By Gail MarksJarvis
WWR Article Summary (tl;dr) According to a survey by Accenture, the number of graduates seeking jobs at large companies is up 37 percent over last year’s graduating class. The study describes this year’s graduates as more like their parents’ generation than the millennials that preceded them in college.
The fantasy of graduating from college and immediately going to work with the next Mark Zuckerberg is dying.
For the first time in years, fewer college graduates are enamored by the idea of working for startup companies. Instead, this year’s college graduates say they want the security and stability that comes from employment at large established companies, according to a survey by Accenture.
The number seeking jobs at large companies is up 37 percent over last year’s graduating class, according to researchers for the business management consulting firm, who describe this year’s graduates as more like their parents’ generation than the millennials that preceded them in college.
Millennials are known as an entrepreneurial group, a generation skeptical of big business and drawn, instead, to small startups where they can get in on the ground floor, innovate, make their mark and maybe get rich off of stock options if the business hits it big.
But working for startups is tough. Only a few grow into a Facebook or Google. Most don’t survive. And this year’s graduates, who fit into the next generation, Gen Z, are in no mood for risks.
“They’ve seen the classes before them and their predecessors feeling underemployed,” said Teri Hill, managing director for Accenture. “This group fears that the most.”
To compile its report, Accenture surveyed 1,000 U.S. students between the ages of 18 and 24 who are graduating from college in 2017, and 1,000 students who graduated in 2015 or 2016. The online survey was conducted in January and February of this year.
Accenture found that 54 percent of the people who graduated a year ago consider themselves underemployed, or working in positions that don’t fully utilize their skills. About 49 percent accepted a lower salary or benefits than they anticipated and 44 percent found it difficult to get a job.
Rather than being drawn to an entrepreneurial experience, this year’s graduates stress the significance of getting a good salary and training on the job, according to the report.
About 84 percent expect their first employer to provide formal training.
That is exactly the opposite of what small startups typically offer.
“They hire real smart people, but it’s millennials leading millennials,” said Christine DiDonato, founder of Career Revolution, a workplace leadership training consultant. “It means working many hours, having no development and a lot of growing pains. Few can stick it out.”
DiDonato, who previously was a human resources manager at Sony, said getting graduates to consider employment at a large company was difficult in years past because of the allure of startups. The fact that this year’s graduates are turning back to large companies for employment is a sign of how different their perspective is.
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Still, new graduates may be surprised if they think they will be nurtured and trained at large companies.
After the financial crisis, companies slashed their training budgets. Most training money goes toward top executives with the assumption that the benefit will trickle down to the workers.
And with plenty of college applicants, companies select individuals who have all the skills needed rather than people who need training, said Kenneth Tsang, an analyst for the National Association of Colleges and Employers, a group which includes professionals in college career services, university relations and recruiting.
Still, if there is a training budget it’s more likely to exist in the largest companies. According to information from the Brandon Hall Group in Training Magazine, the average training budget for companies with 10,000 or more employees is $13 million. Midsized companies of 1,000 to 9,999 employees spend $3.7 million on average, and companies with fewer than 1,000 employees budget $290,000 on average.
“Employers are looking for people with the relevant skills so they don’t have to spend time and money on training,” Tsang said. Large companies use internships to train and weed through possible full-time job candidates, but even those internships have been reduced recently, he said.
Companies also may be cutting back on new graduates in favor of more seasoned employees. Of all the hiring done last year, 48.3 percent involved recent college graduates, according to research by the colleges and employers group. In 2013, 57.2 percent were recent graduates.
Last year only 46.2 percent of graduates received job offers as they were finishing college, and the results diverged greatly based on the students’ degree, the group found. Only 27.8 percent of communications majors received job offers, compared with 61.5 percent of those in computer science. Pay was also dramatically different. While the average was $47,000, graduates in computer science were offered $64,000 while those who got jobs in communications made $35,000.
In the Accenture survey, 69 percent of 2017 graduates expect to make more than $35,000. Among people surveyed from the 2015-2016 graduating class, only 49 percent were making $35,000.
ABOUT THE WRITER
Gail MarksJarvis is a personal finance columnist for the Chicago Tribune and author of “Saving for Retirement Without Living Like a Pauper or Winning the Lottery.”