Here’s one more reason to throw your college mortar board in the air.
It’s the hottest job market in years for the expected 1.9 million students who will graduate. Employers are estimated to hire about 5 percent more graduates from the class of 2016 than last year, according to a recent report by the National Association of Colleges and Employers.
“There are jobs for college graduates and it’s important for employers to have college graduates in their workforce,” said Andrea Koncz, the association’s research manager. The hiring outlook was based on aspring survey from 144 members of the association.
In addition, the unemployment rate among those over age 25 with a bachelor’s degree or higher is at 2.4 percent, less than half the overall rate of 5 percent, according to the Bureau of Labor Statistics’ most recent jobs report.
That’s particularly good news for those at the start of the careers, especially students who majored in the most in-demand fields of engineering, business, computer science and accounting, where unemployment rates can be even lower. Among software developers, for example, the unemployment rate is as low as 1.8 percent (with high salaries and job growth to boot).
Four in 5 of this year’s graduates said they considered the availability of jobs in their field of study before deciding on their major, according to a college graduate employment study by Accenture. That pragmatism has paid off: 21 percent of the class of 2016 accepted a job before graduation, up from 12 percent last year and 11 percent two years ago.
“Optimism is at an all-time high,” said David Smith, a senior managing director at Accenture Strategy.
However, it’s not all roses and graduation cards full of cash. While the class of 2016 has better job prospects than those in any class since the Great Recession, the labor market has not yet fully recovered and this year’s graduates may be competing for the same jobs as last year’s graduates as well as those from the year before that.
The number of recent college graduates that are underemployed, or are accepting low-wage jobs or part-time work, is also increasing, Accenture found. To that point, 51 percent of graduates from the classes of 2014 and 2015 said they are working in jobs that do not require their college degree, up from 41 percent of graduates who reported the same the year before that.
As a result, salaries have suffered. While the average starting salary is just shy of $50,000, the National Association of Colleges and Employers said, 39 percent of graduates from the classes of 2014 and 2015 are making $25,000 or less, according to Accenture — even as student loan balances have climbed to an all-time high.
This year’s graduates are determined to do better: 82 percent of 2016 graduates expect to earn more than $25,000 in their first job, and they likely will.
Employers said they plan to raise starting salaries by about 3.2 percent for new college hires this year, according to the association’s report.