The Class of 2010 must be cursing their collective bad luck. For most of their college career, they watched employers wooing their older classmates with promises of high salaries and signing bonuses. Then they sat back, dumbfounded, as the Class of 2009 confronted the worst hiring situation in decades. Now, they have to face the fact that the jobs recovery still remains elusively over the horizon.
I’ve worked with students through several economic downturns, and there are always winners and losers in the employment game. The spoils this year go to the graduates with smarts, strong technical skills, and—most important–relevant work or internship experience.
The cruel irony is that the “losers” in the current senior class are often the ones who, since they were in diapers, have been told they were the best and the brightest. Armed with self-confidence, stellar SAT scores, and ambition, they matriculated at some of the top colleges in the U.S., majoring in subjects like Spanish, Anthropology, and Psychology.
Contrary to the general assumption, most of these students never intended to become translators, or anthropologists or psychologists. A significant proportion saw their education as a great preparation for a career in business—especially if they supplemented their majors with a minor in computer science or economics. Now they’re not so sure.
DUBIOUS PARENTAL AND FACULTY ADVICE
Students fitting this profile in the late 1990s would have catapulted themselves to the top of the career ladder by naming themselves CEO and authoring their new dot-com business plan on the back of an envelope. Since the tech bubble burst, this type of student has been increasingly drawn to the pay, prestige, and intellectual challenge of investment banking and management consulting. These two career fields rarely employed more than 20% of a university’s graduating class, but their firms’ recruiting seal of approval became synonymous with the perceived quality of the academic institution.
So what now for the college senior? Not only are finance and consulting opportunities in short supply, the rest of the employment landscape still looks bleak. The unemployment rate for college graduates under the age of 25 has increased more than 120% in the past two years, and while the rate of unemployment has leveled off, it is still at historic highs. Given the dire news, it’s small wonder that a large number of soon-to-be-graduates are sticking their heads in the sand and avoiding anything that smacks of the real world.
Many 2010 graduates are being aided and abetted in their retreat from reality by an unlikely alliance: parents and faculty. The dubious advice they are being given is to “wait out the recession” and go to graduate school. For faculty, it’s a no-brainer to encourage some of the brightest minds to stay in the academy—especially since they may honestly believe it’s for the good of the student. The reasons that parents give this advice are often a little more complicated.
IS A MASTER’S WORTH IT?
Parents of 2010 graduates have been more involved in their children’s education than at any other time in history. Throughout grade school and high school, they have nurtured their children’s talents, found tutors when necessary, and guided extra-curricular activities so their sons and daughters would find success in the college application sweepstakes. The reward for their efforts? A hefty bill for tuition and expenses that often exceeds $150,000. The expected quid pro quo for such an investment has been post-graduate professional success for their offspring. Unemployment, particularly long-term unemployment, is unacceptable.
Many parents also assume that a graduate degree will automatically confer an economic advantage to their sons and daughters. A quick glance at the Bureau of Labor Statistics chart shows what appears to be a clear correlation between education and salary. Crunch a couple of numbers and you find a 25% economic benefit to a master’s degree over a bachelor’s degree and a 55% pay differential between those with just a bachelor’s degree and those with a professional degree.
The devil, of course, is in the details. In a September 2007 article, “Is your degree worth $1 million—or worthless?” author Liz Pulliam Weston attempts to calculate the actual value of particular types of degrees over a lifetime. Her conclusions are generally consistent with what I have observed. One of her most notable findings: Recipients of masters degrees in the liberal arts or social sciences actually gained no economic value from further education.
On the other hand, Ms. Weston clearly illustrates the benefits of a professional degree. She calculates that over a lifetime, an MBA graduate will make $375,000 more than if she had simply finished her education with a bachelor’s degree. That’s an impressive figure, so why not encourage new grads to get an MBA? Trick question. Most schools will rarely accept candidates for an MBA without at least two to three years of experience. In fact, the average number of years of work experience for students in business school is typically around five.
Students could find an international business school that might accept them immediately after graduation, but they’d be missing out on something U.S. schools consider very important: the ability to put business education in context and to bring real world problems and solutions to the table.
The financial advantage of an MBA is also tempered by the actual, and lost opportunity, costs of attending. With more than $100,000 of debt at stake—often on top of undergraduate loans—graduates need to be 100% sure about the value of an MBA for their chosen career field before signing on the dotted line. An MBA degree might be a real plus for someone interested in nonprofit management, but the economic equation may not make sense.
A number of schools, including Case Western Reserve, have started masters programs designed specifically to give liberal arts grads a background in business. Located in the university’s business school and lasting a year or less, these programs can be very popular with students who like the idea of a “transition” degree which orients them more towards the business world. Unfortunately, these degrees are expensive and are often not well understood outside academia. The verdict is still out on whether one year masters programs give graduates a leg up in the work world. Employers typically recruit at the undergraduate or the MBA level but don’t know what to do with the student who does not naturally fit into either category. A better option might be to consider an intense short-term program, like the Tuck Business Bridge program at Dartmouth College.
“GET A JOB, ANY JOB”
Listening to my cautionary tales about graduate school and the job market, it would be easy to descend into despair. But new graduates have always been able to find jobs even in the worst recessions. Employment opportunities do exist, and the proactive job seeker will hunt them down, using connections and resources to expand the scope of his or her search. Increasingly, students and their families are looking to private career advising to obtain the kind of personalized attention and targeted strategies that give students an advantage in a challenging job market.
I recently asked three employers what they recommend students do if they are interested in going into an area of business after they graduate. All three agreed that students need to get experience, not more education. One went as far as to say “get a job, any job, even McDonald’s.” The point is, in this economy your GPA or your SAT score may be less important than your experience and your attitude. Arrogance is out; humility is in.
Companies these days can afford to be picky. They want to know whether you can do the job that they need to have done. If you’re graduating in a major that is unrelated to your career interest, you’ll have to take the extra steps necessary to show the relevance of your education. Sometimes that means focusing the employer’s attention less on the subject matter of your degree and more on your internships or extra-curricular activities. However challenging the job market, the savvy job hunter will always find creative ways to make the hiring case, and in doing so, stand out from the crowd.
Addressing Brown University students in a careers program during a past recession, the late Frank Newman, former president of the University of Rhode Island, announced to his audience that they were graduating at the best of times. What he meant was that the graduate who can successfully find opportunities when times are bad will be well positioned for a lifetime of changing jobs and careers. I believe that’s excellent advice for the Class of 2010.