Today, we released a new set of findings from our commissioned survey of 1,004 US college students, focusing on Generation Z’s sentiments regarding student loans, the economy and the job market they will enter in the coming year or two.
Bottom line up front, these survey results portray the wide majority of respondents as level-headed about the debt they carry, and they clearly want to land a higher-paying first job to start paying down those loans.
Every generation is marked with its economic challenges, and for Gen Z, it’s about the rising costs of higher education that is driving debt loads higher, paired with the flattened salary growth curve over the past two decades versus inflation. Approximately three quarters of our survey respondents will have debt upon graduation: 37.9% will have under $25,000, 23.7% between $25,000 to $49,999, 8.4% ranging $50,000-$99,999 and 3.5% will have more than $100,000.
Our survey found that 61% of college students would take a job they’re not passionate about due to the pressure to pay off their student loans. Related, approximately half of Gen Z respondents disclosed that they would take the first job they’re offered, with 62% naming financial pressure as the reason.
However, our 1,004 students underestimate the time it takes to clear their loans. Of the students who will be graduating with student loan debt, 44% anticipate a repayment period of five to 10 years. Confidence also varied by gender, with data revealing that men are more confident (39.7%) in their ability to pay off loans in under five years than women (25.7%). But according to the Department of Education, the typical repayment period for borrowers with between $20,000 and $40,000 in federal student loans is 20 years.
Job Market and Economic Outlooks
Gen Z’s faith in the job market is low, and as you might expect, more than half (52.9%) of all respondents believe that it’s harder to get a job today than when their parents graduated.
Regarding a potential recession, 57.7% of Gen Z respondents said they are very concerned or somewhat concerned, 30.1% are neutral, and only 13.2% are unconcerned. Perhaps their outlook is influenced in part by their family’s experience of the Great Recession of 2008: 16.4% of respondents said one parent lost a job, 7.9% reported both parents lost their jobs and 20.1% said one or both parents lost wages as a result.
The majority of students (38.6%) believe their starting salary will fall into the range of $25,000 – $49,999. They expect their salary to rise, with 45.4% of students expecting to make $50,000 – $99,999 within 5 years of graduation. While these expectations are fairly consistent with salary progression trends of early talent, our panel may be too optimistic about the time it takes to land their first job: 20.4% said they’ll have one upon graduation, 26.6% within a month, 33.4% within 3 months and 19.6% said it will be 6 months or more.
This said, our Gen Z survey found respondents to be more pragmatic than choosy. More than half (50.1%) said they will take the first job they are offered, citing needing money (62.9%) and the worry that it will be the only offer they receive (25.7%) as the top motivating factors.
This group is also coming to the workforce prepared: 36.3% of students will complete two to three internships before graduation and 76.8% will have at least one. These responses are consistent with their beliefs about the most important tools to land a job. They ranked internships and relevant skills at the top of the list and academic performance third.
Recruiting Gen Z: Appeal to Both Needs and Aspirations
This recent survey confirms the problematic truth that Gen Z has student loan debt on the top of their minds when making career choices. But at the same time, it’s important that future employers continue to take measures to understand what else motivates and inspires Gen Z. This generation is certainly the most technologically advanced generation to date, and they are also the most demographically diverse. So it’s important to keep these factors in mind, and Handshake also recommends including Gen Z’ers on recruiting and hiring committees to ensure that programs are finely tuned for this population. Other key recommendations are:
- Address career path flexibility, training and rapid advancement. Even though not a practical reality in most organizations, 75% of our survey respondents believe they should be promoted within a year. Just as important, they value career flexibility and would like to count on their future employers for training — almost 30% of students on Handshake proactively seek employers with evidence of strong training programs and an ongoing commitment to them.
- Begin personalized outreach early and online. Handshake data confirms that Gen Z begins researching and planning for their first job as early as freshman year. As the “always connected” generation, early talent is more likely to respond when an employer reaches out with a personalized message.
- Offer Gen Z-centric benefits. Consider student loan repayment matching, a more liberal work-from-home policy and transportation perks.
- Diversity & Inclusion programs matter. They are inspired by equal opportunity, and they can sniff out unconscious biases in your web site content and in how you communicate with candidates. What’s more, you can count on them to compare what you say with your reviews on Handshake to confirm that you are walking your talk.
For more guidance on how to evolve recruitment tactics to better address Gen Z, see further advice here. These are certainly exciting times and we will continue to provide you with more fresh research and insights as we enter the 10th-straight year of increases in hiring early talent while we witness greater numbers of Baby Boomers retire over the next several years.
About Propeller Insights and the Survey Methodology
The online survey of 1,004 US college students, primarily targeting 16-24 years of age representing 49 of 50 states (excluding Vermont), was conducted by Propeller Insights on behalf of Handshake, between October 17th and October 22nd, 2019. Propeller Insights strives to achieve a statistically significant sample that meets the industry standard of a 95 percent confidence level and a 5-point margin of error, based on the population being represented for all online quantitative surveys. Propeller works with the leading online sample providers, and the sources we use are based on the project requirements/target, as well as sample size and incidence rate.