Each year, Accenture Strategy conducts a survey consisting of current college seniors and the prior two years of college graduates. The survey size is approximately 2,000 students split 1,000 from each group. It is a great insight into the picture of college expectations versus reality. The survey covers a series of topics such as job placement in college major, preferred employment company size, starting salary, formal training programs after graduation, and other interesting topics. Here is the link to the 2016 Accenture Strategy US College Graduate Employment Study.
In the past, we briefly pointed out new trends or changes that the study would identify. Since the study has been done for over four years, we wanted to do a more in depth analysis of college graduate trends. As college cost and student debt continues to rise, more students and parents are trying to find the best value. The EFC PLUS College Cost Analyzer helps families better forecast the financial outcomes of a college education. To get a positive college outcome, there is also a series of academic decisions that need to be part of the college experience. The Accenture Strategy Study helps identify where better decisions can be made.
Two specific points surveyed is the number of college graduates that have jobs at graduation and the number of college graduates who feel that they are properly employed. The good news is that more students have a job prior to graduation and that this number has double since 2014. The bad news is the increase in the number of surveyed students who feel that they are underemployed.
This employment picture could be improving due to a variety of reasons. Is it that the economy is better or is it that there are many students settling on their first jobs due to worry over their student debt? Unfortunately, this is unclear based on the current survey. What is clear is that more students are unsatisfied with their initial job selection. According to the 2016 survey, the number of students that feel they are underemployed at graduation is 51% and this number has increased each year since 2014.
Formal Training Programs after Graduation
The transition from the education process to a working career can be overwhelming. Some college majors have a formal practical experience segment as part of the curriculum. The most common is found within the nursing and teaching majors but the majority of majors do not have this formal practical training. As a result, many students are expecting a formal training program to start their career. Based on the survey, many companies no longer offer a formal training program and have an expectation of the student being able to hit the ground running.
Over the past three years, the survey has estimated that approximately 80% of the students expected some type of formal training program while just 50% of the companies have provided it to their newly hired employees. For me, this particular survey really emphasizes understanding the outcome of the college education for the student and how important it is for students to take the proper steps to achieve this goal while they are in college.
Career in College Major
One of the most important items in the survey is the percent of student who are employed in their chosen major. Over the past three year, over 85% of the students expected to get jobs in their fields of study. According to the survey results, that number has averaged only 65%.
These numbers are a little disappointing but there could be a variety of reasons why this difference in expectation and shortfall is so wide. Items such as grades, number of available positions, location and experience could all contribute to these results.
We often tell our children they need to follow their dreams, which I believe is true. There is also a sense of reality that also needs to be discussed since the cost of following that dream is so expensive today.
As Wayne Gretzky, the famous hockey player always said “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” I think as part of our college career planning, we need to include this as part of our dream following discussions.
One of the major reasons for obtaining a college education is to increase the probability of improving your quality of life. Based on the survey, these numbers could be somewhat disappointing.
Over the past three years, the expectation of making more than $25,000 initially out of college is approximately 80%, yet the reality of achieving that goal is half of that number. The current survey results shows only about 40% will make more than $25,000 with their first career position.
To complicate matters, many graduates have student loans that need to be paid. This can impact a student’s financial independence and future depending on the debt. Student debt is not understood or explained properly. The access to student loans is fairly easy in comparison to other loans. Better information needs to be provided to both students and families as they go through this process so they can see the financial outcome.
Another interesting fact is more student want to work for a smaller company rather than a larger company. This has been a growing trend of the past few years.
Each year, we review the Accenture Strategy survey since it gives us an insight on the college outcomes. Our goal is to help students and parents better plan and envision the financial outcome of a college education. The college funding process is extremely complicated and requires a series of financial decisions that need to be better understood. For many parents this is the largest investment they will make in their lifetime. We hope this information will help both students and parents make better financial decision as they navigate through the college funding and financial aid process. Our newsletter, webinars and software solutions are additional steps available that can guide families through these important decisions.