Scant Pay Growth for Business Grads
College seniors watching the economic downturn might be feeling anxious about their hiring prospects as they search job boards in coming weeks. And business majors are feeling it more acutely. A report released Apr. 16 by the National Association of Colleges & Employers (NACE) found that for business professions starting salaries have remained almost flat, and cutbacks in the financial sector are dampening optimism for the months ahead.
Overall, however, the news is a little bit better, helped by a boost in salaries offered to liberal arts and computer science majors, NACE said. For all 2007-2008 grads, starting salary offers are on average 5.3% higher than last year.
Despite the doom-and-gloom in the financial pages, the NACE report found that college seniors remain optimistic and appear to be selective about accepting job offers that have come their way. In a survey of students who had received job offers, 75% had not yet accepted the position, a figure that surprised Edwin Koc, NACE's director of strategic and foundation research. He said that strong recruiting in the fall set the tone for the year. But he cautioned that the spring may be a different story. "I would have preferred more students accept the job offers they got," he said.
Starting Salaries Barely Budge
Fueling much of the reported salary increases are offers to computer and information science graduates, who are seeing average salary increases of 13%, according to the NACE report. Seniors with majors in software design and development are the most sought-after of all college graduates, with the average starting offer coming in at $65,379. Liberal arts students, as a group, saw their average salary offers rise 12.9% to $35,378, though data in this area for individual majors "still remains limited," according to the report.
For business majors, who had enjoyed some robust starting salary increases in recent years, the data are sobering. Business students' salaries barely budged this year, a combination of a slowdown in the economy and major financial firms cutting back on their hiring classes (BusinessWeek.com, 3/20/08). For example, accounting graduates saw no change in their average salary offer of $47,429, while business administration/management starting offers inched up just 0.3% from last year, to $44,195. In 2007, by comparison, accounting grads' salaries had increased 2.7% from the previous year, and business administration/management majors had posted 7.5% starting salary increases. "Where the slowdown really hit is with the business majors," NACE's Koc said. "There is really no increase in their salaries. They're flat, dead flat, which is very unusual."
Andrea Koncz, a NACE spokesperson, also warned that the data capture early hires of the most promising students from the current senior class. In general, those students obtain higher offers than the rest of the class.
From this point on, things might be more challenging. Elise Gould, a labor economist at the Washington (D.C.)-based Economic Policy Institute, predicts that college seniors who haven't yet secured jobs will see a trickle-down effect from the economic slowdown as they conduct their searches in late spring and early summer. For example, students may not have as much leverage in negotiating their salaries and it may be harder for them to secure perks such as health benefits. "Employers are not making as many offers, so they can pick and choose who they want for their potential workforce," she said. "Those new to the labor market won't have as much bargaining power as in previous years to bid up their average wage and benefits. They'll just be happy to get a job."
Indeed, those undergraduate business students who have managed to secure jobs consider themselves fortunate. Micah Potts, 23, a senior at the University of Oregon's Charles H. Lundquist College of Business landed a job as a financial developer at Precision Castparts (PCP) back in the fall, but he reckons that about 40% of his fellow business majors are still looking for positions. Not as many companies have come to campus to recruit this fall as in the past and some are cutting back on the number of offers, he said. "I know of lot of smart people doing finance who don't have jobs, so as far as it being rough out there, it totally is," Potts said.
Tougher Time to Graduate
Students who don't have jobs lined up are starting to feel anxious about their prospects, especially as they follow the media reports about the economy slipping into recession, said James Chang, director of career services at the Lundquist College of Business. "I think the one change is the number who watch the news, and they do bring the concern that, 'Gosh, I am graduating at a tougher time with fewer opportunities,'" Chang said. "It's more an anticipatory buzz of students worrying how this will affect them. It's not that we're necessarily seeing a big shift or change in the employment landscape."
At Bentley College in Waltham, Mass., students who have secured jobs by graduation will likely see salary levels on par with the median salary of last year's graduating class, which was $49,500, said Les Morrison, executive director of corporate relations. Postings on the school's job board were down about 15% in February from a year earlier but have picked up a bit in the past two months. The school is "somewhat more optimistic that we are going to at least come very close to what last year's numbers were in terms of the number of opportunities we are presenting," Morrison said.
Students in the midst of their job search now said they are being proactive in reaching out to employers in unconventional ways. Jessica Larsen, 22, a senior who is a business management major at Bentley, said she is looking for a marketing job at a nonprofit or financial firm but is extending her search beyond the school's job board. She is doing extensive networking, information interviews, and reaching out to alumni in her field, steps she feels will give her a leg up in the job market. She has applied for about nine jobs so far and is waiting to hear back. "I don't feel nervous at all. I understand it's different than it has been in the past, but I don't think it's a negative," Larsen said. "It's just made me more creative about how I go about finding a job. I'm definitely using it to my advantage."
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