College graduates with technology skills are seeking jobs outside of the tech sector, in government and in industries like healthcare, manufacturing, construction and retail, according to a recent report by employment marketplace Handshake.
As layoffs and hiring freezes swept through Silicon Valley, applications to tech companies by graduating seniors dropped by four percentage points year-over-year, Handshake found. The analysis compared 87,000 tech job applications filed this year between September and February with applications filed during the same six-month period the prior year.
In response to economic uncertainty, graduating students are looking for stability, according to Christine Cruzvergara, chief education strategy officer at Handshake. Two in five graduating students said they are open to apply to more industries as a result of news about the economy, according to a Handshake survey of 423 members of class of 2023.
“Students are paying attention to the news and, for the last three months, they've been watching a whole bunch of major tech companies that they've been familiar with since they were young suddenly laying off thousands of people,” Cruzvergara said.
Despite tech sector woes, the broader economy added nearly 200,000 new tech positions in March, according to the latest CompTIA analysis of U.S. Bureau of Labor Statistics data. The unemployment rate for technologists remained at 2.2%, more than a full percentage point below the rate for all professions.
Persistent demand for tech skills across industries continues to offset marginal job losses in the tech sector, which is emerging from a multiyear hiring boom.
This year, the number of applications for tech positions in government and the nonprofit sector grew by 1.4 and 0.6 percentage points, respectively, Handshake found. Financial services, automotive and healthcare are three industries that have increased recruitment from graduating classes, according to Cruzvergara.
Emerging tech sectors
Computer science and other tech majors may initially overlook employment opportunities at companies like General Motors, Capital One and Fidelity, Cruzvergara said. But once they do some research, talk to the career center and engage with employers, they realize there are open positions for entry level technologists throughout the economy.
Fidelity, a 77-year-old financial services company that has weathered numerous economic downturns, announced in February plans to hire more than 700 technologists this year.
“These associates are at all levels — entry level to senior leader — and include full stack software engineers, data scientists, mobile/iOS engineers and architecture professionals,” a Fidelity spokesperson told CIO Dive via email.
To shore up its recruiting efforts, Fidelity runs an in-house upskilling program for recent and upcoming college graduates. In 2021 the company launched a professional training initiative for newly hired computer science majors.
Other companies are directing similar efforts, according to Cruzvergara.
“We see a lot of movement around internships, with companies in different sectors and industries posting a little bit earlier in the school year to try to win the talent that historically may have gone to financial services, consulting or the tech sector,” Cruzvergara said.
Incorporating training into the onboarding process is crucial for companies looking to recruit recent college graduates.
“Industry is always going to move at a pace that's faster than higher education,” Cruzvergara said. “Most schools struggle to keep up with curriculum changes at a pace that would actually meet what employers need.”
Hidden pools of talent exist among non-tech majors, according to Cruzvergara. She has noted an uptick in English, journalism, history and psychology majors who list C++, Python and other programming languages among their skills.
“We are seeing a lot more four-year degree holders who majored in a liberal arts discipline but that also have skills in coding, programming and other technical areas,” Cruzvergara said.