College graduates who are looking for work face an unpredictable labor market.
“It’s just a very odd time,” said Lisa Severy, a career adviser at the University of Phoenix who has been in collegiate career services since 1996. “I feel, for the first time, none of the rules that we generally follow are valid anymore.”
Many older and senior-level employees have left the workforce during the pandemic, and employers have been on the lookout to fill those positions with cheaper workers.
Meanwhile, some graduates who landed jobs at Coinbase COIN, -0.15% and Twitter TWTR, +0.64% saw their offers rescinded. Other Big Tech companies such as Meta META, +3.38%, Microsoft MSFT, +1.11% and Google GOOGL, +2.60% have announced hiring freezes, all addressing facing macroeconomic headwinds.
“Some graduates who landed jobs at Coinbase and Twitter saw their offers rescinded. Other companies such as Meta, Microsoft and Google have announced hiring freezes.”
According to Twitter, the decisions were part of the cost and operation management of the company under the challenges in the current environment. Recognizing the difficult situation of those candidates, it has offered compensation to support their future job search.
Google and Alphabet pointed MarketWatch to the recent earnings call where Ruth Porat, CFO of Google and Alphabet cited the “uncertain global economic outlook” as part of the reason behind the hiring freeze.
A Meta spokesperson said the pause in hiring for certain roles would be temporary, allowing time for the leadership to identify key areas of the business to put more effort into. The company is excited to resume hiring in high-priority areas again.
Microsoft also deferred MarketWatch to its earnings report and Microsoft’s CFO, Amy Hood responded: “As we manage through this period, we will continue to invest in future growth while maintaining intense focus on operational excellence and execution discipline.”
(Coinbase did not respond to a request to comment.)
Ford F, +2.64% announced earlier this week that it had laid off around 3,000 white-collar and contract workers to cut costs and sharpen its focus on electric-vehicle production.
And Apple AAPL, +1.49% announced a layoff of around 100 recruiters last week. Walmart WMT, +0.67% laid off 200 corporate staff this month, but said in a statement that it would continue investing in e-commerce and supply-chain jobs.
(Ford and Apple did not respond to requests for comment.)
Entry-level workers need to watch out
Entry-level, white-collar workers should watch out, said William Lee, chief economist at the Milken Institute, a Santa Barbara, Calif.-based think tank.
He said entry-level workers were made more vulnerable as companies upgraded their business models after the worst days of the COVID-19 pandemic. Many businesses substituted entry-level roles with apps and new technology in order to cut costs and make their business processes more efficient.
“Because of the great demand for blue-collar workers, economists told MarketWatch last month that in the event of an economic downturn, it would be a ‘white-collar recession.’”
It’s not all bad news. The unemployment rate dipped to 3.5% in July from 3.6% in June, falling back to pre-pandemic levels. Wages rose 5.3% annually over the last three months.
Overall, the labor market is picking up after being hit in the early days of the pandemic. That’s especially true for lower-paid jobs in the retail, manufacturing and service sectors.
Because of the great demand for blue-collar workers, economists told MarketWatch last month that in the event of an economic downturn, it would be a “white-collar recession.”
Here are some tips for young, white-collar workers:
1. Learn to be open-minded and flexible
So what next? Keep an eye out for jobs that may not be your first choice, said Cody Harker, head of data and insights at Bayard Advertising, a full-service recruitment advertising agency.
Although people usually pay attention to layoffs in the tech sector, there are plenty of entry-level tech jobs in other sectors outside of the Silicon Valley bubble, Harker said.
“Companies that are not traditionally known as tech entities have a really tough time hiring software developers,” Harker told MarketWatch.
The current hiring situation is regional as well, Severy added. Entry-level workers, therefore, should remain open-minded about the location of their first or second job.
2. Apply to roles that seem like a stretch
Often, Severy said, some clients tend to underestimate what they can offer employers. “They really need to start to think bigger, and to stretch their expectations,” she said.
Never tell yourself, ‘If I don’t meet every single preference on a job, I’m not going to apply.’ Be ambitious about applying, and prepare for tough questions in the job interview.
“None of us have any idea what the candidates are going to look like for a particular opening,” Severy said. Requirements are oftentimes aspirational, she said.
“If you prepare for an interview, you can say, ‘Actually I don’t have experience in that area. I’m very excited to learn more about it. And I’m a quick learner,’” Severy said.
In addition to that, she also recommended applying for some jobs that might look lateral to one’s degree or skillset, as they might serve as an entry point to a new industry.
In general, one should always apply to both kinds of positions, some that one overqualified for and some that might seem like a stretch, Severy said.
“Sometimes people(recruiters) are pleasantly surprised that you have a set of skills that are different from the rest of the candidate pool,” she added.
3. Good old career-management skills work
Community building and networking are still the best ways to get hired, Severy said. “I don’t know that’s ever going to change,” she said.
Prospective employers will be willing to compromise on certain job requirements, Harker said. “Employers are still hurting to hire,” he said.
And recruitment issues will persist, so don’t be afraid to ask prospective employers what plans they have — if any — in the event of an economic slowdown, he said.
“Make sure that they know, that everybody that you know knows, you’re looking for a job and what you’re looking for,” Harker added. That’s a win-win for recruiters, and for you.
4. Find ways to make yourself valuable
To avoid anxiety around “last in, first out,” or some employers’ policy of prioritizing layoffs for newer hires, workers should always try to find ways to make themselves valuable, Severy and Harker told MarketWatch.
An entry-level worker should always be in learning mode, get to know the company culture and their supervisor, and ask lots of questions.
“There are no dumb questions,” Severy said. “Later on in your career, you’re expected to know all that stuff. But when you’re a newbie, not so much.”
Meet your deadlines, be creative, find solutions to problems, and keep open lines of communication with your manager and customers, Severy said.
“When a manager does need to make those really hard decisions, it’s harder to just look at the newbie and say ‘OK, you need to be gone,’” she added.
Always have a support system — a social and professional network — to rely on if things get tough at work or, in a worst-case scenario, you lose your job, Severy said.
Contradicting labor-market signals
Bottom line: The economic backdrop is mixed. Inflation climbed 8.5% annually in July, reaching a 40-year high. Grocery prices and rents have soared, forcing consumers to cut their spending.
However, as retailers and other service providers were still hungry for workers, some economists predicted if a recession came, blue workers would not be affected as much, at least not in the way how recessions usually work.
But heightened demand for blue-collar workers does not mean those workers are necessarily safe, said Kate Bahn, chief economist at the Washington Center for Equitable Growth, a nonprofit think tank based in Washington, D.C.
She said with no major structural changes in the economy, the small gains lower-paid workers made in the past year would likely vanish as the economy cools down.
“Workers are still not where they should be in a healthy labor market, because there’s just so much income inequality, and wage growth is still quite low for a lot of workers,” Bahn said.