, economists recently trimmed their forecasts for employment gains and economic growth, citing market volatility and signs of a cautious consumer.
Companies including Starbucks Corp., Google parent Alphabet Inc. and Verizon Communications Inc. delivered higher year-over-year profits for the latest quarter, but they missed some analysts’ forecasts for growth, suggesting some businesses were hit harder than expected.
Cisco Systems Inc. plans to welcome a few dozen more college recruits this year, saidKelly Jones, U.S. director of university relations. As of April 19, the networking-equipment maker filled 957 entry-level spots, up from about 900 this time last year, Ms. Jones said. She expects Cisco to have hired between 1,000 and 1,200 new graduates by summer.
Last August, Cisco predicted it would add some 1,350 new graduates in 2016. The outlook dimmed because of restructuring efforts in the intervening months, Ms. Jones said.
Recent graduates make up a growing majority of hires at International Business Machines Corp., which brought on about 70,000 people last year.
This year’s intake of college hires will likely remain flat, said Carol Gordon, IBM’s vice president of talent. She added that last year, “early professional numbers represented a higher proportion than in previous years,” partly because of the company’s increased focus on “cognitive computing” work, such as its Watson system, and cloud technology, ripe areas for engineers beginning their careers, she said.
General Electric Co.’s campus hiring has remained constant at about 11,000 since last year. These days, GE is “looking more closely at hiring digital talent,” including computer-science majors, for a larger share of those spots, said Leslie Coyne, director of global university recruiting.
Entry-level pay is going up as employers seek an edge with sought-after grads. Some 37% of employers plan to offer recent college graduates higher starting salaries than they did last year, according to the CareerBuilder survey, which polled more than 2,000 hiring managers. And 27% of those recruiters said their companies will pay starting salaries of $50,000 or more.
At consulting company Accenture PLC, where 72% of roughly 373,000 employees are millennials, average starting salaries have increased in many regions of the world over the past five years, said Ellyn Shook, chief leadership and human resources officer. She said the company monitors the “pulse on what we need to pay to be in the game for top talent,” and adjusts accordingly.
While employers are hiring more new graduates for full-time jobs, NACE said, they plan to bring on fewer interns and students in cooperative education programs, which augment classroom studies with work experience. The organization projects that intern hiring will drop 4.8% this year, while co-op hiring is expected to fall 9.9%.
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