Great Expectations Move Into A Bleak House

by Dan Coates, May 15, 2009, 12:15 PM

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Entering the toughest job market in the past 25 years, Gen Y finds the future's not so bright, resulting in the kind of anxiety that even Eli Lilly can't tame. Surveys of current college students conducted this spring provide increasing evidence that, as we transition away from plenty, members of Gen Y feel ill-equipped to deal with scarcity.

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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0 comments on "Great Expectations Move Into A Bleak House ".

1. Suzie Shore
   

   commented on: May 15, 2009 at 12:52 p.m.

   Very fascinating insight. I wonder if the 'less materialistic' tendencies will endure long-term, or if that will be short-lived. I guess that will be be determined by how long the recession lasts, to an extent. It will be really interesting to see how this impacts consumerism in the coming years. Great article.

2. Elyse Rossler from mobileStorm Inc.
   

   commented on: May 15, 2009 at 12:57 p.m.

   Excellent insight.

3. Jason Bakker from Campus Media Group
   

   commented on: May 15, 2009 at 1:20 p.m.

   Thanks for info on workplace loyalty. That's a good nugget of info for HR folks to have.

4. Jim Carroll from Small Business Development Center of Hampton Roads, Inc
   

   commented on: May 15, 2009 at 1:35 p.m.

   Interesting insight into the challenges facing college graduates and how it will impact the manner in which they will respond to marketing efforts.

5. Kent Stones from Callahan Creek
   

   commented on: May 15, 2009 at 5:04 p.m.

   I see this more as younger individuals' expectations being reset to realistic levels. With this recession many pundits describe households as denying themselves or being in a state of scarcity. The reality is that our personal economics got out of whack, for any number of reasons. Our consumptive behavior prior to the recession was not normal or constructive and should not be the benchmark to which we compare ourselves.

   I believe our society and financial markets are re-calibrating to reflect a more appropriate level of consumption and financial obligation (debt). Part of this, I feel, is reflected in the answers of the young individuals now entering the workforce who answered this survey. I do have to disagree, though, with the characterizations about salary. While they are flat, I don't see them as "far below the lofty starting salaries offered to graduates over the past decade." Comparing professions across time, they are flat or slightly down and as one would expect, graduates are orienting toward where more stable jobs are. I can't imagine that very many people are considering working on Wall Street right now - regardless of their age.

   Interesting information.

6. Carol Phillips from BrandAmplitude, LLC
   

   commented on: May 22, 2009 at 12:47 p.m.

   Dan: Terrific insights based on hard data. Very timely, too. I just wish I had seen this before I posted to my blog on similar topic last night, "What Millennials Want From a Job (It's not what you think)" !http://millennialmarketing.blogspot.com

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