In a recent post, Five Action Items to Address the Talent Paradox, we observed that junior talent − 22–27-year-old college graduates holding at least a Bachelor's degree − are one of three under-utilized talent pools that can be mined to fill widening skills, talent and knowledge continuity gaps in U.S. corporations. These efforts are essential to closing the skills gap and to addressing persistent college graduate underemployment in many markets.
A recent analysis by the Federal Reserve Bank of New York (http://www.newyorkfed.org/research/current_issues/ci20-1.pdf) finds that the unemployment rate for recent college graduates peaked at 7% after the Great Recession of 2008–2009 compared to 5% for the total pool of college graduates. While the Fed report contends that underemployment is not historically unusual among recent college grads, it does conclude that it has become more difficult over the past decade for recent college graduates to find jobs that utilize their degrees. The percent of underemployed college graduates working in good non-college jobs (skilled roles paying an average of $45K/year) has fallen sharply, while the percent working in low-wage jobs (e.g., bartender, food server, or cashier) paying below $25K/year has risen since 2000.
There are other recent studies suggesting that underemployment among recent college graduates stems from a fundamental oversupply of college graduates compared to the number of jobs being created that require cognitive skills, which are often associated with higher education. For example, a paper titled, Why are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities released last year by the Center for College Affordability and Productivity argues that:
"The proportion of the workforce with college degrees has grown far faster than the proportion needing those degrees in order to fulfill the needs of their jobs, forcing a growing number of college graduates to take jobs which historically have been filled by those with lower levels of educational attainments."
That paper goes on to argue that:
"No doubt, slow increases or actual decreases in employment have aggravated an already-existing phenomenon of underemployment for college graduates, but any thought that this is a temporary problem related to the business cycle is wishful thinking."
A dangerous consequence of chronic underemployment among recent college graduates is that it forces lower-skilled workers into even lower-paying jobs and/or squeezes them out of the workforce altogether, which is a powerful negative for longer-term consumer spending and, by extension, economic growth prospects for the U.S.
Reports and articles detailing underemployment of college graduates in the U.S. are not always easy to reconcile with frequent stories and reports of talent gaps and “wars for talent,” which are widely expected to continue escalating worldwide over the coming decade. In 2009, 2011 and 2013 Lloyds of London cited talent shortages among top business risks. Just last week, Harvard Business Review’s Blog Network published Competing for Talent in Every Geography (http://blogs.hbr.org/2014/06/competing-for-talent-in-every-geography/) in which GE’s vice president of executive development and chief learning officer Raghu Krishnamoorthy opines that, in addition to demographic shifts, there are new realities provoking a global war for talent. These new realities include: governments predicating market entry for foreign companies on local job creation, rising competition from “newly prestigious home-grown companies” in emerging economies, difficulties sending ex-pats to new frontiers of business growth (in Africa and Southeast Asia, for example) and wide variability in skill levels from region to region. These dynamics intensify competition to attract and retain talent.
“GE is one of many corporations now confronting these challenges. Operating in more than 170 countries, in multiple businesses that range from financial services to jet engines, and with more than 60% of our workforce based outside the United States, we must compete in every geography and get it right. Clearly, a multimodal talent strategy is required.”
Other research suggests there are fundamental large gaps opening between what corporations need in terms of talent and skills and what students are learning in school. For example, a recent article from Education Week/Digital Directions, Computer Coding Lessons Expanding for K-12 Students (http://www.edweek.org/dd/articles/2013/06/12/03game-coding.h06.html), notes that “1.4 million jobs in the computer field, including coding, engineering, and data mining, will be available in the United States by 2020, but there will be only 400,000 college students majoring in computer sciences.” This highlights a growing computer science job shortage that educators and employers must address together.
This growing gap raises questions regarding disconnections between our education system, Corporate America and the guidance being offered to high school, college and potential post-graduate students, and underscores the importance of closing the skills gap. Aligning education, workforce guidance, and employer strategies—particularly through the strategic development of junior talent—is essential to close skills gaps and ensure knowledge continuity.
Answer: Junior talent refers to 22–27-year-old college graduates holding at least a Bachelor’s degree. The article highlights this group as an under-utilized pool that, with strategic development, can help U.S. companies close widening skills gaps and ensure knowledge continuity. Investing in junior talent simultaneously addresses employers’ growing need for specific skills and helps reduce persistent underemployment among recent graduates.
Answer: The paradox stems from a mismatch between what education systems produce and what businesses need. While many graduates struggle to find degree-requisite roles, employers face shortages in specific, in-demand skills and geographies. Global dynamics—such as governments tying market access to local hiring, rising competition from strong local companies in emerging markets, challenges deploying expatriates, and uneven regional skill levels—intensify competition for the right talent. As a result, shortages can grow even as overall graduate underemployment persists.
Answer: A New York Fed analysis shows that although the unemployment rate for recent graduates peaked at 7% post–Great Recession (versus 5% for all college graduates), it has become harder for new grads to secure roles that utilize their degrees. Since 2000, fewer underemployed grads hold “good non-college jobs” (skilled roles averaging $45K/year), and more are in low-wage jobs under $25K/year. Complementing this, research from the Center for College Affordability and Productivity argues that the supply of degree holders has outpaced the growth of roles requiring those degrees—indicating a long-run, not merely cyclical, underemployment challenge.
Answer: Persistent underemployment among college graduates can displace lower-skilled workers into even lower-paying jobs or out of the workforce altogether. This dynamic depresses wages and weakens consumer spending, posing longer-term risks to U.S. economic growth.
Answer: Computer and data-related fields stand out: by 2020, an estimated 1.4 million U.S. computing jobs were projected versus only about 400,000 computer science majors. Closing such gaps requires better alignment among education providers, career guidance, and employer strategies—especially through the strategic development of junior talent. Doing so helps match learning pathways with market demand, supports regional skill needs, and sustains organizational knowledge over time.