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Economy Not Deterring Employers From College Recruiting Plans

Good news for spring grads.

Despite signs of a steadily weakening economy, a new survey by global outplacement consultancy Challenger, Gray & Christmas, Inc. found that many employers have not altered plans to hire spring college graduates. In fact, several college career counselors interviewed by Challenger researchers suggested that college graduates will actually benefit from the downturn.

Only 12 percent companies have downgraded their college recruiting strategies and expect to hire fewer graduates than originally planned, according to the survey, conducted among 100 human resources executives the week of February 18. The survey also found that less than 3 percent of employers have cancelled campus recruiting visits or plans to attend job fairs.

"This should relieve some of the anxiety undoubtedly being felt by many college students, who are bombarded with news of the economy's slide toward recession every time they turn on the news or surf the Internet," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

When asked about their original college recruiting objectives established several months ago, about 46 percent of respondents said their companies planned to hire the same number of graduates as a year ago. Twenty-two percent planned to hire more graduates, while 33 percent planned to hire fewer.

Among the companies planning the same or increased recruitment of college graduates, 64 percent said they are proceeding with their original plans. Nearly 14 percent said they now expect to hire more than originally planned.

"Many of the companies needing fewer college graduates than originally thought were companies that were already planning to hire fewer graduates than a year ago. For these companies, it is clear that their situation has gone from bad to worse, with some abandoning college recruiting entirely," said Challenger.

"However, for many companies, the downturn does not seem to have impacted their recruiting strategies. There are probably a couple of reasons for this. First, it is still too early to tell how widespread this downturn will be. At the moment, it is still heavily concentrated in housing and financial sectors.

"The other factor helping sustain college grad recruitment is the fact that, regardless of the current economic situation, companies across the country are facing significant worker shortages as aging baby boomers reach retirement age and start leaving the workforce. Forward-thinking companies are taking steps now to establish a foundation for the future," said Challenger.

Interviews with college career counselors confirmed the survey's findings.

"We are not graduating enough students to replace retiring baby boomers," said Steve Schroeder, director of the business career center at the University of Wisconsin - Madison Business School, which is seeing a record number of companies participate in career fairs.

Schroeder pointed out that even as companies eliminate workers at higher levels of the organization, they are often adding people at the entry level.

"These companies need good talent now more than anything. They are getting good, young talent for a fraction of what they are paying an older worker who has been with the company for 10 years," he said.

In a similar vein, Tom Halasz, the associate director of the Career Resource Center at the University of Florida, said that current attrition levels suggest that college recruiting will remain strong as companies seek to replace employees leaving for other job opportunities, retirement or to raise a family.

According to Halasz, the only areas that have experienced a slowdown in recruiting at University of Florida are construction and financial. Even these areas are not entirely void of opportunities.

"Instead of receiving 8 to 10 job offers, seniors in our construction management program are receiving 3 to 4 offers. So, we are still very optimistic about this year in terms of recruitment," said Halasz.

However, several career center representatives, including Halasz, said that campus recruiting tends to lag economic activity by several months, suggesting that it could be the class of 2008-2009 that experiences the impact of the downturn.

"Of course, the job market for next year's graduates will depend on how long this slowdown lasts and how deep it sinks. There is a good chance that the economy could be rebounding before classes start in the fall," said Challenger.

"The 2001 recession was particularly hard on freshly minted college graduates, many of whom entered college four years earlier with aspirations of joining the burgeoning 'dot.com' phenomenon. Of course, instead of enjoying five-figure signing bonuses, many graduates had early job offers rescinded," recalled Challenger.

The risk of job offers being rescinded this year appears minimal, according to conversations with college career center directors, none of whom had heard of any job offers being rescinded so far this year.

"Some companies may delay extending early job offers this year to see how the economy progresses. They do not want to get caught in a position where they would have to rescind an offer. Many companies undoubtedly recall how embarrassing that was in 2001 and do not want to repeat the mistake," said Challenger, who noted that about 50 percent of the survey respondents said they would never rescind a job offer.

"The next couple of months will provide a lot more answers about the direction of the economy and the job market. At the moment, college graduates look safe, but those who don't have jobs waiting for them upon graduation could find themselves stuck in a prolonged state of joblessness," said Challenger.

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