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COVID-19 did not put a damper on hiring and pay rates for college graduates, according to Pearl Meyer’s 2021 College Graduate and Intern Compensation Survey (which covers data from 2020).
Given the concern during the pandemic, the fact that both pay and hiring were up slightly in 2020, compared to the 2019 survey was surprising, but definitely offers hope to young job seekers as the United States comes out of the pandemic. The survey found that the median number of graduate hires per company was up from 99 in 2019 to 103 in 2020, and pay for college graduates was also up by 1.8%.
Short-term or annual incentive awards for college graduates did not track that same uptick in 2020, but the numbers were close. The median value of annual incentive awards in 2020 was $2,851, compared to a median value of $3,000 in 2019. The average for those awarded a signing bonus in either year was $3,000.
According to Pearl Meyer’s 2020 statistics, the pandemic did impact the use of sign-on bonuses for college graduates. Signing bonuses were more prevalent pre-pandemic, with 31.6% of hires receiving one in 2019, compared to 26.2% in 2020.
This data point is not surprising, since signing bonuses are typically used in tight labor markets where there is more competition (or perceived competition) and companies do not want top talent to hold out for a potentially more lucrative offer. Amid the uncertainty of COVID-19, college graduates were more willing to accept first offers.
The pandemic also affected short-term incentive target values for college graduates. The median short-term incentive target value in 2020 was $2,430, down from a median value of $3,000 in 2019. This shift is likely attributable to the uncertainty compensation departments faced when setting these values in the midst of the pandemic. Companies had valid concerns about bonus pools and were not willing to set bonus targets when there was uncertainty about their ability to pay out.
COVID-19 impacted interns more than it did new college graduate hires, according to the survey. The number of intern hires dropped to 49 per company in 2020, compared to 76 in 2019. This shift was not unexpected. In late April of 2020, Glassdoor noted that 52% of internship openings had been closed between March 9 and April 13 of that year.
However, our survey found that most companies plan to hire the same number of interns in 2021 that they previously did, and most intend for those interns to work remotely or partially remotely. There was good pay news for interns; despite a reduction in the number of internships, intern pay rates rose by 3.3%, and rose consistently for each degree level.
These survey findings indicate that there is some stability in the entry-level market. Certain measures, such as intern hiring rates, were clearly affected by the pandemic. However, even those numbers are in the process of recovering based on responses to our policies and practices questionnaire, which indicated that companies expect to hire interns at pre-COVID-19 levels.
Another trend we see emerging is that new graduate hires are not just “nice-to-have” for companies. Companies need to keep pace in an ever-evolving world and economy, and new graduate hires are an essential addition. While the world continues to adapt to life after the pandemic, new graduates and those working on obtaining their degrees should thrive with newfound flexibilities in workplace culture, changes to leisure time hobbies and habits, and societal changes.
About the Author
Todd Carter is a survey account manager at Pearl Meyer.