Four Out of 10 Recent College Grads are Underemployed, New Accenture Research Finds
Young workers want more training but employers disappoint
NEW YORK--(BUSINESS WIRE)-- U.S. employers are underutilizing the capabilities of young, college-educated workers, according to new research by Accenture (NYS: ACN) that reveals that 41 percent of workers who graduated from college in the past two years say they are underemployed and working in jobs that do not require their college degrees. The research also reveals that, despite their degrees, nearly two-thirds (63 percent) say they will need more training in order to get their desired job.
The Accenture 2013 College Graduate Employment Survey polled 1,010 students who will be graduating from college in 2013, and 1,005 students who graduated from college in 2011 and 2012, to compare the perceptions of those students preparing to enter the job market with the experiences of recent grads in the workforce.
The study identified a wide gap between the expectations 2013 graduates have for employer-provided training and what they are likely to receive when they start working. More than three-quarters (77 percent) of pending 2013 graduates expect their first employer to provide formal training, but fewer than half (48 percent) of 2011 and 2012 graduates surveyed say they received formal training in their first job after graduation.
"A solution is sorely needed to bridge the disconnect between employers that are concerned about college graduates being unprepared for available jobs and the graduates who feel overqualified for them," said David Smith, senior managing director of Accenture's Talent & Organization practice. "Hiring someone with a higher-level degree than is necessary for a given job does not typically result in a higher-performing employee, and does not reduce the need to invest in training specialized skills."
Further underscoring the disillusion felt by recent college graduates, 42 percent of 2011 and 2012 graduates expect they will need to pursue a graduate level degree to further their career. This is more than twice as many as only 18 percent of 2013 pending grads who expect to do so. Nearly a quarter (23 percent) of 2011 and 2012 graduates also plan to take graduate-level courses or online courses to develop their skills.
"For our nation's youngest workers, as well as for the workforce at large, there is a real need for employers to reexamine how they hire, train and develop their employees," said Katherine Lavelle, managing director of Accenture's Talent & Organization practice in North America. "Students come out of school with great generalist skills, but need tailored training to develop the specialist skills U.S. companies need. Employers need to improve the training they provide, develop deeper partnerships with universities and explore approaches such as apprenticeships to ensure they develop the necessary skills in their new hires and existing employees."
Accenture recommends employers improve how they hire and develop young workers coming out of college:
- Hire based on potential. Let go of the idea of finding perfect candidates that meet every skills criteria and instead invest in young people with strong generalist skills who, with some training and experience (and perhaps some job redesign), can perform in roles you might not have matched them to at first glance. Use assessments, performance analysis and skills databases to identify those young workers with strong potential.
- Make training part of the total employment package. Training is a "chicken or the egg" dilemma; young workers need experience to get a job but they need a job to get experience. Employers cannot assume recent college graduates will arrive on the job with all the skills they need. Employers need to provide more, and better, training and should use it to be an employer of choice.
- Work closely with educational institutions. Develop work experience programs like internships or apprenticeships, create externships for professors and instructors, engage in curriculum development and create customized training and industry credential programs. These will help develop a fresh crop of talent that is better suited to your organization's needs, and lead to better matching of students to jobs.
In addition to studying the skills and training gap, the Accenture 2013 College Graduate Employment Survey also explored college graduates' expectations and experiences with the job market, salary and living arrangements:
It's a Challenging Job Market
As of late March, only 16 percent of students who will graduate in 2013 had already secured employment. To secure a job in the current job market, one-third (34 percent) of the pending 2013 graduates say they are prepared to accept their first job offer, while 27 percent would consider working in a field other than their college major.
Of the survey respondents who graduated in 2011 and 2012, 68 percent are currently employed full time and 16 percent are working part time. More than half (57 percent) say finding a job was difficult, but 39 percent had jobs by the time they graduated and another 42 percent were employed within six months of graduation. However, seven percent say they haven't had a job since they graduated in 2011 or 2012.
Among the 2011 and 2012 grads who are unemployed, 48 percent said they would have fared better in the job market with a different major and 57 percent expect to go back to school within the next five years. Of the 2011 and 2012 grads with a two-year degree, 52 percent say they will need to get a four-year degree in order to get the job they want.
Working in Your Field of Study Is Not Guaranteed
The study found that the top three industries that 2011, 2012 and 2013 graduates want to work in are education, media & entertainment and healthcare.
Nearly two-thirds (64 percent) of pending 2013 college graduates expect to be employed full-time in their field of study, compared with 53 percent of 2011 and 2012 graduates who are currently working in their field of study full time. When 2011 and 2012 college graduates who are not employed in their field of study were asked why, 45 percent said it was taking too long to find a job and 32 percent said there were not enough job openings in their field. Out of the 72 percent of 2011 and 2012 graduates who participated in an internship while still in school, only 42 percent said the internship led to a job.
Among the students who will graduate in 2013 from a four-year institution, one-quarter (26 percent) transferred from a junior or community college, while only 11 percent of the 2011 and 2012 graduates of a four-year institution began their college education at a junior or community college.
2013 Graduates Have Outsized Expectations for Salary and Living Arrangements
Salary expectations among pending 2013 graduates are out of line with the current job market. Only 15 percent of pending 2013 grads expect to earn less than $25,000 a year, while one-third (32 percent) of 2011 and 2012 graduates who are employed report their current annual salary is $25,000 or less.
Nearly one-third (30 percent) of pending 2013 graduates and 34 percent of 2011 and 2012 graduates have $30,000 or less in student loans, while 17 percent of pending 2013 graduates and 13 percent of 2011 and 2012 graduates have student loan debts of $30,000 to $50,000. Of the students who will graduate with student loans in 2013, 64 percent are taking on the debt themselves and will pay it off without help from parents.
One-third (32 percent) of pending 2013 graduates plan to live at home after graduation, while 44 percent of 2011 and 2012 college grads currently live at home.
About the Study
Accenture conducted an online survey in the United States of 1,010 students graduating from college in 2013 and entering the job market, and 1,005 participants who already graduated college in 2011 or 2012. The survey was conducted between March 22 and April 1, 2013.
Learn more at www.accenture.com/CollegeGradSurvey
Accenture is a global management consulting, technology services and outsourcing company, with approximately 261,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.
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