Do Experienced Workers Really Outperform Recent Grads?

Over the past week, thousands of college-age students have returned to campuses across the United States. Over the next eight months, many of these students—those who are seniors—will go on the job market for the first time. A small percentage of these students will end the school year with a desirable job offer in hand. Many more will be about to embark on the first of one or more internships that may or may not pay anything at all and may or may not eventually lead to a job. Unfortunately, many more of today’s college and university seniors will find themselves working as a barista or living in their parents’ basement and wondering if they should simply return to school to up their chances of finding a job in the future. While there are many reasons that college and university educated but inexperienced candidates do not land full-time jobs straight out off the graduation runway, there is one reason that trumps all others: Inexperienced workers do not perform as well as experienced workers. In this post, we question whether or not this widely held assumption is grounded in reality and further explore why many employers appear invested in hanging on to the assumption.

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Conventional wisdom leads many people to conclude that more experience is necessarily better. This assumption is so widespread that many young Americans now simply accept the fact that after paying upwards of $200,000 for an undergraduate degree, they will likely need to spend another year or two toiling away—free of charge or nearly free of charge—as interns. Of course, as discussed in previous posts on this site, the internship is not for everyone. Indeed, while more privileged students can often afford to spend a year or two interning for free at top organizations in their field across the United States, less privileged students, who are also far more likely to have accumulated large student loans during college, are typically forced to accept low-paying jobs, often entirely outside their desired field of employment. In the end, those candidates who can afford to gain experience (without compensation or for an unlivable wage) are far more likely to end up eventually acquiring high-paying positions in a desired field than those candidates who have no choice but to start working straight out of college. If the situation sounds inequitable, it is, but the bigger question is this: Experience is apparently so important that a majority of Americans have decided that it’s fine to ask debt-laden youth to work for free but what evidence do we have that experienced workers necessarily outperform new grads?

Using Talent Analytics to Answer the Question

This was precisely the question that pharmaceutical giant Johnson & Johnson asked itself in 2013. The previous year, the company decided to cut back on hiring new college grads and recently graduated MBAs in several departments, including HR, IT and supply-chain management. The company directed its managers to tap experienced workers instead (e.g., people with five to ten years of experience or more working in similar positions at other organizations). As a result, Johnson & Johnson’s hiring of new graduates fell 10% in one year. So did the decision pay off? Did the company’s experienced hires outperform the college graduates they had replaced?

To find out, Johnson & Johnson’s talent analysts looked at a dataset containing information on 47,000 employees, including recent university graduates and experienced employees, and compared several performance indicators, including promotion and attrition rates. What they discovered was that recent graduates performed as well as experienced hires but more notably, they were more likely to remain at the company over time and more likely to attain promotions. In short, when the company looked at the numbers, they discovered that their recruiters’ assumption—experienced workers outperform new graduates—was false. As a result, the company not only reversed its decision to hire fewer new grads but also increased its targeted recruited of new grads.

Why Do We Celebrate the Founders of Successful Start-Ups but Insist on Experience?

As suggested above, talent analytics offer growing evidence that inexperienced workers often perform as well or better than experienced workers. But we don’t even need to turn to data to realize that new graduates with little or no work experience are talent assets. Anecdotally, we need only consider the success of any number of major start ups that were launched by recent college graduates with little or no work experience.

Take, for example, the case of Airbnb. In 2007, Airbnb founders Brian Chesky and Joe Gebbia were two recent art school grads and like many art school grads, they were wondering how to come up with money to pay their next month’s rent. In their case, a combination of creativity and desperation sparked an entrepreneurial concept that would soon change how people around the world traveled—a concept that would eventually come to be known as Airbnb. Like many start-ups, Airbnb started on a microscopic scale—with Chesky and Gebbia renting out their own pay-as-you-stay air mattress in their shared loft. As their own air mattress gained traction in San Francisco’s pricey vacation rental market, they decided to expand. Of course, they needed money for their start-up, which they didn’t have. For some odd reason (maybe this is just how men in their early twenties think?), they decided that selling boxes of Cheerios and Captain Crunch transformed into boxes into “Obama O’s” and “Cap’n McCain’s” during the democratic national convention would be a great way to raise money for their start-up. In the end, they sold 500 boxes of the sugarcoated revamped cereal at $40 per box and made $30,000 in just a few days. From then on, Airbnb was in development. Indeed only a couple years later, the company was worth millions and had launched in cities across the US.

Today, Chesky and Gebbia, still in their early 30s, are among the most successful entrepreneurs in the country. Yet, ironically, less than ten years ago, few companies would have been overly eager to hire either of these men and who can blame them. After all, many employers would think twice before hiring two guys who think that creating political parodies on boxes of Cheerios and Captain Crunch is a good business idea. But perhaps, this is precisely why hiring inexperienced workers is a good idea—after all, thinking outside the box is usually not an issue for workers who have yet to have innovative thinking beat out them.

The Pros and Cons of Hiring Recent College/University Graduates

The Pros and Cons of Hiring Recent College/University GraduatesPros

  • Can be trained from the ground up (no preconceived ideas about how things should be done).
  • Tech savvy (comfortable using a wide range of digital platforms for work and training).
  • Eager to please and eager to learn.
  • Wiling to work long and flexible hours (less likely to have a need to balance work with family commitments).
  • Ready and willing to think outside the box.
  • Can be hired at an entry-level salary (cost less than most experienced workers).
  • Some studies suggest recent graduates are also more likely to stay with a company for a longer period of time.

         Cons

  • May not fully appreciate the responsibility connected to having a job (e.g., may not realize that arriving three hours late and explaining that they slept through their alarm is not an option).
  • Require a longer and more elaborate onboarding process.
  • Require more on-the-job training.
  • May be less likely to ask questions at critical moments (e.g., while experienced workers are often comfortable asking questions because they know when and what to ask, recent graduates may not ask questions for fear of appearing inexperienced).
  • Hiring new grads often means hiring someone who has yet to specialize; an organization may need to move the hire from department to department or through several positions to determine what department and position is the best fit (again, this means increased training and supervision).

With the rise of the unpaid intern restructuring education, training and work across the United States, the experience question has become a major issue for educators, people in the professional training community and for employers. Notably, legally, one can only intern for free if they are working for a non-profit or gaining college credit for their internship but illegal internships are widespread and from all accounts, they are here to stay. Given that many young people are now willing to be exploited to gain experience, it seems imperative that organizations stop working on the assumption that experience is necessarily better than no experience. As for the millennial workers who have resigned themselves to the idea that working for free or nearly free to gain experience may be the only way to eventually land a great job, there is also reason to look more closely at the numbers. Forbes Magazine reports that in fact Millennials who have completed internships are only 2% more likely to land a job than those without a history of interning. What these statistics do not reveal, however, is the types of positions that are available to experienced versus inexperienced workers.

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