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What do employers think of college graduates?

Updated: Oct 9, 2023

The idea is -- that if getting a good job after you graduate college is a goal, then making your college decisions with this job goal is essential! To help implement the framework and make the best college decision, we suggest apps called College Xoice.

About the author: Jeff Hulett is a career banker, data scientist, behavioral economist, and choice architect. Jeff has held banking and consulting leadership roles at Wells Fargo, Citibank, KPMG, and IBM. Today, Jeff is an executive with the Definitive Companies. He teaches personal finance at James Madison University and provides personal finance seminars. Check out his new book -- Making Choices, Making Money: Your Guide to Making Confident Financial Decisions -- at jeffhulett.com.


Please check out Jeff's YouTube channel for the presentation of this article: What do employers think of college graduates? 


Colleges generally attract employers to recruit their soon-to-be college graduates. Employers are not always the same in their approach to college recruiting. In professional services, for example, there is a “pecking order” that generally ranks firms. The most prestigious firms (like small, boutique law firms, consulting firms, or investment bank) may have a direct relationship with a particular selective college. A selective college like in the Ivy League. Larger professional services firms tend to recruit broader. While the smaller boutique firms may get the “first pick,” the larger firms have an advantage because of the volume of college graduates they hire. For example, large consulting firms like “The Big 4” – which is KPMG, Deloitte, PwC, and EY -- hire a large number of college graduates every year. While these firms may defer the “first pick” to boutique firms, they do hire some very talented graduates.


Also, from a practical standpoint, the U.S.’s selective colleges are too small. Less than 1% of undergraduates are currently enrolled in the most selective colleges. [v] There are not enough selective college undergraduates to move the needle on total employment needs for larger employers. As a former Big 4 Managing Director, I led recruiting at a large university. For me, this was a part-time job, as my primary role was to lead consulting practices. This did give me experience in the global firm approach to professional services college recruiting. This employer’s view section is taken from my firsthand experience. The important point is, because of their size and ability to hire in large volumes, this article considers big firms as representative of the general college hiring perspective. [vi]


The importance of compliance - In general, all firms are very focused on complying with the Equal Employment Opportunity Act (EEOA) and other hiring laws. Firms maintain structured processes to ensure hiring law compliance. Also, most firms are sensitive to their equal employment reputations concerning hiring based on gender, race, and other legally protected classes. Firms will often advertise their positive employment “list rankings” to support their equal employment narrative. [vii]

Thus, firms will meet legal and reputation requirements by ensuring a fair and objective recruiting process. To this end, many firms seek objective performance criteria to support their hiring decisions. For example, criteria such as academic major [viii] and Grade Point Average (GPA) are typical applicant screening criteria for interview pool consideration. GPA is a critical component of being invited to the applicant interview pool. [ix] The firms will then follow a structured assessment process to rank order all the pool candidates. It is this downstream interview assessment where more subjective criteria may be considered to “break the tie” of those initially passing the recruiting screens. Based on the interview assessments, firms will make employment offers from the top of the ordered candidate pool.


This is a mutually competitive process. Students are competing for the best firms and firms are competing for the best recruits.


From a student’s standpoint → an important aspect of getting hired is to pass the initial criteria screens at multiple firms. An expanded employment alternatives set enables wider choice and the opportunity to learn which employment environment is best for them. [x]


From a firm’s standpoint → many offerees will go to other firms or otherwise become unavailable for hire. Because the firms understand there is a high recruiting pool attrition rate, they aspire to keep all pool alternatives “warm” in the event there is a need to fill a vacated recruiting spot.

Recruiting criteria screens serve another purpose, they are defensible from a legal disparate impact standpoint. As a case in point, consider a firm that does not hire an applicant that is a member of a protected class. The fact that they filter applicants based on GPA or similar objective criteria provides the firm with legal protection. In the eyes of the law, GPA is generally considered a “fair” way to differentiate recruits.


This is not to suggest that new hires may not come from family and friend firm referrals. They absolutely do. But referrals are the exception, and they generally are required to pass the same screening criteria. Think of a referral as more of a tiebreaker than a hiring guarantee. In this context, referral-based networking may not be as powerful as some may believe.

Beyond legal and reputation concerns, firms generally follow a “dispersed talent” recruiting approach. Most large professional services firms follow the experience-based belief that strong talent exists in all colleges. That is, no individual selective college has a monopoly on talent. All colleges produce talented graduates. The challenge is to find and recruit talent.


As such, most large firms recruit broadly across many colleges and narrowly within colleges. Also, HBCUs (Historically Black Colleges and Universities) are certainly part of the broad college recruiting approach. The firms generally manage the protected class distribution of their incoming recruiting class via their broad college approach. This way, they will have an increased opportunity to attract protected class recruits while maintaining their GPA and other objective performance criteria.

Finally, this leads to the advice I generally provide high school students when making college decisions.


College is not a “Yes” or “No” question, it is a “Now” or “Not Yet” determination.

Go to a college where you can get a good GPA. Simply, a good GPA may be acquired if you have good study habits. [xi] If you are concerned about your study habits, then consider going to a community college or other lower-cost options to prove to yourself that you possess the needed study habits. [xii] Besides community college, lower-cost options may include vocational school, the military, volunteering, or others. [xiii] The important point is to build good study habits via your experiences. Once you convince yourself of your study habits, “Not Yet” becomes “Now.” You are now ready for a four-year college.


Think of GPA as the “3 C’s” employer’s recruiting signal. That is, your grades signal recruiters the trinity of:

· intellectual Competence → ability and willingness to learn

· Conscientiousness → hard worker

· Collaborativeness → team player [xiv]

For many firms, it is this signal that helps open the door to a successful career-oriented job.


Understanding how companies think about hiring will help you make the best college decision… whether now or not yet!


Notes

[v] Editors, Undergraduate Enrollment, National Center for Education Statistics, 2021


Stephen Dubner interview with Morton Shapiro, The University of Impossible-to-Get-Into, Freakonomics Radio, 2022. Shapiro is the President of Northwestern University.


[vi] See these articles for more information on the Professional Services approach to managing employees. This includes how firms may exploit the "Exempt / Non-Exempt employee" arbitrage permissible under current U.S. law and enabled by American culture:



Hulett, Why convexity is a helpful career guidepost, The Curiosity Vine, 2021


[vii] Many accolades are provided to firms regarding workplace inclusion. Firms consider these as a success-proof point - that is - that they have successful hiring and human resources policies and culture. As an example, Fortune Magazine regularly publishes The 100 Best Workplaces for Diversity award list. Positive firm list rankings are regularly provided on employee recruiting materials and advertised to employees.


For more information on “protected classes” as related to employment discrimination, please see the Equal Employment Opportunity Commission.

[viii] Choosing a major is sometimes a struggle. People worry about whether they will like the major and then worry whether they will like the career for which the major prepares them.


We take a practical, neuroscience-based perspective on “liking.” “Liking” is not nearly as mysterious as some may believe, in the context of dopamenic-based neuro-feedback processes. The short answer is that practice and positive feedback will lead to liking. The key is finding majors that lead to careers that are in economic demand. “Liking” will generally take care of itself via economic demand-enabled feedback. We discuss this in more detail in the following article:


Please see the “Background - our attitudes, behaviors, and career segments” section.


[ix] Indeed, a job search and recruiting company, provides a supporting perspective on how employers consider the GPA, particularly for college recruits.

Indeed Editors, Do Employers Care About GPA?, 2021

[x] This recommendation relates to negotiation theory and the concept of the "Best Alternative To A Negotiated Agreement" or a "BATNA." Building multiple BATNAs is critical to building a successful choice set and making the best choice between alternatives. Please see our article:


Hulett, Negotiating success and building your BATNA, The Curiosity Vine, 2021


Gentry does a nice job demonstrating study habits as the key determinant for college success.

When it comes to capacity for college, our belief is the vast majority of people are capable of doing well in college. That is, all people possess the mental capacity to develop the necessary study habits needed for college success. This belief is based on the observation people are generally born with a full set of neurons. On average, people are born with 80 Billion neurons and spend the first few years of life developing the synaptic pathways that serve them for the rest of their life. Thus, people, by a gift from their mom and maker, are all provided the mental capacity to be successful in college. This is a given.

The real question is whether they happen to be ready for college at age 17. While 17 may be the cultural standard age for high school graduation, actually being ready for college at 17 is a random coincidence. The individual college readiness age is impacted by a number of environmental factors and individual learning needs. Some may be ready before 17, some after. I am hopeful that someday our culture will adapt to more fully accept this reality. Time in life should not be the college standard. Readiness, as demonstrated by individual study habits and related subject mastery, should be the college standard. In the next note, we discuss how community college may be a low-cost option to validate your study habits.


[xiv] Admittedly, the 3 C’s description puts significant information value pressure on the GPA. It is much to ask from a single number! The following article provides more context on the employer's hiring perspective that utilizes the GPA as a 3 C’s signal.





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