This afternoon my son Josh graduated from the College of the Atlantic in Bar Harbor, Maine. Here's what his generation is facing:
Nearly all (95%) of current college students feel that the economy will have an impact on their careers, and seven out of ten undergrads (71%) expect to extend their academic careers with a master's, doctoral or professional degree as a way to avoid the current job market. With colleges bursting at the seams to welcome the largest freshman class in American history, there's little chance that the resources of U.S. academic institutions (or their parents' financial resources, for that matter) will allow them to dodge the economy indefinitely.
Rather than looking to land a job on Wall Street, current college students are looking for careers within education and healthcare, areas targeted by the largesse of the Obama administration. Non-profit, legal and accounting round out the top-five targets for college students expecting to enter the workforce.
After idolizing the achievements of wunderkinds like Mark Zuckerberg, Chad Hurley and Steve Chen, current college students are not looking for an entrepreneurial solution to the current malaise. While slightly less than three quarters of current college students anticipate starting a business at some point in the future, only one in five (20%) feel that they are very (6%) or somewhat (14%) likely to do so upon graduation. In contrast to the get-rich-quick schemes that pervade boom-times, most collegians (56%) expect to retire in their 60's and nearly one in five (17%) expect to retire in their 70's.
High hopes are deflating to the kind of modesty that is unbecoming of the entitlement generation. More than two out of five (43%) of college students expect a starting salary of less than $45,000 with an average starting salary expectation of $52,400 across all college students, far below the lofty starting salaries offered to graduates over the past decade.
Whether caused by dimmer prospects or a shunning of material desires, college students are shifting away from financial compensation as a career motivator. Less materialistic concepts such as "personal satisfaction" (mentioned by 43% of collegians) and "experience gained" (mentioned by 22%) are seen as more important than "money," which is the third-most mentioned motivator (mentioned by 16%).
In a surprising turnaround from the past two decades, workplace loyalty is a resurging theme among collegians, with three out of five (61%) expecting to stay at the company within which they initially work for a period of five years and half (51%) expecting to stay for a period of ten years.
These trends will have a long-lasting impact on Gen Y. Lisa Kahn, a Yale School of Management economist, has studied the National Longitudinal Survey of Youth conducted by the Bureau of Labor Statistics and finds that the damage done by entering the workplace during a downturn will last 15 years past graduation day. What begins as a 7%-8% reduction in starting salary persists, maintaining a 4%-5% pay disparity 12 years later.
While the full impact on the Gen Y generation will have much to do with when and how the economy recovers, marketers accustomed to the rich and easy Gen Y target will find that they need to work a little harder to understand how and where their products will find fertile ground among a generation that is rethinking many of their core values.
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