?Job growth among people ages 20 to 24 is expected to be 25 percent lower this year compared with 2022. Hiring in May 2023 is forecast to grow at a slightly lower rate than last year, as well, according to a report from Gusto, a San Francisco-based HR and payroll platform.
However, there are “pockets of opportunities” where full-time hiring is predicted to increase in industries and geographic areas new graduates may not have considered.
Unexpected jobs could include e-commerce managers in the food and beverage industry and software engineers in retail firms as businesses expand in new ways post-pandemic.
“A lot of these grads with software development degrees are going to look for a job in the tech industry or consulting firms—traditional paths after college—and may not look to food and beverage firms or in the retail industry for their first job out of college,” said Gusto economist Luke Pardue. He is an Economic Policy Fellow at Aspen Economic Strategy Group in Washington, D.C., and holds a doctorate in workplace trends research.
Industries such as retail and food and beverage “have undergone such a large technological change since the pandemic,” he pointed out.
“So much of their [companies’] presence depends on being online, and these new young graduates have the skills to help them out.”
Industries with the highest forecasted increase in full-time hiring of 20- to 24-year-old job seekers:
| Industry | Job Growth, May 2022 |
Job Growth, May 2023 (Forecast) |
Percentage Point Change in Hiring |
| Food & Beverage | 5.3% | 9.6% | + 4.3 |
| Retail | 5.2% | 7.7% | + 2.5 |
| Education | 6.1% | 7.2% | + 1.1 |
| Accounting | 1.9% | 2.4% | + 0.5 |
| Health Care & Social Assistance | 5.8% | 5.9% | + 0.1 |
| Source: Gusto. |
Gusto’s forecasts of overall and industry-level employment growth rates are based on the hiring rates of the prior two months and monthly seasonal patterns. The forecasts for 2023 are based on monthly data from January 2019 to March 2023, using data from more than 300,000 small and midsize businesses that are on Gusto’s platform. It tracked industries and cities where new graduates are most likely to find jobs this year and where they can expect to earn the highest salaries, adjusted for cost of living.
Best Cities and Salaries for New Grads
Cities with the highest hiring rates.
San Jose, Calif., tops the list of U.S. metropolitan areas with the highest hiring rate of new college graduates, increasing 9.8 percent from April 2022 to April 2023.
It was followed by:
- Houston (8.5 percent increase).
- Dallas (8.2 percent increase).
- Nashville (8.1 percent increase).
- New York City (8.0 percent increase).
- Philadelphia, Miami and Boston (each 7.9 percent increase).
- Austin and Atlanta (each 7.8 percent increase).
Highest salaries for new graduates.
Gusto used the Cost of Living Index from The Council for Community and Economic Research to determine where a new graduate’s paycheck stretched the furthest among the top 10 fastest-hiring cities.
“San Jose is the only city where new grads can expect to earn six figures,” Pardue said, noting an average starting salary of $102,000 for individuals working in software and technical roles. The city is seeing a lot of growth in high-tech manufacturing, in large part because of the growth in the semiconductor industry there, he explained. California also is a state with many small and midsize businesses, he pointed out, something new job seekers should keep in mind as larger tech firms cut their staffs.
The average salary in San Jose for a full-time tech manufacturing employee ages 20 to 24 is $98,500. However, grads should consider the cost of living when evaluating the starting salary. In San Jose, a $102,000 salary “feels more like $60,000 to $70,000,” Pardue said.
The cost of living in Houston is 8 percent lower than the national average, making the $60,000 average starting salary in management, scientific, and technical consulting services there “feel like $65,000 when compared to the national average,” according to the report.
New York City appears the least affordable city on Gusto’s list, with cost of living 127 percent higher than the national average—making a starting salary of $72,000 in software publishing feel like $31,000.
“New grads want some aspect of in-person [interaction],” Pardue said. “They are not necessarily looking for fully remote work, but flexibility is a key area where businesses can compete for these younger workers,” especially in industries looking for workers with specific skills. Among 20- to 24-year-old full-time workers in San Jose, 23 percent are working fully remote schedules. In Houston, 16 percent are doing so.
“Flexibility is the No. 1 thing that these companies can use to attract new talent,” Pardue said. “There’s a lot of talk about the cooling job market and [hiring] power coming back into the employer’s hands, but attracting the right person is still super important,” and flexibility is one of the keys to “attract that perfect candidate.”
New graduates are willing to move for a good role and benefits.
A survey from Handshake, an online recruiting platform for higher education students and alumni, found 67 percent of 1,432 job seekers said they would change cities for the right job—where there were advancement opportunities, the cost of living is lower, or in-person workplace attendance is flexible. The survey was conducted from June 13 to July 6, 2022, with students from the classes of 2022 and 2023.
‘So Much Opportunity’
A March survey of 1,000 U.S. college seniors by recruitment software provider iCIMS found 40 percent were applying to a wider variety of industries to increase their employment chances.
“What this means is we have a group of individuals being realistic about how their skills translate,” Laura Coccaro, iCIMS chief people officer, told SHRM Online. “They’re thinking creatively” about how their skills can transfer beyond their area of study.
Pardue’s No. 1 piece of advice for new graduates: “Don’t be discouraged by the headlines [about layoffs] or initial roadblocks in the job search. There is so much disruption going on but there’s so much opportunity.
“Find the job that is still is the right fit” but remember, he added, that you are “so early in your career, there’s always going to be time to find that perfect job down the line.”
Other SHRM Resources:
Recruiting Generation Z: Find Ways to Stay Visible, SHRM Online, May 2023
New Grads Use ChatGPT in Job Search, SHRM Online, May 2023
