By Lauren Weber and Melissa Korn
Entry-level work isn't what it used to be.
Companies bruised by the recession have stayed lean by
automating and outsourcing core functions while slashing training
budgets and payrolls. But in an effort to cut costs, some firms
have also cut entry-level jobs that serve as a crucial first step
on the path to a professional career. And others have made the
responsibilities for first-timers more sophisticated, raising the
bar for new graduates, who are expected to arrive job-ready from
day one.
These developments may be making it more difficult for some
young adults to gain a foothold in the labor market, economists
say. The unemployment rate for 20- to 24-year-olds is falling as
the economy recovers, but remains at a historically high 11.3% as
of July, with young adults lacking college degrees having an
especially hard time finding entry-level jobs.
Managers at State Street Corp. are currently grappling with a
transformation in the company's entry-level roles.
Four years ago, the Boston-based bank began an overhaul of its
technology systems to cut costs and streamline operations. Now, as
the project nears its end, the company is assessing how to employ
fund accountants when some of their main assignments--such as
calculating funds' net asset values--have been automated, said
executive vice president Kathy Horgan, who oversees talent
management at State Street.
The job titles are the same, but the responsibilities have
shifted significantly from what was done a few years ago. Instead
of memorizing 15 or 20 steps in a calculation process, fund
accountants at the bank must now be able to identify anomalies,
help resolve software glitches, and figure out which other teams
they should work with. In some cases, they must also call clients
directly, Ms. Horgan said, putting a new premium on people
skills.
Managers began to ask, "What's the new entry-level job?" Ms.
Horgan recalled.
So the bank's HR team, with input from front-line managers, is
supplementing traditional job descriptions with more detailed "role
charters" for entry-level jobs, emphasizing more abstract and
sophisticated skills such as collaboration and problem-solving
rather than basic functions like report preparation.
"Tasks are changing more rapidly than they ever have in the
past," Ms. Horgan said. As a result, "The career path [for young
people] is changing as we speak."
The government doesn't break out data for "entry-level
jobs"--the category is tough to track since it varies across
industries and employers, and changes as new skills and jobs appear
in the labor market--but economic studies show that employers,
spoiled for candidates over the past few years, have been raising
their experience requirements for what might be considered
entry-level work.
The number of recruiters requesting two or more years of work
experience for some middle-skill occupations rose by as much as 30%
from 2007 to 2010, according to a paper by economists at Harvard
University and the Federal Reserve Bank.
The slack labor market during that time offered a natural
experiment, said one of the authors, Alicia Sasser Modestino,
formerly at the Federal Reserve Bank of Boston and recently named a
professor at Northeastern University. "Employers had carte blanche"
to choose the most skilled applicants from a pool stocked with
candidates, she said. Newly minted graduates with associate's or
bachelor's degrees were forced to get experience elsewhere, such as
internships, or stretch their skills to find more demanding
jobs.
The next few years will reveal whether a more worker-friendly
job market forces companies to reduce those requirements, said Ms.
Sasser Modestino.
As some entry-level positions are transformed or fall away,
others emerge. The job of social media manager, a possible entree
into the fields of media or marketing, didn't exist five years ago.
Now, more than 18,000 such positions are open, according to job
board Indeed, and thousands more workers currently serve in the
role. And entry-level jobs in computer systems and public relations
are expected to grow over the next decade.
Still, a sampling of Bureau of Labor Statistics data suggests
that demand for bottom-rung professional positions, such as loan
officers, insurance underwriters and credit analysts, lagged behind
that of the overall job market in the period from 2003 to 2013 and
is expected to remain stunted, or even shrink, in the coming
decade.
Brian Hamilton, chairman and co-founder at financial information
firm Sageworks Inc., said clients such as accounting and financial
services companies require 30% fewer man-hours to complete
valuation calculations when using the firm's financial
statement-analysis software.
As a result, people once expected to input data and run basic
calculations--workers with titles like credit analyst at banks or
in lower-level accounting roles--are now being asked to manipulate
and analyze the data. "Everyone gets pushed up the food chain," Mr.
Hamilton said.
Or, put another way, entry-level workers are now being assigned
"thinking" roles, as opposed to "just following a checklist," said
David Vogel, who manages the undergraduate career development
office at the University of North Carolina's Kenan-Flagler Business
School. "It raises the bar on the types of work that can be done by
the entry-level hire, as opposed to eliminating the need."
At the same time, workforce experts see a parallel dynamic where
employers are reducing training budgets. The result is that
companies want workers to arrive job-ready, with both soft and hard
skills.
For example, training programs for sales jobs at major
corporations regularly lasted two years in the 2000s, teaching the
ins and outs of the products they were selling and explaining
market trends for distributors and end users. Now, new hires would
be lucky to get six months of ramp-up time, said Andrea Dixon,
executive director of Baylor University's Center for Professional
Selling, which prepares students for sales careers at companies
like Humana Inc., Oracle Corp. and 3M Co.
Ms. Dixon tells of one former student who, within 18 months of
joining a Fortune 100 chemical company, was running $35 million
worth of accounts. A decade ago, she said, a territory that big
would be handled by a 40-something, not a 23-year-old.
At Deloitte Consulting LLP, new hires still receive intensive
training, but they are expected to arrive with the communication
skills and business acumen to sit in client meetings from the
start. A decade ago, managers took the approach that "we can teach
you everything you need to know," said Jim Hagy, a director in the
human capital practice. But today, "what we need is people who can
immediately get in front of clients. They're not going to sit in a
back office anymore."
Such high expectations for low-level workers mean early
experience is crucial.
Marissa Onsager, who graduated in May from Kenan-Flagler, spent
last summer interning in the sales department at General Mills Inc.
Her experience there culminated in delivering a full presentation
to a representative from a large supermarket chain that was seeking
more insight on minority shoppers' purchasing patterns.
"It felt a little weird because I was so much younger than the
customer, " said Ms. Onsager, now 22. "But at the same time, I was
the expert."
Later this month, Ms. Onsager will start as a business analyst
in Deloitte's Charlotte office.
"The intern has become the new entry-level hire," said Eileen
McGarry, executive director of career services and student
engagement at the University of Arizona.
Write to Lauren Weber at lauren.weber@wsj.com and Melissa Korn
at melissa.korn@wsj.com
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