05-06-2025
The State Of Early Talent: Lessons From The Market
The U.S. economy is — in a word — volatile. Markets are shifting rapidly amid growing concerns about rising unemployment and an economic slowdown. Employers, consumers and jobseekers alike are understandably anxious about the future.
I recently sat down virtually with a pair of experts: Heather McKay, senior vice president of employer engagement at Strada Education Foundation and executive director of the Strada Institute for the Future of Work; and Shawn VanDerziel, president and CEO of the National Association of Colleges and Employers. For nearly an hour we talked about the Class of 2025, the current job market and other top-of-mind topics for employers and career services professionals.
Here are four key takeaways from our conversation:
When NACE surveyed employers last fall, companies were planning to increase hiring from the Class of 2025 by 7.3% compared to a year earlier. By this spring, however, employers had revised their estimates significantly downward to less than 1%.
Handshake data reveals a similar job market softness. Over the past year, job postings on the Handshake platform shrank by 15% while applications surged by 30%. It's hardly surprising that the Class of 2025 is so down on the job market: 56% are somewhat or very pessimistic about starting their careers in the current economy.
To take a more optimistic view, flat year-over-year hiring projections does mean that employers are still seeking new talent — just not in greater numbers than in recent years. For now, it remains a buyer's market for early talent. And because employers are taking a slow but steady approach to hiring, there will be plenty of top talent available throughout the summer and well into the fall.
Internships remain the best recruitment tool for employers in terms of return on investment. According to the latest NACE data, companies hired 51% of their interns to full-time opportunities after their internships concluded. After one year on the job, the retention rate runs 20 to 30 percentage points higher for former interns than for employees hired without an internship. For companies that hire dozens or even hundreds of their interns each year, the impact of internships on hiring and retention of early talent is huge.
Postsecondary institutions should be embedding work-based learning experiences into their curricula so students get career experience before they enter the workforce. Institutions also should be connecting their students to internship programs at local and regional employers. Better yet, a well-connected third party — like the Baton Rouge Area Chamber in Louisiana — could coordinate and encourage connections between local employers and universities for internships and full-time hiring.
Employers, meanwhile, should be creating paid internship programs that give interns actual tasks with real-world implications (like this US Chamber of Commerce project), assign them mentors, allow them to interact with colleagues throughout the organization and provide feedback on their performance. Their goal should be to help their interns — and potential future full-time employees — get the most out of this on-the-job learning experience.
Handshake data reveals that 98% of the Class of 2025 are familiar with generative AI tools — and 62% are worried about the impact this fast-emerging technology might have on their careers.
The truth is, AI use in the workplace isn't as widespread as it's purported to be — at least not yet. Most people tend not to be early technology adopters, and many small and mid-sized businesses — the companies that employ the majority of early talent — don't have the resources to make significant AI investments. That said, AI is not necessarily going to take your job, but the people who know how to use it probably will.
AI's rapid rise requires institutions to double down on efforts to create lifelong learners willing and able to upskill and reskill themselves throughout their working lives. Institutions also should ensure they're teaching durable skills alongside technical ones. Critical thinking in particular is invaluable for developing, iterating and managing AI processes.
Both Heather and Shawn had these words of advice for institutions and employers seeking to produce and secure the best early talent:
From Heather McKay: 'Institutions need to understand their local labor market and begin to think about how degree production aligns with the local labor market. … It's not happening often but when it does, it provides really important insights into how institutions need to think about preparing their graduates for success.'
From Shawn VanDerziel: 'If you run into a 2025 college graduate, offer to be part of their network. Be a mentor. Review their resume. Make connections for them. Help them to think broadly about their skills and experiences … and how to apply them to a full-time career. Together, we can make a difference for graduates through our networks and by working with them individually.'
Watch our full conversation here.
