NACE ranks most in-demand majors and lucrative degrees 2011
It may seem that barely a day goes by without the release of another gloomy report on the economy, highlighting an unemployment rate that continues to hover stubbornly close to the double digits.
For college graduates entering this frigid job market, the prospects can be daunting. But a look at the trend lines courtesy of the National Association of Colleges and Employers (NACE) tells a different--and much-improved--story, both by measure of hiring rates for new graduates and starting salaries.
In its most recent seasonal survey, NACE reported that employers are now planning to hire 19.8 percent more new college graduates than they were a year ago.
"The picture painted by this report shows that overall college hiring continues to be encouraging for class of 2011 graduates," NACE wrote in its spring job outlook report. "Employers have upped their original projections made in early fall, and this is the first time this has occurred since 2007, just prior to the economy beginning its slowdown."
And according to NACE's most recent salary survey, new college graduates are earning an average starting salary of $51,018, up 4.8 percent from last year's mark of $48,661. The summer salary survey marks the third consecutive increase in starting pay for new graduates entering the job market. Both NACE's spring and winter surveys revealed salary increases, a welcome turnaround from the year-over-year declines recorded in each of the 2010 reports.
"The steady increases in starting salary offers we're seeing this year is a good indication that the job market for new college graduates is gathering strength," NACE Executive Director Marilyn Mackes said in a statement.
A more favorable corporate hiring climate
Experts point to an array of factors that could account for the turnaround, noting a general macroeconomic improvement that has spurred demand among employers, in turn driving up salaries as the hiring market for new graduates grew more competitive.
"In 2010 the average college graduate had minimal offers if any to consider and therefore employers were able to leverage the economic and labor market situation to their financial advantage," said Diana Fitting, a senior vice president at the U.S. division of Adecco Group, a global staffing firm. "This May with a higher demand for fresh college graduates, salary offers were not deflated as they were in 2010."
Fitting explained that many companies are again beginning to hire to fill entry-level positions that had been left vacant throughout 2010. Alternatively, many companies Adecco works with are looking to bring on new talent as they brace for widespread retirements over the next five years. Still others have been looking to trim labor costs by issuing early-retirement buyout offers for senior employees.
"Part of their strategy to replenish their workforce is with new college graduates," she said.
But that competition for entry-level talent has played out differently in different markets, according to Daniel Greenberg, chief marketing officer at SimplyHired.com. Greenberg noted that the unemployment picture, and the closely related salary scale, can swing widely from one area to another as an indication of the uneven nature of the economic recovery.
"Salary increases are not consistent across all sectors," Greenberg said. "Tight job markets, such as Austin, San Francisco, Boston and Seattle have only two unemployed people for every job opening, hence their wage rates are being bid up. Harder hit markets like Miami, Las Vegas and Los Angeles, which range from six to eight unemployed people for every job opening are experiencing considerably less pressure on salaries."
By the numbers
To be sure, the breakdown of majors reveals an uneven picture of the job prospects new graduates can anticipate. The most in-demand majors, according to NACE's job outlook and excluding a "miscellaneous majors" category, were:
- Engineering, with 63 percent of respondents hiring
- Business, with 61 percent of respondents hiring
- Accounting, with 48 percent of respondents hiring
- Physical Sciences, with 24 percent of respondents hiring
- Economics, with 20 percent of respondents hiring
- Communications, with 19 percent of respondents hiring
- Agriculture, with 9 percent of respondents hiring
- Humanities, with 8 percent of respondents hiring
- Health Sciences, with 3 percent of respondents hiring
- Education, with 2 percent of respondents hiring
NACE reported average starting compensation offers by major as follows:
- Petroleum Engineering: $80,849, up 8.1 percent
- Chemical Engineering: $65,617, no change
- Computer Engineering: $64,499, up 7.6 percent
- Computer Science: $63,402, up 3.7 percent
- Electrical Engineering: $61,021, up 2.8 percent
- Engineering Disciplines (as an umbrella category): $60,465, up 2.5 percent
- Mechanical Engineering: $60,345, up 3.2 percent
- Information Sciences and Systems: $57,499, up 4.4 percent
- Economics: $53,906, up 6 percent
- Finance: $52,351, up 4 percent
- Civil Engineering: $52,069, up less than 1 percent
- Accounting: $49,671, up 2 percent
- Business (as an umbrella category): $48,694, up 3 percent
- Business Administration: $44,825, up 2.2 percent
- Psychology: $40,069, up 23.8 percent
- History: $40,051, up 8.1 percent
- English: $39,611, up 6.6 percent
While those numbers reflect gains across the board, the salary pecking order follows a familiar pattern, with technically-oriented positions at the top, and the humanities bringing up the rear.
"People often major in subjects that they find of interest as first-year college students, but by the time they graduate, the prospects for those majors may not be great," noted Larry Chiagouris, a marketing professor at Pace University and author of the book, "The Secret to Getting a Job After College."
Massaging a major for more money
For graduates who took their degrees in the less lucrative disciplines, Chiagouris recommends that they pursue positions that play to their strengths with companies in hot industries. An education major, for instance, might seek work as a corporate trainer. Or a humanities major might find employment with the communications department of a technology firm.
Of course, if newly matriculating college students can resist the temptation of majoring in one of the "fun, but impractical" disciplines, or at least pick up some instruction or experience in a more practical field along their route to a degree, they'll likely fare better when it comes to the job market.
"Petroleum engineering majors saw an increase in their salaries, but this is a very specific niche in the market. My advice for incoming college students would be to look and see what industries are experiencing this growth and match their skills, interests and values to these options," said Denise Harris, director of career development at Hilbert College.
Both Chiagouris and Harris emphasized the importance of technical skills for students looking to land their first job out of school. Harris noted that many students today are graduating with an almost native understanding of social networking tools, such as Facebook, but often lack a proficiency in basic office productivity applications, such as Microsoft Word and Excel.
Andrea Nierenberg, head of the Nierenberg Group and co-author of the recent book, "Networking for College Students (and Recent Graduates)," who describes most of the young job-seekers she works with as "extremely bright, technological wizards," urges new graduates to augment their degrees with tangible, marketable skills that will resonate with prospective employers.
"Get extra training in sales and communication so that you can be more persuasive in marketing yourself," Nierenberg advised. "Become visible, network and also read as much as you can on business, so that whatever your degree is in, you can blend it in to what your employer needs and how to apply it."