College Grads Settling for Retail Jobs

Discussion
Aug 24, 2012

The good news: seemingly more college grads are working retail these days. The bad news: they don’t want to be there.

A joint study by PayScale, Inc., a provider of on-demand compensation data and software, and Millennial Branding, a Gen Y consulting company, looked at the state of the Gen Y worker (18 to 29).

According to the study based on survey of as many as 500,000 Gen Y workers between July 2011 to July 2012, more than 63 percent of Gen Y workers have a bachelor’s degree but many are working in jobs that don’t require a college degree, particularly retail.

For instance, Millenials are more than four times as likely as workers overall to hold a retail industry jobs such as a merchandise displayer, clothing sales representative, or cell phone sales representative. More than 80 percent of millennials selling clothes have bachelor’s degrees, while almost 70 percent of cell phone reps are college grads. The median pay for the merchandising job is just $23,400, while the other two pay around $28,000.

The study comes as the national unemployment rate ticked up to 8.3 percent in July. The rate reached 13.5 percent among those between the ages of 20 and 24 while 9.3 percent of those aged 25 to 29 are unemployed.

"Gen Y is finding themselves lost in this place of getting a college degree, paying a lot of money for that college degree and then not being able to put it to use and only finding jobs that typically don’t require a college degree, whether it be in retail or a barista or anything in the service industry," PayScale’s lead economist, Katie Bardaro, told The Fiscal Times. "And they’re just trying to chip away at their student debt any way they can."

On the positive side, the study found Gen Y to be highliy-qualified in emerging areas such as technology and social media. Software, blogging and social media topped their list of skills. Gen Y workers also showed a preference for smaller firms that allow for more flexibility, an opportunity to embrace their entrepreneurial ambitions, and the opportunity to use social networks at work without strict corporate guidelines.

"While they are the future corporate leaders and change-makers, they are suffering in this economy by having to work in retail jobs over professional ones," said Dan Schawbel, founder of Millennial Branding, Gen Y expert and bestselling author of Me 2.0, in a press release. "A bachelor’s degree can no longer be traded in for a job."

Can retail improve on the way it’s working as a post-college apprentice tool? Should retailers capitalize more on the seemingly greater amount of college grads open to retail work? On the other hand, what are the risks of hiring “settling” employees?

Join the Discussion!

13 Comments on "College Grads Settling for Retail Jobs"

Notify of

Sort by:   newest | oldest | most voted
Ian Percy
BrainTrust

The truth is that for the most part, a college education is supposed to teach you to ‘think’ and on a lesser scale, what to ‘do’. So what is retail actually offering? The starting assumption by retailers (never mind the actual employee) is that the job will be a stop-gap measure until something worthy comes along. And surprise surprise…that becomes the reality.

A retail job needs to offer:
MANAGEMENT — someone who actually cares about your future.
METHODOLOGY — science, art, technology that goes into successful retail. Retail is more complicated than it looks.
MONEY — enough to live on and incentives to do even better. How about profit sharing for example?
MATURITY — the chance to actually develop and grow into something. Most retail is a ‘one slot shop’.
MEANING — understanding and participation in a higher ‘WHY’ than merely selling another pair of shoes.

Max Goldberg
BrainTrust

Retail can improve. It needs to do so by making its stores a good place to work, a place where workers feel empowered, are paid well above minimum wage and a place that can lead to a career.

My daughter graduated college last year and entered retail because jobs in her chosen profession were scarce. At first she loved the bookstore where she worked. She was engaged with other smart, genial college grads, and she liked selling. But after a year, where she has been the top sales person, she has yet to be given a raise, and after repeated unsuccessful attempts to progress into the marketing and communication functions within the organization, she has soured on the organization and can’t wait to leave retail. She can’t live on $12 an hour.

Retailers talk about empowering employees and wanting to retain them, but until they back their words with action, retail will be a stepping stone to something else and a revolving door for most employees.

Camille P. Schuster, PhD.
BrainTrust

Absolutely, retail can improve its relationship with college students thereby hiring students who want to work for their company. However, retailers need to be active on campuses. Students need to see that retailers are not recruiting for “clerk” jobs but are recruiting for professional career jobs. Students need to know what the professional career opportunities are. One retailer takes an active role in the student organizations and activities on my campus. As a result a good number of students look to that retailer as a potential employer, as an employer of choice.

Ken Lonyai
BrainTrust

The two sides to this coin are opportunity and peril. Smart retailers can seize the day and revamp the traditional way of staffing a store: store manager, department managers, sales associates, for a new horizontal type of model that creates opportunity and responsibility that would have more long-term stickiness for the new crop of employees. It would give people that have invested in education in other fields a way to redirect their plans, so as not to feel they are buying time, but rather embracing a new work model that rewards their efforts and provides resume-level work experience. Otherwise, as the economy picks up in the future (??), there will be a steady migration away from retail. Yet, more damaging, in the interim, stores will be struggling to stay competitive with dare I say an even a less motivated workforce than teenagers?

Richard J. George, Ph.D.
BrainTrust

At Saint Joseph’s University, more of our food marketing graduates are opting for positions with food retailers. For many years, students selected CPG companies due to the management of their expectations — company car, signing bonus, no weekend scheduling, etc. by the manufacturers. In addition, many high school students did not have a good experience working for a food retailer as a bagger, cart person or shelf stocker.

We invited the top food retailers in to address tomorrow’s food marketing leaders and ask them to tell their story. Students discovered that within a few years of graduating they could be responsible for total management of a $100 million/year food retailer with a well-defined career path. Most of their CPG counterparts would not have such levels of responsibility at the same time in their careers. And yes, the CPG alumni worked weekends as well.

Now our best and brightest don’t settle. Instead, they seek those companies, retailers and others, who can provide them with a meaningful challenge and a clear picture of the opportunities in the company beyond the entry level position.

jack crawford
Guest
jack crawford
4 years 10 months ago

Until us boomers stop wanting something for nothing and always the cheapest price, there will never be decent jobs in retail. Walmart has set the tone, everyone else is just following along.

Ralph Jacobson
BrainTrust

One of the most prolific conversations on LinkedIn in the “ALLRETAIL retail executive network” Group centered around the theory that 8% unemployment may be the new normal. Some truly insightful comments are on that blog thread.

Paul Righello
Guest
Paul Righello
4 years 10 months ago

This kind of makes me sad. Some years ago I put myself through college working retail. The last thing I would have wanted to do is graduate from college and go straight back to…working a low paying retail job. What was the point of college then? I think retail can be a career even for the educated, but it needs to pay a living wage to make that a viable option. Frankly, if I could make in retail what I make as a corporate analyst I would do it, but you can’t exactly support a family as a floor associate. I think this goes for all sorts of jobs that are perceived as low value. Not everyone is cut out to get an MBA and become a C level executive, nor is there room for everyone. It takes all kinds for a functional society; we just need to start paying a living wage for all work.

Colin Haig
Guest
Colin Haig
4 years 10 months ago

Settling? Retail is a great industry, and has a lot to offer. Was a great start to my career — learned every process in the business early on, and was able to use again many years later. Now I have a great job in the software business focused on the retail industry.

Roy White
BrainTrust

This would seem to be a perfect opportunity for the retailing industry to upgrade its workforce from top to bottom. For too long retail has had to make do with a lower percentage of top-notch job candidates. Current retail company managements now have the challenge of turning these reluctant soldiers into dedicated and effective retail leaders at store level and in the headquarters office. If improved training, good HR policies can be implemented, retailing stands to benefit substantially from their intelligence in meeting the many thorny issues that are going to be thrown retailing’s way over the rest of the 21st century. And perhaps Mr. Dan Schawbel’s arrogant comment about retail jobs not being professional will never be made again.

Christopher P. Ramey
BrainTrust

Retailers should use the opportunity to hire educated and motivated individuals who may be easier to train, and more likely to be creative and service oriented.

The above statement has nothing to do with a college degree.

Mike B
Guest
Mike B
4 years 10 months ago
Point of view of me, a 27 year old with an undergrad in Business Management and a masters in Accounting, and in line to get a CPA once I have the experience (worked retail through high school and college at a few publicly traded chains, but not currently working in retail): Most young people don’t seem to like physical work very much and also don’t really seem to like interacting with people. Young people now seem more in tune with devices and gadgets than with people. Retail is completely a people business. One of my favorite things in retail was (and still is when I am out looking at stores) the customers; getting to know them, watch their buying habits, listening to what they think. But the management end not only has the customer interaction but also has the whole employee interaction piece. It is completely a people business. But there are many people who really can get to like retail and become interested in the many pieces involved with whatever retail operation they are working for. Just because large red discount chain is recruiting on campus does not mean large red discount chain is the best fit for an… Read more »
John Crossman
Guest
John Crossman
4 years 9 months ago

I know many successful executives that started on the floor in retail. I think it’s a great place to start and would promote it to college students.

wpDiscuz

Take Our Instant Poll

Do the benefits of retailers hiring college grads offset the downside of hiring a "settling" employee?

View Results

Loading ... Loading ...