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by Career Guide on Jul 6, 2023 3:45:54 PM
The job market for engineers is stable, but landing one in a difficult economy may take longer and come with long-term earnings loss.
By Jeff O’Heir
Research shows that job seekers entering the workforce during tough economic times face earning losses and other disadvantages that last at least a decade into their careers. As today’s economy struggles for stability, young engineers this spring may be asking themselves the same question: Should I be worried about taking a long-term financial hit or accepting the wrong job upon graduation?
No matter the economic climate, job seekers typically face several concerns when evaluating potential employers and job offers, such as the right fit, location, title, and salary. Many of those worries can be allayed with careful thought and preparation. Young engineers, though, shouldn’t worry too much about landing a job this spring that matches much of their criteria, said Matt Ishler, associate director of career counseling at Pennsylvania State University. The engineering job market has remained strong during his 22-year career as a career counselor. The last two years of economic and hiring turmoil have been no exception.
“I have not seen a downturn in engineering at all,” said Ishler, who helps Penn State students prepare for job interviews, write resumes, and craft cover letters, among other services. “It’s been among the leading areas of opportunity.”
During the last year or so, Ishler has even seen increased demand for civil engineers, possibly due to federal infrastructure programs, as well as mechanical, biological, biomedical, supply chain, and industrial engineers. The U.S. Bureau of Labor Statistics projects stable demand for almost every type of engineer for the next seven years.
Despite the stability of the engineering job market, it’s difficult to predict what will happen to the economy and hiring through the rest of 2023. Some analysts and CEOs foresee a slight recession around the third quarter; others don’t. As the Federal Reserve adjusts interest rates to lower inflation, stock markets tend to suffer. The tech industry has shed close to 200,000 jobs since 2022, yet overall hiring remains strong. Whatever happens, graduates and other job seekers should prepare for uncertainty. Patience and persistence are key attributes to dealing with the turmoil.
“It takes longer for students to secure a job offer during a recession or an economic downturn,” Ishler said. “Another effect I see is increased competition for offers with similar companies in similar positions. There may be fewer overall opportunities for students to pursue. Students sometime make decisions because of the length of time it takes to secure a job and that leads them to work a little outside of their field of engineering. That can certainly affect their wages.”
Two prominent research projects showed that graduating during a recession leads to large initial earnings losses that slowly recede but may not fully disappear, even after a decade. The impact can be significant. About 70 percent of a person’s wage growth occurs during the first 10 years of work, according to the National Bureau of Economic Research (NBER).
An NBER study published in 2006 found that Canadian college graduates (surveyed and researched from 1976 to 1995) who had worked in a variety of disciplines during a recession lead to “large initial earnings losses” of about 9 percent of annual earnings. The loss halved within five years and disappeared about 10 years after graduation. Those “initial shocks” affect their entire career, the researchers wrote. Graduating in a recession leads workers to start at smaller and lower paying firms, and they catch-up by switching jobs more frequently than those who graduate in better times, they added.
In a 2007 paper, Lisa Kahn, a former professor of economics at Yale School of Management and currently a professor of economics at the University of Rochester, focused on the impact the 1980s U.S. recessions had on white-male college graduates. She found an initial wage loss of about 6.5 percent, which fell about a quarter of a percentage point each year after graduation. Even 15 years after graduation, the loss persisted at 2.5%. She concluded, in part, that workers who graduate in bad economies have trouble shifting to better jobs when the economy improves.
Finding the best initial job hinges on a few best practices, which usually center around on a series of conversations. Upcoming graduates will often tell Ishler they need to polish or build upon their college research or another project that will give their resume some wow factor. But first, he’ll tell them to discuss with their career counselors, research leaders, or professors the best one to focus on depending on the job for which they’re applying. Ishler also sees many students who will hold off the search process until things improve. That’s not a good strategy.
“They say I've heard the economy's down, so I'm not going to go to a career fair, I'm not going to put myself out there, I'm not going to try to network,” Ishler said. “This is exactly the time to embrace opportunities for conversation.”
Young engineers should also realize the job search is a long-term game and not to feel rejected if they’re not immediately hired for their dream job.
“You're not going to go to a networking event on campus tonight and meet five company reps and come out of that evening with an offer. But if you come out feeling like you learned a little more about what someone's looking for, and you have a way of following up with them. Those are tools you can use over the next few weeks and months to really speak the language of that employer's values and highlight the characteristics and qualities you've built. You can take those into the work world and apply them from day one.”
Other strategies include expanding the geography of a search, applying to smaller, lesser-known companies, and accepting a bit lower salary in exchange for precious leadership or project opportunities.
“By investing in leadership, project or technical skills, they’re positioning themselves for advancements or career changes that can make up that financial gap later on,” Ishler said.
Jeff O’Heir is an independent writer in Huntington, N.Y.
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