Your Class of 2013 Will Lose $12,000,000 in Wages

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If your college graduates 500 students, your Class of 2013 will collectively lose $12,000,000 in wages because they won’t have a job by graduation day.

How did I come up with that?

The National Association of Colleges and Employers 2011 Student Benchmark study showed that the average grad took 7.4 months to get a job after graduation.   Assuming the average grad earns $3,000 per month, the average grad lost nearly $24,000 in salary because he or she did not have a job lined up immediately after graduation.  Now take the lost salary for one grad, and multiply that by 500, and you get $12,000,000!    That’s the cumulative lost salary of all grads.  Think that is a huge chunk of change?  Consider these numbers!

  • 1,000 grads results in $24,000,000 of lost salary
  • 2,000 grads results in $48,000,000 of lost salary
  • 4,000 grads results in $96,000,000 of lost salary

A large state college would see its Class of 2013 lose out on earning $100,000,000!   The 1,700,000 students that graduate nationwide will collectively lose out on earning $40,800,000,000!  Yep that’s BILLIONS!

Is anyone taking responsibility to drive this number down?

This is such a HUGE, mind numbing number that I would think the presidents council at colleges; banks, Sallie Mae, the government, or somebody would be doing something to help grads line up jobs by graduation day.

But sadly I’m not seeing any significant movement, plan or program being introduced.   I was hoping the Occupy Wall Street Movement would spill over to college campuses and that students would raise their concerns about this to administrators.  But it didn’t.  I was hoping parents would start shopping for colleges based on the successful job search stats of their grads.  But it hasn’t happened.   I know career center professionals like yourself have been trying to get the administration to provide more resources, to require students take career courses, but all you’ve gotten is budget cuts!

I know from surveys, like the one conducted by the Career Advisory Board, that career center professionals like yourself are very concerned that you can’t effectively help grads because students have a poor understanding of the effort required to secure employment.

So what could be done to reduce the number of months it takes a grad to get a job?  The Department of Labor reminds us there are 3,000,000 jobs available at any one time.  Could your campus adopt strategies to make sure your grads grabbed these by the time they graduated?    I think so.   Here are  a few ideas that don’t require a lot of money, time, permission and/or resources!

  1. Administrators need to focus the campus culture on careers.
  2. Students should be required to invest time in career planning.
  3. The government needs to provide tax incentives to firms hiring grads.
  4. Parents need to keep their students focused on careers.
  5. The alumni association needs to actively connect students and alumni.

1)  Administrators need to focus the campus culture on careers.

In my report Create a Career Centered College Culture and Curriculum, I shared 12 ways a college could change their culture to focus on careers.  The yearly study by the UCLA’s HERA Institute shows that 88 percent of the 2012 incoming freshman are going to college in order to improve their odds of getting jobs and having successful careers.   If that is the case, why are we not emphasizing careers instead of sports, 400 clubs, and volunteerism? The career center is near the bottom of the list when you compare the budget per student served, or career advisor to student ratio.  This will require the administration to get the faculty behind your plan to require students to take career courses and encourage them to incorporate in the curriculum an understanding of how the student will be able to use the information learned in seeking a career.

2) Students should be required to invest time in career planning.

I mentioned in my book, The Unemployed Grad, And What Parents Can Do About It,  an organization called the Campus Compact where 1200 college presidents committed their colleges to require students to invest a specific number of hours volunteering in community service events, but NONE required student to invest time in career planning.

If students were required their freshman year to follow a curriculum that includes networking with alumni, researching industries, companies and jobs, and building their job search strategies, they would more likely have had internships and jobs lined up by graduation day.  That’s why we developed CareerPlan, an online program that provides a methodology students can follow which includes online career course, presentations by career experts, webinars and resources.

3)  The government needs to provide tax incentives to firms hiring grads.

We have our third child in college and I’ve been very thankful for the American Opportunity Tax Credit as it offers $2,500 credit for sending our daughter to college.   When a student is sitting home on the couch, he or she is not earning a salary that could be taxed.  Further the grad is holding off on purchases that would result in sales tax collected by states.    Not having a job is also depressing the economy because parents are probably funneling money to help their grads pay for entertainment, money that could have found its way in purchases, family vacations or splurges on new household items.

So why can’t state and federal governments come together and offer a $5,000 package to companies who hire grads within 30 days of graduation?     I’m no tax expert but let’s assume the student’s $3,000 salary had a 10 percent federal tax assessment and another 7 percent for state taxes.    In 8 months, the government would have earned the $2,500 tax credit from the student.  The state would recoup the money by the end of the year.

4)  Parents need to keep their students focused on careers.

Assuming the college can’t require students to invest time in their careers, the next option is to get parents to require their sons or daughters to take ownership in their careers.   Parents have for decades assumed the college was investing time in their sons or daughters and giving them the skills they needed to get jobs.   As you know that’s not the case.

With so much time and money invested in their students, parents are natural partners to engage and take some of the responsibility of getting their kids nudged in the right directions.   We created the CareerParents Online Community to help colleges do that.  The program provides a branded website where parents can download a copy of the book, The Employed Grad, Knowledge, Skills and Information Your Grad Needs To Get a Job, as well as related videos, webinars and even a discussion area.   We believe this is the fastest way to bring institutional change and set the stage for grads who are focused on having a job by graduation day.

5)  The alumni association needs to actively connect students and alumni.

This whole situation could be eliminated if alumni stepped up to the plate and agreed to hire a student in their firm and colleges offered the firm $2,500 to hire the grad.   Assuming 200 out of the 500 grads are hired by alumni this way, the college would be committing $500,000 a year to the project.   This effort would go a long way to show recent grads that the college is committed to helping them get jobs after they graduate.  It’s also a great recruiting tool.

Let’s assume you don’t like that idea and you take another direction.  I’m going to assume you have 40,000 alumni if you are graduating 500 students a year.   Development officers talk about how alumni give of their Time, Treasure or Talents.   In this case we are we’d reach out to alumni to use their talents.    In a previous article I mentioned reaching out to alumni in the spring with a Mentoring Campaign.  The idea is to use the annual giving calling team to call alumni to ask them to mentor students.  The team would call alumni and get a commitment from the caller and then match them with a student.  The campaign would be designed to match every freshman student with a mentor.   During that call you could also ask them to help a grad get a job.   They could be matched with a senior with the same major or interests.

Conclusion

So we talked about 5 ways to reduce the number of months it takes a grad to find a job.  Each individually could help–collectively all four, plus other initiatives you are thinking about, will vastly decrease the time it takes a grad to get a job after he or she graduate.

In the end, everyone wins!

  1. Students get jobs, and pay off their loans quicker.
  2. States keep students working in their state, paying taxes.
  3. Businesses increase revenue from more money flowing.
  4. Colleges will increase enrollment because parents will want their kids to go to colleges committed to help with employment.

Let’s decrease the time it takes for a grad to get a job.  Help us increase awareness by sharing this post with others.

 

 

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Don Philabaum
Love to find ways to use technology help more grads and alumni develop successful career strategies.
Don Philabaum
Don Philabaum
Don Philabaum

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