Job Market Welcomes Class Of '05

December 6, 2004
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EAST LANSING — College graduates will find an improved labor market when they begin searching for work after completing their studies.

That, at least, is the conclusion MichiganStateUniversity draws from the data in a survey it recently conducted.

According to the MSU survey, overall hiring in 2005 will expand by about 20 percent over this year.

According to Phil Gardner, director of the university’s College Employment Research Institute, 2005 will bring about the first true expansion of the labor market in four years for college graduates.

The primary driver behind the hiring increase is a pent-up demand for workers by employers who have held off adding jobs during the last few years, Gardner said.

“We’ve got some people out there who just have not hired a lot in the last three or four years and they’re beginning to develop some significant gaps in the human resource capital and they just need to hire,” he said.

“This is a godsend, because we’ve just had some terrible markets since January 2001. We’re having some real, sustained expansion of opportunities.”

The biggest hiring gains for graduates with bachelor’s degrees will be for business and biological/physical science majors. Other majors will see a modest increase over last year in the demand for their skills.

Economic sectors reporting the largest gains in projected hiring are transportation, retail, wholesale, professional services, entertainment and health care.

The weakest ratings from the survey were in the utilities, educational services, finance, insurance and real estate sectors.

Large employers — defined as those with 4,500 or more employees — will do the most hiring and had the most positive job outlook in the survey, collectively forecasting a 63 percent increase in hiring.

Beyond pent-up demand, the improved job outlook for college graduates reflects an improving economy, even in the industrial Midwest and in Michigan, which have lagged the rest of the nation in job creation.

Efficiency gains that have slowed job growth the last few years will no longer be able to offset a growing need for additional staffing, Gardner said.

“If you’re going to expand, you’re going to need some people,” he said.

“This year it worked out, and hopefully we can catch up and get some momentum in our part of the world.”

A subsequent economic outlook for employers in Michigan projects job creation over the next two years in the wake of four years of losses.

The University of Michigan economic outlook projects that the economy will create 130,000 new jobs in the state during 2005 and 2006, with more than half of them coming in the service sectors.

The expected growth in hiring also comes with a pay boost for entry-level positions.

Employers responding to the Employment Research Institute’s annual survey indicated they would increase starting salaries a modest 3 percent for graduates.

Gardner bases the MSU employment outlook for college graduates upon hiring figures provided by nearly 500 employers that responded to this year’s survey.

He said the survey showed hiring the strongest in the mid-Atlantic and Southeast, with more modest gains in the Midwest         

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