According to a recent study from the Federal Reserve Bank of New York, 44% of recent college graduates are underemployed.
This means they have jobs, but they're overqualified for those jobs either because of their skills or educational attainment. Pressure is rising on colleges to reduce underemployment as students and their families grow increasingly concerned about the return on their education.
Matt Sigelman, CEO of Burning Glass Technologies, shares three reasons for the widespread underemployment—and how colleges can tackle each challenge.
1. There are more graduates than entry-level positions
Sigelman notes that few jobs are truly entry-level these days. Many available jobs in coveted fields require years of experience, making them inaccessible to recent grads.
He says that in the videogame design industry, for instance, 77% of available jobs required multiple years of experience. Sigelman described a similar phenomenon in the medical coding field—the number of recent graduates from coding programs is about equal to the number of open medical-coding job positions, yet less than 60% of these graduates are actually qualified for these positions.
Even internships are raising the bar for entry. Another recent study from Burning Glass found that nearly 75% of internship postings required industry-specific skill sets.
2. Graduates don't have all the qualifications they need
Sigelman also says many students lack crucial skills that can make the difference between being qualified for a position—and merely almost qualified. He argues colleges need to do more to ensure that students are getting these "last mile" skills that help them land jobs.
And though the English major serving coffee is the stereotypical example of the skills gap at play, Sigelman points out that "far more students are enrolled in seemingly practical majors in which the job prospects are worse."
For psychology majors, for instance, a simple course in statistics could increase future salaries by $24,000 annually, notes Sigelman.
3. Students are under-informed about the skills they'll need to get a job in their field
Finally, Sigelman points out that the job market is confusing and not transparent to many students. They are largely in the dark about how "last mile" skills will improve their chances of securing a job.
Sigelman acknowledges that many colleges are already trying to create opportunities for students to acquire skills and experiences that complement their chosen field, by offering minors, specializations, and concentrations.
However, he says that students lack all the information they would need to draw the connection between those academic experiences and specific job opportunities.
While many career services centers might think they advertise these options, a 2016 Gallup survey found that only one in six graduates say they found career services to be "very helpful."
"In many cases, the right courses are already there; they just need to be labeled in ways that make their utility visible to students," explains Sigelman (Sigelman, Hechinger Report, 3/13).
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