College graduates, who face higher unemployment than any other educated group, will meet unprecedented difficulty in finding jobs this year as companies halt expansion plans and tighten human capital to weather the economic downturn, economists said yesterday.
While the poor economy is to blame for the shrinking labor market, the general lack of professional skills among college graduates aggravates their plight, which could linger after the recession if they fail to address the matter, economists said.
Polaris Research Institute (寶華綜合經濟研究院) president Liang Kuo-yuan said that unemployment was highly likely to exceed 6 percent in coming months after dropping 0.03 percentage points to 5.76 percent in April.
Starting late last month, more than 300,000 new college graduates were expected to enter the job market, though some could follow the government’s advice and continue their education before a recovery.
“Like job-creation programs, postponing graduation could help mitigate unemployment in the short run, but this is not a lasting remedy,” Liang said by telephone.
Liang said the economy was likely to make a semi-V-shaped recovery mixed with a protracted spell of stagnancy.
With an uncertain outlook, firms will remain conservative, although their risk appetite has recovered somehwhat, Liang said, adding that new job opportunities would be limited this year.
The economist said job seekers should increase their competitiveness rather than worry about when to enter the job market, adding that skilled people are always in demand.
Jack Huang (黃蔭基), head economist at SinoPac Financial Holdings Co (永豐金控), said his company had introduced a salary and personnel freeze amid the financial crisis.
The road to recovery, he said, could be bumpier than expected, as retail sales in the US remained weak and exports in China dropped 28 percent last month.
“Companies that are willing to hire new employees offer low salaries,” Huang said, adding that management associates in financial holding firms, for instance, were offered an entry salary of NT$55,000 a month in 2006, but half the amount this year.
“The situation has a slim chance of improving this year,” Huang said by telephone.
Kevin Hsiao (蕭正義), head of UBS Wealth Management Research, said the macro-environment was unfavorable for first-time job seekers, who need three to six months to become productive.
“Amid the downturn, companies will prefer experienced workers who can make immediate contributions — and that’s if recruiting new employees is necessary,” Hsiao said.
He said the labor market had yet to hit bottom and would remain tough for the rest of the year.
The economist, however, said companies with vision should start recruiting and nurturing talent because doing so now was less expensive than after a recovery.
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