Personal Finance

Why your first job out of college really, really matters

Key Points
  • More than 40 percent of college graduates take a job out of school that didn't require a degree.
  • This first job can have serious impacts on the rest of their lives. 
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Many college graduates are eager to find work — any work. But that first job, however arbitrary, can impact the rest of their career.

Recent grads who end up in jobs that didn't require a college degree are five times as likely to still be in such a position five years later, compared with those who put their diploma to use right away.

It can be hard to break out of that path, since employers may typecast applicants by their most recent experience.

Ten years later, three-quarters of graduates who took jobs early on that didn't demand a degree will be in the same spot. And these graduates earn around $10,000 a year less than their counterparts who started early in jobs that required a college degree.

"You have to be strategic about your first job," said Michelle Weise, chief innovation officer at the Strada Institute for the Future of Work, a nonprofit that focuses on the relationship between education and work.

These findings come out of a new report by the Strada Institute for the Future of Work and Burning Glass Technologies, a career market analytics company. The researchers analyzed more than 4 million resumes.

"Young adults underemployed after graduation can't consider it just a phase," the report reads. "A few months can easily turn into a few years and eventually an entire career."

More than 40 percent of college graduates take positions out of school that don't require a degree, the study found.

And more than 1 in 5 college grads still aren't working a degree-demanding job a decade after leaving school.

These figures threaten to undermine what has long been college's main mission: to help people get ahead in their lives, said Matt Sigelman, CEO of Burning Glass Technologies. "Does college continue to live up to the promise it had in past generations?" he said.

Employers' expectations have also gone up, he said, making it harder for young people to quickly find a job that aligns with their studies. Even for entry level positions, demands can be tough to meet.

"Employers are surprisingly specific of the work-ready skills you’re supposed to bring in," he said. "That makes it challenging for students who haven’t designed their path through college to include picking up those kind of skills.”

Many college students, for their part, don't start preparing for work soon enough, said Weise at the Strada Institute for the Future of Work.

She said 40 percent of undergraduate students never visit their college's career services department. (Students should make regular visits to this office, she said.)

People need to start thinking about their first job well before they graduate, Burning Glass Technologies' Sigelman said.

He said students should enroll in courses, and seek out internships and jobs while they're in college that will show employers they're prepared for the job. "That can make a world of a difference," he said.

But don't assume you need to major in a more "practical" field.

"Majors matter but they aren't destiny," Sigelman said.

For example, his research showed that English majors are actually less likely to take a job that doesn't require a degree out of college than are business majors.

More important than what you study, he said, is that you're keeping in mind the skills you need to land a job in that field one day.

And don't assume while you, say, wait tables that your career will just naturally "get figured out," said Sigelman. "Once you’re underemployed, it’s increasingly difficult to escape," he said.

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CORRECTION: This story has been updated to correct the spelling of Michelle Weise's name.