Brighter Job Prospects for College Graduates
2017 is shaping up to be a very good year for those looking for new finance graduate jobs. With the Global Financial Crisis of 2008 getting smaller and smaller in the rear view mirror, companies are increasingly confident about their future. One way they are expressing this is through new hires.
According to a survey by CareerBuilder, 74% of employers say they plan to hire recent college graduates.1 This an improvement from last year’s 67% and is the highest number since 2007.2
And it gets even better. Among those hiring recent college graduates, 39% plan to offer starting salaries of at least $50,000, up from just 27% last year.3 As you can see, today’s candidates have leverage with negotiating with potential employers-the first time in years.
Finance Graduate Jobs for MBAs
It’s not just undergraduates who are benefitting from this job market-a wide array of companies are targeting newly-minted MBAs (Masters of Business Administration). The job outlook might even be brighter for these professionals.
According to a survey by the Graduate Management Admission Council (the organization that administers the GMAT exam), an overwhelming 86% of employers plan on hiring an MBA graduate this year.4
So, is this really the best job market for recent graduates in over a decade? It seems that if you are in business or finance, the answer is yes.
Here is a list of the top 5 industries by demand according to CareerBuilder’s survey:5
- Business (30%)
- Engineering (26%)
- Computer and Information Sciences (23%)
- Engineering Technologies (16%)
- Computer Technologies (13%)
Here is a look at a few specific finance graduate jobs that provide employment opportunities for new financial professionals.
Finance Graduate Jobs: Financial Advisors
One way for new graduates to get their feet wet in business is to target private wealth management as a financial advisor. According to CareerCast, qualified financial advisors are some of the hardest positions to fill.6
This is somewhat surprising since financial advisors are very well paid, boasting a median salary of $89,160.7
This shortage can be partly attributed to enormous demand for their services. The financial planning industry is projected to see a staggering 30% growth over the next eight years, driven in part by demographics (baby boomers retiring).8
These millions of individuals need help formulating investment plans and determining the right asset allocation mix. While some retirees enjoy a corporate or government pension, the vast majority bear the investment risk themselves.
Complexity is another driver. In addition to the investment requirements, there are a number of ancillary concerns for retirees. These include tax strategies, insurance needs, philanthropy and estate planning considerations.
Without these credentials, aspiring advisors typically join as entry level professionals until they can build up their own client list.
The Professional and Business Services Gold Mine
The Professional and Business Services sector make up over 20 million jobs in the U.S. (14% of all the non-farm jobs).9 This category includes investment consulting, management consulting, marketing and accounting positions.
Phil Gardner, Director of Collegiate Employment Research Institute at Michigan State called these sectors “a gold mine for college jobs”.10
Employers surveyed are expected to hire 19% more candidates than last year to fill these slots. As long as the economy stays strong, these outsourced services will remain in demand.
Finance Graduate Jobs: Insurance Agents
Gardner’s survey also revealed the Finance and Insurance sector is expected to see a 39% increase in hiring expectations over the last year.11
Insurance agents sell products and policies that are used by nearly everyone in the U.S. Life, health, and long-term care insurance (plus umbrella coverage for higher net worth individuals) and are just some of the products these financial professionals offer.
With interest rates remaining historically low, there is a dire need for higher income for retirees living on a fixed budget.
A number of insurance products including immediate and income annuities can provide retirees a steady income stream for life.
This is extremely appealing to many Baby Boomers who may be underprepared for retirement. In addition, there are a number of riders that may be added to these policies which address some estate planning issues and legacy planning concerns.
There is some overlap between insurance and finance- an increasing number of financial advisors are becoming dual-licensed to sell both investment securities and certain insurance products.
For example, variable annuities are considered investment securities and thus must be offered by a licensed financial planner.
Finally, another insurance area that is booming is pension risk transfers.
With pension deficits ballooning, coupled with unrealistic investment return assumptions, we don’t expect this trend to change anytime soon.
Subsequently, pension funds are increasingly transferring the future benefit obligations to insurance companies such as Prudential.
Buy Side Hiring and Layoffs
This trend could portend some softness in buy side hiring in the near future. Harvard Management Company, a non-profit organization that oversees Harvard’s massive endowment fund, recently announced it is laying off roughly half of its staff.
To land at these financial institutions, an MBA is paramount, especially if you don’t have an undergrad degree from a Top 20 school.
MBA Graduates Offer More
The skills that these graduates often bring to the table include real world experience, the ability to work in groups and more advanced business knowledge.
Also, the Michigan State study revealed that employers value the exposure today’s MBAs have with Data Science or Data Analysis electives.12
The rise of Big Data has made familiarity with these topics a necessity for today’s business professionals.
Recent graduates coming from the top business schools are still drawn to the traditional destinations such as management consulting and investment banking.
But an increasing number of MBAs are being recruited by technology companies such as Amazon and Microsoft.
MBA’s broader business education helps them oversee the fantastic technology projects the engineers and programmers are building. Equally important is keeping the project within budget, a concern Google is currently wrestling with.
Equally important is keeping the project within budget, a concern Google is currently wrestling with.
So recent graduates should enjoy today’s strong job market and rejoice in the amount of finance graduate jobs available. And try not to listen to the critics who point to a lack of real wage growth. Adjusted for inflation, today’s wages still have not surpassed the year 2000’s level-guess you can’t win them all.