Placing entry-level job candidates has its own set of challenges in the COVID-19 economy. So, what does the labor market look like for recent college graduates and those entering the workforce for the first time?
The biggest hurdle for recent grads is fewer available jobs. With the U.S. economy in flux, many employers are in a hiring freeze or may not be as willing to take a chance on someone with little experience or technical skills.
Employment Landscape & Outlook
Compared to workers ages 25 and older, job seekers between the ages of 20 to 24 have high levels of unemployment. Their jobless rate peaked in April at 25.7%, much higher than the 14.5% peak of those 25 to 34 years of age. While unemployment levels for all ages have dropped since April, younger job seekers – ages 20 to 24 – still have higher rates of joblessness than other age groups. As of July, that age group still had an unemployment rate of 18.3%, roughly three times the pre-pandemic average.
For those without a college degree, jobs they’d often have are in industries hit hardest by the pandemic. Employment at bars, restaurants, movie theaters, amusement parks, and retail stores has dried up, as virus prevention measures have forced these businesses to operate at smaller capacities or to keep their doors closed. Although Leisure and Hospitality added 4.3 million jobs and Retail Trade added 3.3 million jobs between March and June, they still have not reached their pre-pandemic employment levels.
While recent college grads currently have fewer job opportunities than in February, the U.S. economy has incrementally improved. For instance, the country added more than 1.7 million jobs in July. Many college grads who are knowledge workers may have a slight advantage in the job market. Occupations in Professional and Business Services and Financial Activities, which mostly consist of knowledge workers, have fared better during the pandemic recession.
Related: Top 10 Most In-Demand Occupations
Entry-level job seekers in metros not as reliant on tourism and more dependent on industries requiring higher levels of technical skills (knowledge workers) will experience an improved job market sooner than other parts of the country. ThinkWhy expects these metros to mostly recover in 2022: Atlanta, Dallas, Denver and Phoenix. Austin, Texas; Charlotte, North Carolina; Seattle and San Francisco will also likely see an improved labor market starting in 2023.
Keeping Talent Pipelines Open
For businesses that are not able to hire recent college graduates or candidates entering the workforce on a full-time basis, other opportunities may be created to stay connected to talent.
- Expand your talent pool by increasing the number of colleges and/or metros you normally recruit from, which can help with increasing diversity in the workforce.
- Offer learning opportunities – virtual or socially-distanced – to students or interns to make them aware of your organization as a potential future employer.
- Offer part-time employment that can become full-time in the future.
Even during a recession, businesses can find bright spots. Entry-level employees have lower salaries and are eager to gain experience to grow in their careers. They may also offer professional development opportunities for mid-level employees who can train or supervise the work of these entry-level employees. Businesses need to constantly adapt, after all, so businesses must recruit not only for their current condition but also for their future one.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, businesses, and salaries across the U.S.