Want an Entry-Level Job? You'll Need More Experience Than You Might Think

By Dow Jones Business News, 

By Lauren Weber and Melissa Korn

Entry-level work isn't what it used to be.

Companies bruised by the recession have stayed lean by automating and outsourcing core functions while slashing training budgets and payrolls. But in an effort to cut costs, some firms have also cut entry-level jobs that serve as a crucial first step on the path to a professional career. And others have made the responsibilities for first-timers more sophisticated, raising the bar for new graduates, who are expected to arrive job-ready from day one.

These developments may be making it more difficult for some young adults to gain a foothold in the labor market, economists say. The unemployment rate for 20- to 24-year-olds is falling as the economy recovers, but remains at a historically high 11.3% as of July, with young adults lacking college degrees having an especially hard time finding entry-level jobs.

Managers at State Street Corp. are currently grappling with a transformation in the company's entry-level roles.

Four years ago, the Boston-based bank began an overhaul of its technology systems to cut costs and streamline operations. Now, as the project nears its end, the company is assessing how to employ fund accountants when some of their main assignments--such as calculating funds' net asset values--have been automated, said executive vice president Kathy Horgan, who oversees talent management at State Street.

The job titles are the same, but the responsibilities have shifted significantly from what was done a few years ago. Instead of memorizing 15 or 20 steps in a calculation process, fund accountants at the bank must now be able to identify anomalies, help resolve software glitches, and figure out which other teams they should work with. In some cases, they must also call clients directly, Ms. Horgan said, putting a new premium on people skills.

Managers began to ask, "What's the new entry-level job?" Ms. Horgan recalled.

So the bank's HR team, with input from front-line managers, is supplementing traditional job descriptions with more detailed "role charters" for entry-level jobs, emphasizing more abstract and sophisticated skills such as collaboration and problem-solving rather than basic functions like report preparation.

"Tasks are changing more rapidly than they ever have in the past," Ms. Horgan said. As a result, "The career path [ for young people] is changing as we speak."

The government doesn't break out data for "entry-level jobs"--the category is tough to track since it varies across industries and employers, and changes as new skills and jobs appear in the labor market--but economic studies show that employers, spoiled for candidates over the past few years, have been raising their experience requirements for what might be considered entry-level work.

The number of recruiters requesting two or more years of work experience for some middle-skill occupations rose by as much as 30% from 2007 to 2010, according to a paper by economists at Harvard University and the Federal Reserve Bank.

The slack labor market during that time offered a natural experiment, said one of the authors, Alicia Sasser Modestino, formerly at the Federal Reserve Bank of Boston and recently named a professor at Northeastern University. " Employers had carte blanche" to choose the most skilled applicants from a pool stocked with candidates, she said. Newly minted graduates with associate's or bachelor's degrees were forced to get experience elsewhere, such as internships, or stretch their skills to find more demanding jobs.

The next few years will reveal whether a more worker-friendly job market forces companies to reduce those requirements, said Ms. Sasser Modestino.

As some entry-level positions are transformed or fall away, others emerge. The job of social media manager, a possible entree into the fields of media or marketing, didn't exist five years ago. Now, more than 18,000 such positions are open, according to job board Indeed, and thousands more workers currently serve in the role. And entry-level jobs in computer systems and public relations are expected to grow over the next decade.

Still, a sampling of Bureau of Labor Statistics data suggests that demand for bottom-rung professional positions, such as loan officers, insurance underwriters and credit analysts, lagged behind that of the overall job market in the period from 2003 to 2013 and is expected to remain stunted, or even shrink, in the coming decade.

Brian Hamilton, chairman and co-founder at financial information firm Sageworks Inc., said clients such as accounting and financial services companies require 30% fewer man-hours to complete valuation calculations when using the firm's financial statement-analysis software.

As a result, people once expected to input data and run basic calculations--workers with titles like credit analyst at banks or in lower-level accounting roles--are now being asked to manipulate and analyze the data. "Everyone gets pushed up the food chain," Mr. Hamilton said.

Or, put another way, entry-level workers are now being assigned "thinking" roles, as opposed to "just following a checklist," said David Vogel, who manages the undergraduate career development office at the University of North Carolina'sKenan-Flagler Business School. "It raises the bar on the types of work that can be done by the entry-level hire, as opposed to eliminating the need."

At the same time, workforce experts see a parallel dynamic where employers are reducing training budgets. The result is that companies want workers to arrive job-ready, with both soft and hard skills.

For example, training programs for sales jobs at major corporations regularly lasted two years in the 2000s, teaching the ins and outs of the products they were selling and explaining market trends for distributors and end users. Now, new hires would be lucky to get six months of ramp-up time, said Andrea Dixon, executive director of Baylor University'sCenter for Professional Selling, which prepares students for sales careers at companies like Humana Inc., Oracle Corp. and 3M Co.

Ms. Dixon tells of one former student who, within 18 months of joining a Fortune 100 chemical company, was running $35 million worth of accounts. A decade ago, she said, a territory that big would be handled by a 40-something, not a 23-year-old.

At Deloitte Consulting LLP, new hires still receive intensive training, but they are expected to arrive with the communication skills and business acumen to sit in client meetings from the start. A decade ago, managers took the approach that "we can teach you everything you need to know," said Jim Hagy, a director in the human capital practice. But today, "what we need is people who can immediately get in front of clients. They're not going to sit in a back office anymore."

Such high expectations for low-level workers mean early experience is crucial.

Marissa Onsager, who graduated in May from Kenan-Flagler, spent last summer interning in the sales department at General Mills Inc. Her experience there culminated in delivering a full presentation to a representative from a large supermarket chain that was seeking more insight on minority shoppers' purchasing patterns.

"It felt a little weird because I was so much younger than the customer, " said Ms. Onsager, now 22. "But at the same time, I was the expert."

Later this month, Ms. Onsager will start as a business analyst in Deloitte'sCharlotte office.

"The intern has become the new entry-level hire," said Eileen McGarry, executive director of career services and student engagement at the University of Arizona.

Write to Lauren Weber at lauren.weber@wsj.com and Melissa Korn at melissa.korn@wsj.com

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