Kevin Monahan, associate dean at Pittsburgh’s Carnegie Mellon University, had no trouble helping his students find jobs last year. Seniors took their pick of employment options, and companies made offers a year in advance or waded into bidding wars to secure the best candidates.
This year, however, many are graduating without offers at all. “We’ve been talking with our students about resetting expectations,” Monahan said.
Similar conversations have taken place on campuses across the US, as last year’s post-pandemic graduate hiring spree has turned into a drought. Fearful of recession, employers have curtailed on-campus recruitment, perplexing graduates who had hoped to enjoy a hot jobs market.
Amazon is among the companies that have reduced graduate hiring, saying it had pushed back its start date for college recruits by up to six months “in light of the challenging economic conditions”. It has offered financial assistance to some hires as a result.
One recruiter said applicants to homeware retailer Wayfair and Facebook owner Meta had also been informed of hiring cutbacks. Wayfair said this month it was being “very thoughtful” about recruitment. Meta did not respond to a request for comment.
“There’s clearly been a pullback from what we were seeing in early 2022,” said Nick Bunker, economist at jobs site Indeed. “What is particularly interesting this time round is how much of it has been in higher income, traditional office jobs. And for new grads, unlike people in other parts of the labour market who can easily find new jobs, it is relatively rocky.”
Faced with labour shortages after millions left the workforce during the Covid-19 pandemic, and dealing with changing demand from consumers, US businesses rushed to hire young workers as lockdown restrictions eased. In 2022, the number of advertisements for entry-level positions was 80 per cent higher than in 2019, according to Revelio Labs, a workforce intelligence firm.
In fields favoured by graduates, including tech, law and consulting, those openings have all but disappeared.
In May, entry-level job openings had cooled to just 3.7 per cent above 2019 levels, according to Revelio. The number of postings for internships fell by 15 per cent compared with May 2022, according to Indeed, although it was still higher than pre-pandemic levels.
Meanwhile, demand for experienced workers remained healthy: Revelio found more senior vacancies were up 55 per cent compared with 2019.
“The fast-growing, sexy companies that these students grew up with and thought they would want to work at are not hiring,” said Christine Cruzvergara, chief education strategy officer at Handshake, a US jobs site targeting college students. Handshake’s data showed a decline in full-time jobs open to the class of 2023 compared with last year, she added.
Young graduates are venting their frustrations online. Some speculate that redundancies at tech firms have created a glut of more experienced workers willing to do jobs once reserved for college leavers.
“I see new jobs being posted to LinkedIn . . . but not entry-level,” one 2023 leaver noted on the forum Blind. An employee at HR software company Workday replied that early-career budgets were “sufficient” for hiring experienced developers.
One engineer at payroll servicer ADP agreed. “Why hire no experience when you have two-three [years of experience] willing to fill entry roles?”
For Monahan, the first hint that employers were reducing early-career programmes came last autumn, as he took yearly recruitment calls with the big tech companies that tend to hire Carnegie Mellon graduates.
After historically high recruitment last year, they said they would hold back in 2023. “We were told they were going to be more cautious,” Monahan said. “They were using phrases like, ‘We are evaluating our headcount’, [or], ‘We are looking to make investments in strategic areas’.”
Meanwhile, students were not leaving summer internships with job offers as they usually would. In a typical year, about 80 per cent of tech interns from Carnegie Mellon would secure offers by the end of the summer, Monahan estimated. This year, less than a third did.
“The biggest players with the most lucrative offers are in retreat,” according to Julia Pollak, an economist at jobs site ZipRecruiter.
That retreat comes despite a historically tight labour market. US unemployment was 3.5 per cent in July, a near-record low. In June, employers advertised 34 per cent more roles than in the same month in 2019, according to labour department data. But there are signs of a slowdown. The June number of job openings fell from its March 2022 peak of 12mn to 9.6mn.
Demand for jobs is concentrated in leisure, hospitality and, to a lesser extent, government, while hiring in business and professional services, the category that includes many white-collar jobs, fell 10.8 per cent between June 2022 and June 2023.
“There’s this dynamic where some of the industries, say for example, big tech, grew very quickly over the course of the pandemic, and now they are retrenching,” said Bunker. “A lot of more in-person work is still below its pre-pandemic level — so there’s still some catching up to do there.”
Some students are reconsidering post-graduation plans and looking at options such as graduate school, temporary work, or jobs in other sectors. Monahan said many Carnegie Mellon graduates that did find jobs were hired by smaller companies.
“The class of 2023 are probably looking at some of their friends and former classmates who graduated in 2021 and 2022 and saying, ‘Hey, it would have been nice to graduate into that labour market,” added Bunker.
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