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Even with talent in short supply, many US employers are seeking applicants for entry-level professional roles with several years of relevant work experience, disqualifying most fresh graduates, SHRM’s Roy Maurer reports:
A recent analysis of over 95,000 job postings by job-matching software firm TalentWorks revealed how difficult it can be for newly minted grads to find an entry-level job within their experience level. The research found that 61 percent of all full-time jobs seeking entry-level employees required at least three years or more of experience. Similarly, when labor market analytics company Burning Glass Technologies analyzed 25 million entry-level job postings from 2010 to 2016, it found an increase in the number of soft and hard skills being demanded. …
“We saw some employers increase experience requirements during the recession and decrease them during the recovery,” [Alicia Modestino, associate professor at Northeastern University School of Public Policy and Urban Affairs] said. “But another set of employers increased their requirements during the recession and have maintained them since then.” The organizations with those “sticky requirements” tend to be hiring for high-skilled occupations, which also require higher education and advanced degrees, she said.
Executives at recruiting and staffing firms tell Maurer that these experience requirements are often excessive and cause employers to discount candidates who would be successful in these roles. Skills learned at one job are not always immediately transferable to a new job, even in the same field, so the benefit employers gain from being able to train experienced recruits more quickly may not make up for them missing out on qualified entry-level talent without that experience. Besides, if every entry-level role required experience, where would newly-minted graduates work?
More US employers are abandoning unpaid internships and paying to fill the roles these interns would perform, the Wall Street Journal reported on Monday, as historically low unemployment rates and a scarcity of available workers forces them to compete more extensively for even entry-level talent.
Internships in general continue to rise in popularity, the Journal notes, pointing to a survey from the National Association of Colleges and Employers (NACE) showing that around 60 percent of college graduates in 2017 said they had an internship at some point while in school—a marked rise from just under 50 percent who said so a decade earlier. However, just 43 percent of internships were unpaid in 2017, compared to about half in 2012, NACE found, while the average hourly wage for interns increased 3.7 percent to $18.73 in 2018.
Although unpaid internships are often criticized for exploiting young people’s labor and shutting poor students out of career opportunities, employers are not paying interns merely out of the goodness of their hearts. The Journal hears from several companies that have converted their unpaid programs into paid ones, or turned down opportunities to add unpaid internships, in order to remain competitive in the market for college student and graduate talent. Young people have more options in today’s job market than they did during the recovery from the Great Recession, so employers who want to cultivate future employees through their internship programs may need to offer interns something more than college credit and experience.
The investment bank Morgan Stanley recently announced a set of new policies for its junior associates, offering higher base pay and a faster track to promotion, while also underscoring its work-life balance policies, Preeti Varathan reported at Quartz last week:
According to its memo, Morgan Stanley is raising base pay for associates in investment banking and capital markets by 20% to 25%. It is also speeding up its promotion timeline for high-performing analysts—the entry-level position below associate—from three years to two. The memo also reiterated the bank’s current vacation and hours policies: two mandatory one-week vacations every year and limited staffing on Fridays and weekends.
Wall Street has long had a reputation for debilitating hours, consecutive all-nighters, and frequent weekend work. But even the most competitive firms are now grappling with a new generation’s insistence on rapid promotions and better work-life balance. “The ability to recruit, develop, and retain top talent by offering attractive career opportunities is a key priority,” the memo noted.
Indeed, at a time when the labor market is tight and employers in all industries are having to compete harder for talent, it’s unsurprising to see another large employer make investments in its most junior employees. The financial sector, however, has also been grappling for several years now with a particularly difficult employer brand problem. More than ever before, prospective employees now question whether the lucrative rewards of investment banking’s traditional high-stress, high-pay model are worth the costs to their quality of life.
A tight labor market has put the squeeze on US employers of all shapes, sizes, and sectors, but retailers are having a particularly hard time attracting associates and managers for their brick-and-mortar stores. Observing that retail hiring for the holiday season has been notably slower to start up this year, Reuters explores the causes of the retail sector’s talent crunch:
Sector observers have attributed this to brick-and-mortar retailers’ retreat under pressure from online players including Amazon, and firms themselves say they have simply taken a staggered approach to hiring this year that fills gaps slowly. Macy’s said holiday hiring was “off to a great start”. But staffing companies that hire employees for the industry say the problem is deeper and is putting pressure both on the quality of staff retailers can hire and, sooner or later, wages that potential candidates will demand. …
“Where we have a problem hiring is the lower level, the seasonal or entry-level employees,” said Melissa Hassett, vice president of client delivery for ManpowerGroup Solutions. Her clients include Lowe’s Cos Inc, Staples and auto parts firm Pep Boys and she says employees are seeking more flexibility with their schedules, training and pay, which is competitive with other entry-level jobs.
The competition from e-commerce has been visible in this year’s early holiday hiring numbers, where warehouse and fulfillment roles are making up a substantially larger share of the seasonal workforce. UPS and FedEx, for instance, are adding 95,000 and 50,000 staff, respectively, for the holidays, while Amazon and other e-commerce companies have ramped up hiring. Anticipating the need for these workers, some companies began recruiting them all the way back in the spring.
An illuminating new survey of recruitment professionals conducted by Mercer and the Society for Human Resource Management finds that only 20 percent are fully confident in their organizations’ ability to assess the skills of candidates for entry-level positions using traditional methods such as interviewing or reading applications and résumés. SHRM’s Roy Maurer elaborates on the findings:
Most employers use in-person interviews (95 percent), application reviews (87 percent) and resume reviews (86 percent), but nearly one-half of respondents said they have “little or no confidence” in application and resume reviews.
“Since application and resume reviews are typically the first line of screening for job applicants, many candidates never even get to the interview,” said Barb Marder, a senior partner at global consultancy Mercer. Respondents expressed much more confidence in using in-person interviews to assess candidates. Marder added that entry-level applicants without any work experience often have trouble getting past the review phase because HR dismisses them for lack of experience.
This year’s crop of college graduates, some of the first recognized members of Generation Z to enter the workforce, are doing so at an opportune moment. In the US, the college wage premium has never been higher, meaning these grads stand to earn much more than their peers without degrees. The graduate hiring market is also robust, with CareerBuilder reporting last month that 74 percent of employers plan to hire recent college graduates this year, the best outlook since 2007 and seven percentage points above last year’s figure. In terms of pay, CareerBuilder found that half of employers plan to pay graduates higher salaries this year than last, and 39 percent will pay starting salaries of $50,000 or more a year, up from 27 percent last year.
However, the job search site also found that “some employers are concerned that new college grads may not be ready for the workforce”:
Seventeen percent do not feel academic institutions are adequately preparing students for roles needed within their organizations, a decrease from 24 percent last year. When asked where academic institutions fall short, these employers cited the following concerns:
- Too much emphasis on book learning instead of real-world learning: 44 percent
- I need workers with a blend of technical skills and those skills gained from liberal arts: 38 percent
- Entry-level roles within my organization are more complex today: 23 percent
- Technology is changing too quickly for an academic environment to keep up: 17 percent
- Not enough focus on internships: 17 percent
- Not enough students are graduating with the degrees my company needs: 12 percent
Meanwhile, Fast Company’s Lydia Dishman flags another new survey from iCIMS, which finds that graduates have high expectations for their job prospects, but even in today’s employee-driven labor market, these expectations may be a bit unrealistic:
In a New York Times op-ed published on Tuesday, JPMorgan Chase CEO Jamie Dimon revealed that the bank would raise the minimum wage of its retail banking employees from $10.15 today to between $12 and $16.50, “depending on geographic and market factors,” over the next three years:
A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long. Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth. And it’s good for our company, helping us attract and retain talented people in a competitive environment. While businesses, including ours, are understandably cautious when it comes to expenses, there are good expenses (investments that will pay off in the long run) and bad expenses (waste and inefficiencies). We have never hesitated to invest aggressively if we thought it would improve our long-term prospects.
While a higher wage is important, so are benefits. Our lower-compensated employees receive a medical plan — subsidized up to 90 percent by the company — as well as dental, vision and other coverage. Many of these and other benefits, including a 401(k), pension, a special annual award, paid family leave, paid vacation and bereavement, have been increased in recent years. In total, the annualized value of all of our benefits for these employees is on average approximately $11,000 a year above their existing wages.
It is true that some businesses cannot afford to raise wages right now. But every business can do its part through whatever ways work best for it and its community.
Dimon’s announcement comes as other large employers are moving to raise wages for their lowest-paid staff.