New grads are entering the labor market: Are you ready for them?
Companies can do much more to nurture a pipeline of future job candidates, which will help prevent talent shortages.
Employers worried about workforce shortages may want to take a look at the upcoming crop of college graduates, a study from iCIMS finds. There is good news for both employers and potential employees in the study, but the data also suggested that companies can do much more to nurture a pipeline of future job candidates, which will help prevent talent shortages and higher rates of job turnover.
The study by iCIMS, a talent recruitment software company, surveyed HR professionals and college seniors around the world, including responses from 500 HR or recruiting professionals and 500 college seniors in the US. The report comes as stories of labor shortages have become common. Despite the improving economy, issues such as pay and safety continue to constrict the labor supply to some extent. Even as the pandemic seems to be fading, some workers resist the idea of returning to the “normal” that existed pre-pandemic.
Related: How do recent graduates build a career while working from home?
The iCIMS report at least delivers some good news on graduating college seniors, who face a better labor market than college graduates saw in other recovering economies, for example in the recovery after the 2009 recession. “The National Association of Colleges and Employers reports that seniors face a ‘more positive than expected’ outlook compared to that of the last major recession; nearly 10% more employers plan to maintain or increase the number of college hires in 2021 than in 2009,” the report noted.
Data points: new grads don’t want to work remotely, expect attention to DEI issues
One interesting finding of the study is that the growing demand by employees for remote work opportunities does not carry over to the current crop of college graduates. The study said that Gen Z is the most digital generation yet, with college seniors welcoming tech innovations like video interviews and text updates on potential jobs. However, college seniors also are saying that remote work is not a priority.
The survey found that 64% of seniors said they wanted to work in an office several days a week; 88% said they want to frequently meet with coworkers to build relationships and networks. Only 2% of college seniors said they wanted to work remotely full-time.
In another area that has become a top HR issue, college seniors say a company’s culture in the area of diversity, equity, and inclusion (DEI) is a crucial consideration. “Among college surveyed seniors, 72% either strongly expect or require employers to be committed to DEI in hiring practices, with 58% looking to learn about it explicitly within interviews,” the study said. HR professionals and recruiters also are placing emphasis on DEI; 59% say they use job interviews to promote diversity. At the same time, nearly half of these professionals feel more should be done, with 46% saying they are very or extremely concerned that their existing DEI initiatives are not visible enough to applicants.
Salary expectations favor employers; but they are neglecting the talent pipeline
The study has some interesting findings on salary, including responses that suggest that college seniors underestimate their compensation potential. The survey found that U.S. college seniors say they anticipate earning an average of just under $52,000 annually. However, the average salary for entry-level professionals is now $66,600 annually.
“This year, U.S. HR professionals expect to pay 22% more for an entry-level salary than March 2020; but college seniors are only expecting 6% more,” the report said. “This means students are leaving nearly $15,000 on the table.”
In another area, the study faulted employers for not paying enough attention to the pipeline for talent. The study said companies are not being proactive in laying the groundwork for attracting new talent.
“Only around a quarter (28%) of HR professionals say they are proactively hiring, curating, and nurturing a talent pipeline. In contrast, a plurality (44%) recruit on demand, only as positions arise,” the report said.
The study ended with four suggestions for employers who will be recruiting college grads this summer:
- Be inclusive in your interviewing process and authentically showcase your diverse talent.
- Give your talent options on workplace preferences (if possible) – remote, virtual, hybrid.
- Use video to offer a differentiated experience.
- Leverage texting to engage during key hiring milestones.
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