BUSINESS SCHOOL STUDENTS CAREER PERCEPTIONS AND CHOICE DECISIONS

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1 David F. Miller Center for Retailing Education and Research Developing Tomorrow s Retail Leaders BUSINESS SCHOOL STUDENTS CAREER PERCEPTIONS AND CHOICE DECISIONS

2 About the David F. Miller Center for Retailing Education and Research The Center for Retailing Education and Research, located in the Warrington College of Business Administration, strives to develop tomorrow's leaders by stimulating student interest in retailing careers, preparing students for entry-level management, providing continuing education opportunities, facilitating communications between retailers and academics and researching retailing issues and opportunities. The Center develops and promotes research that can provide critical insights into retailers strategic decisions. Currently, the Center is undertaking a study on the early development of talent in the retail industry. As a part of this initiative, the current report addresses how business school students make career choice decisions - what their perceptions of retail careers are and how students make trade-offs between factors such as starting salary, work-life balance and career growth opportunities. Contact Information: Dr. Hyunjoo Oh, Research Director Phone: ext 1269 Website: 2

3 Executive Summary Objectives of the Study The study was aimed to understand 1) students career expectations, 2) perceptions of retailing careers and 3) factors that determine their career choice decision. Data Collection Method invitations were sent to all business school students at the University of Florida. A total of 162 business students at the University of Florida participated in the study Most of participants were juniors (41.9%) and seniors (51.0%). Key Findings While it appears that UF students have a more positive attitude toward retail career than student perceptions in previous studies, retailers need to keep working on disproving negative retail career images such as dull, boring and mundane. In general, degree-related/curriculum materials, work experience and exposures to firms on campus were the three most influential sources affecting students career choice. However, the sources that positively affected interest in pursuing retail careers were 1) exposures to firms on campus through info sessions and guest speakers, 2) former or current employer, and 3) personal experience as a customer in the order of importance magnitude. Friends working in the field negatively influenced interests in retail careers. The Y Generation cared about their career advancement the most. The opportunity for advancement was the most important career expectation, followed by work environment and challenging work. Communicating opportunities for promotion, future career progression and future earnings potential is critical for attracting talented future workers. Where to invest most efforts to recruit talent? Invest in developing structured internship programs Having a retail internship made students develop interest in pursuing a retail career and choose a retail career over sales and banking careers. Retailers should consider investing in internship programs to recruit talent. Many students (40.2%) had a part-time experience in retailing. Friends working in the field negatively affected interest in pursuing retail career. Word-of-mouth is a very effective marketing tool to college students. 3

4 Valuable internship experience followed by positive word-of-mouth can create great return on investment. Invest in educational support to recruit motivated talent Students did not think that leadership development programs would be of immediate benefit for entry-level positions. Instead, educational support significantly increased their evaluation of job attractiveness. More oriented toward learning, students put more emphasis on opportunities for career advancement and educational support. Retailers should consider offering educational support for motivated talent. Education support is not equally attractive to all job candidates. Students who valued work-life balance did not consider educational support attractive. Therefore, offering educational support options will attract only motivated talent. Because motivated college graduates are into their own career development, offering educational support should be aligned with the right strategies of retaining talented employees. 4

5 BUSINESS SCHOOL STUDENTS CAREER PERCEPTIONS AND CHOICE DECISIONS Background and Purpose of the Study The rapid growth of some retail sectors, the eminent retirement of Baby Boomers managers, the increasing sophistication of retailing (technology and internationalization) are increasing the demand for retail talent. One potentially important source of talent is recent college graduates. However, retailers face challenges attracting the best and the brightest due to the negative stereotype retail jobs -- long work-hours, low compensation and a low quality of work-life documented in recent studies (Rhoads, Swinyard, Geurts, & Price, 2002). To effectively recruit college students for management trainees positions, retailers need to understand the perceptions and career expectations that students have. The Miller Center for Retailing has undertaken this study on student career choice to help retailers develop better recruitment practices for attracting talent. The objectives of the study are to understand what expectations students have for their careers, how students perceive different career opportunities, and how their perceptions influence their career choice decision. Specifically, the current study was designed to answer the following questions: 1. How do business students perceive retail careers? 2. What expectations do business students have for their careers? 3. What factors determine retailing over other careers such as sales and banking? 4. Are there differences in career expectations, personality, goal orientations, competency skills and demographics among students who choose sale, banking and retailing as their destination career? 5. How do students make trade-offs between factors such as starting salary, worklife balance, benefits, training for development and opportunity for advancement? 6. Who influences student career choices? This report is based on a survey of 166 undergraduate business students, mostly junior and seniors, at the University of Florida. The data collection method and description of the sample are described in Appendix to this report. A. Perceptions of Retailing Careers KEY FINDINGS How do current business students perceive retail careers? Exhibit 1 indicates that students perceive retailing careers as people-oriented, competitive, hard work, hectic, rapidly changing, and involving significant management responsibility. However, they also do not perceive retailing career as contributing to the community, having good salaries, rewarding, challenging tasks, or fast promotion. 5

6 Exhibit 1. Perceptions of Retail Careers Q. Please rate the extent to which each statement describes your perception about a career in retailing (1: Not all or very slightly; 2: A little; 3: Moderately; 4: Quite a bit; 5: Very much). Attributes associated with retail careers Mean (current survey) Rank from Current survey Rank from Swinyard et al. (1991) Change in Rank People oriented Competitive Hard work Hectic Rapidly changing 3.5 n/a Significant management responsibility Repetitive 3.4 Lacking prestige 3.3 n/a Routine High growth 3.2 n/a Poor salary Creative/innovative 3.1 n/a Honest 3.1 n/a Stable 3.0 n/a Good training for professional 3.0 n/a development Interesting Socially responsible 3.0 n/a Challenging tasks Rewarding 2.9 n/a Fast promotion 2.9 n/a Limited advancement opportunities Mundane Long, unsocial hours Good salary Boring/not interesting Dull Contributing to a community 2.5 n/a slight change moderate change significant change 6

7 Swinyard, Langrerhr, and Smith s (1991) asked a similar set of questions about perception of college student perceptions of retail careers in Exhibit 1 also compares the rankings of 15 common attributes in their study and our study. The students in our study compared to the Swinyard et al study felt retail careers were higher on competitive, hard work, hectic, rapidly changing, and significant management responsibility. In addition, the perceptions of retail careers were lower on dull (ranked 1st in 1991 study, ranked the 15 th in our study) and long, unsociable hours (3 rd to 12 th ). The perceptions of significant management responsibility (moved from 15 th to 5 th ) and hard work (from 12 th to 3 rd ). The perception of poor salary has improved (from 4 th to 7 th ) as retailers have increased starting salary to be competitive compared to other job offers. On the other hand, the perception of challenging tasks is more negative in our study compared to the previous study (moved from 5 th to 9 th ) and the perception of limited advancement opportunities has not changed much (moved only from 10 th to 9 th ). In general, our study shows a more favorable impression of retailing careers. These differences may be due to increased competitiveness of retail environments, the fast changing technology, and increased financial accountability of managers. However, they may also be affected by differences in the students sampled. In what areas should retailers and educators work to improve perceptions of retail careers? Although the perceptions of retail careers appear to be changing in a positive direction, students still perceive retailing careers as repetitive and routine. Students do not perceive that retail careers offer good salaries. The perception of challenging tasks is more negative now than before (moved from 5 th to 9 th ), reflecting that current students demand more challenging tasks in their jobs. These results indicate a need for educating students on retail careers fast promotion and high earning potentials. The perception of contributing to a community was the lowest, suggesting that retailers can improve their public image of contributing to society. B. Career Expectations Career expectations indicate what kind of work and career students aspire to achieve. Thus, career expectations give valuable information for recruiting college students. Exhibit 2 summarizes the responses to 35 career expectation items. These items were grouped into categories based on a factor analysis. Students place the most importance on opportunity for advancement, followed by work environments and challenging work. Student placed modest importance on status including starting salary and the lowest importance on coworker relationship and social benefits. 7

8 Exhibit 3. Career Expectations Q. Please rate the extent to which each of statements is a consideration in your career decision (1: very unimportant; 2: Unimportant; 3: Neutral; 4: Important; 5: Very important). Career Expectations Mean 1. Opportunities for advancement 4.5 Opportunities for promotion/advancement Future career progression Future earnings potential 2. Work environments 4.1 Work-life balance Location of company/job Flexible working hours Pleasant working conditions Benefits 3. Challenging work 4.1 Doing an exciting work Doing a variety of things Doing a challenging work 4. Security 4.0 Being sure I will always have a job Being certain of keeping my job Being certain my job will last 5. Status 3.9 Obtaining status Being looked up to by others Gaining respect Starting salary 6. Leadership development 3.9 Leadership development Existing role models for projected career paths Profit/loss responsibility Training programs for professional growth The responsibility for significant business activities 7. Autonomy 3.8 Doing my work in my own way Making my own decisions Determining the way my work is done 8. Coworker relationship 3.7 Getting to know fellow workers quite well Developing close ties with coworkers Working closely with people 9. Social benefits 3.6 Being of service to society Making the world a better place Helping others 8

9 C. Business Students Career Choice among Sales, Banking and Retailing What career did students choose? The most common entry-level job positions undergraduate business students are in the fields of retailing, sales and banking. To understand the position of retailing careers compared to other common alternatives to business school students, the question of career choice among sales, banking and retailing was examined. The survey indicated that banking is the most preferred career choice for business students when only three options (sales, banking and retailing) were given. The altitudinal measure of career interests showed the same preference for banking. Q. Career Choice: Upon graduation, you will be launching your career in different fields. Assuming that you have the three choices (sales, banking and retailing), which career opportunity would you prefer? Mean Sales 24.1% Banking 48.8% Retailing 27.1% Q. Career Interest: After graduation, how interested are you in pursuing a career in the following areas? Mean Sales 3.83 Banking 4.30 Retailing 3.75 The following analyses address whether those who choose different careers differ in career expectations, personalities, goal orientations, competency skills, perception of retail careers, demographics, school year, gender, major and ethnicity). Are career expectations related to career choice? The analyses indicated that there were several differences in career expectations of business students who chose sales, banking or retailing (Exhibit 4). Students who had high expectations on work environments chose banking over retailing. Students with high expectations on security chose retailing over sales. Students with high expectations on autonomy chose sales over retailing. Exhibit 4. Career expectation affecting career choice Career Expectations Banking Sales Retailing Opportunity for advancement Work environment Challenging work Security Status Leadership development Autonomy Coworker relations Social benefits

10 Is personality related to career choice? Personality characteristics, summarized as the big-five personality traits, predicted career choice. The Big Five factors of personality traits are: Extraversion. The broad dimension of Extraversion encompasses more specific traits as talkative, energetic and assertive. Agreeableness. This dimension includes traits like sympathetic, kind and affectionate. Conscientiousness. People high in Conscientiousness tend to be organized, thorough and planning. Neuroticism (sometimes reversed and called Emotional Stability). Neuroticism is characterized by traits like tense, moody and anxious. Openness to Experience (sometimes called Intellect or Intellect/Imagination). This dimension includes having wide interests and being imaginative and insightful. The results suggest that students with high agreeableness have interests in pursuing retail careers while high on openness to experience are interested in sales careers. How does experience affects students career choice? Among students who chose sales careers, 6.7% had a retail internship experience, 55.6% had a retail part-time experience and 11.1% had a retail full-time experience. Among students who chose banking careers, 8.7% had a retail internship experience, 40.2% had a retail part-time experience and 12.0% had a retail full-time experience. Among students who chose retail careers, 21.7% had a retail internship experience, 50.0% had a retail part-time experience and 12.5% had a retail full-time experience. Having experiences in retail part-time jobs was common to all three career choices. Further analysis examined the effect of (1) having had a retail internship, (2) having had a retail part-time job, (3) having had a retail full-time job, or (4) a family member or significant other owning a retail business affected interest in a retail career. The results indicated that having a retail internship positively affected interest in pursuing a retail career and helped students to decide a retail career over sales and banking. Although many students had retail part-time experience, the part-time retail experience did not influence interest in retail careers or career choices. This finding suggests that retailers should consider investing in internship programs to recruit talent. How do demographics (gender, school year, major, ethnicity) affect career choice? School year and ethnicity had no effect on career choices. Female students were more likely to choose retailing over sales and banking. Management and Marketing majors were more likely to choose retailing over sales and banking than other majors. 10

11 D. Job Choice Simulation: Trade-offs Made in Job Choice Decisions Considering that students must make trade-off decisions among many attributes for their job choice, this portion of the study answered the following questions: 1. What is the relative importance of different job attributes (starting salary, worklife balance, benefits, training for development, opportunity for advancement as 5-year salary, career field)? 2. How do students make trade-offs between job attributes (starting salary, work-life balance, benefit, training for development and opportunity for advancement)? Using a conjoint analysis approach, student evaluated 27 different job profiles. Each of the 27 profiles was described on each of the six attribute listed in Exhibit 5 using one of the levels (either L1, L2, or L3). Students rated the attractiveness of each of 27 job profiles on an 11 point scale anchored by very unattractive and very attractive. Exhibit 5. Attributes/levels used in job profiles and the relative importance of each attribute Attributes L1 L2 L3 Relative Importance Career Field Sales Banking Retailing Starting Salary Salary in 5 years Benefits Work-Life Balance Training $30,000 $36,000 $42,000 $42,000 $65,000 $80,000 below industry average below industry average Basic skill development Industry average Industry average Basic skill development PLUS leadership development Among best in industry Among best in industry Basic skill development PLUS leadership development PLUS support for MBA/Master 10.1% 10.2% 30.5% 14.6% 14.8% 14.8% Relative importance of job attributes Based on an analysis of the ratings for the job profiles, the most important attribute for students was salary in five years followed by work life balance, training, and benefits. The least important were career field and staring salary. Exhibit 6 shows the estimated value student place on each job attribute. The total value of a job can be estimated by adding the weights for each attribute. For example, a sales job (3.0) with a $42,000 starting salary (3.1) and a five year salary of $65,000 (4.8), benefits below average (3.0), work-life balance among the best (4.2), and basic training plus leadership training (3.2) would be rated by students as On the other hand, a retail job (3.0) with a starting salary of $30,000 (3.0) and a five year salary of $80,000 (5.9), benefits among the best 11

12 (4.1), average work-life balance (3.0), and training plus educational support (4.2) would be rated The higher score for the retail job suggests that the student would prefer that job over the sales job even though the starting salary is considerably less. Exhibit 6. Job attractiveness utilities of attributes-levels Benefits-below average 5-year Salary at $80,000 5-year Salary at $65,000 5-year Salary at $42,000 Starting salary at $42,000 Starting salary at $36,000 Starting salary at $30,000 Retailing Banking Sales Training-PLUS educational support Training-PLUS leadership development Training-basic skill development Work-life balance-among best in industry Work-life balance-industry average Work-life balance-below average Benefits-among best Benefits-industry average 12

13 E. Sources Influencing students career choice decisions Exhibit 6 summarizes the sources influences student indicate on their career choices. Q. Regarding the career you chose, please evaluate each of the following sources regarding its influence on your choice of career (1: Not at all influential to 5: Very influential). Degree-related/curriculum materials were the most influential sources that affected career choice decisions, followed by work experience. The fact that exposures to firms on campus are the third most influencing factor suggests an opportunity for retailers to utilize campus resources such as classes and information sessions in order to reach out to students and influence their career choice. Direct experience through work, internships or as customers was more important than personal sources. Among personal sources, friends working in the field had the strongest influence on career choice. However, personal sources such as parents, teachers and career advisors had the least influence on students career choices. Teacher s and career advisor s advice may influence job choice rather than career choice. Exhibit 6. Sources of Influence Source Total sample Degree-related/Curriculum materials 3.7 Work experience 3.4 Exposures to firms on campus (e.g., info sessions, guest speakers) 3.3 Personal experience as a customer 3.2 Internship experience 3.0 Exposures to firms in media (e.g., TV, magazines, newspapers) 3.0 Friends working in the field 3.0 Company websites 2.8 Former or current employer 2.8 Parental influence 2.6 Family/relative working in the field 2.6 Teachers' advice 2.5 Career advisor's advice 2.2 There was no difference in sources influencing students career choice between sales and retailing. However, regarding the career choice between banking and retailing, different sources influenced the career choice. Parental influence, friends working in the field and degree-related/course materials were stronger for banking career choosers than for retail career choosers. But the influences of teacher s advice and former or current employer were stronger for retail career choosers than for banking career choosers. Because retailing was not set up for a degree program, education of retail careers from teachers might have made students choose retailing over a banking career. In addition, interests in retail careers were investigated to see whether different sources influence students to develop interests in retail careers. Exposures to firms on campus (e.g., info sessions, guest speakers), exposures to firms in media (e.g., TV, magazines, or newspapers), former or current employer and personal experience as a customer positively affected interests in retail careers. Friends working in the field, however, negatively influenced interests in retail careers. It is important for retailers to keep in mind that word-of-mouth is a very effective marketing tool to college students. Negative experiences with retail firms and retail jobs, regardless of internships, part-time jobs, or 13

14 full-time jobs, can be easily communicated among students. In order to make students cultivate interests in retail careers, retailers need to utilize exposures to students through diverse outlets such as info sessions, workshops and guest speakers. Work cited: Kim, David, Scott F. Markham and Joseph D. Cangelosi (2002), Why Students Pursue the Business Degree: A Comparison of Business Majors Across Universities, Journal of Education for Business, 78(1), Rhoads, Gary K., William R. Swinyard, Michael D. Geurts and William D. Price (2002), Retailing as a Career: A Comparative Study of Marketers, Journal of Retailing, 78, Swinyard, William R., Fred W. Langrehr and Scott M. Smith (1991), The Appeal of Retailing as a Career: A Decade Later, Journal of Retailing, 67(4),

15 Appendix Research Method Research Method invitations soliciting participation in the career choice study were sent out to all business school students at the University of Florida. As an incentive, $25 was provided to 20 participants who best answered an estimated score for a Gator football game. A total of 186 business students responded to the invitation and 162 students completed the Internet survey. As might be expected, students who participated in the study were mostly juniors and seniors, who might have seriously thought about their career upon graduation. Freshmen and sophomores consist of only 7.1% of the sample. Table 1. Profile of study participants (N = 162) Demograph % Questions included in the survey are: ics Gender Female Career choice among sales, banking and retailing Male Career expectations School year Freshman Sophomore Junior Senior Evaluation of job attractiveness of 27 job profiles Major Ethnicity Finance Management Marketing Others White African American Asian Hispanic Other Core competence skills (people skill/motivation, problem solving, planning/execution, confidence and retailing experience/knowledge) 5. Personality traits (Shorter version of Big- Five) 6. Goal orientation (performance approach, learning approach, avoidance) 7. Interest in pursuing a career in sales, banking and retailing 8. Sources Influencing career choice 9. Perceptions of retail careers 10. Experience in retailing: Internship, part-time, full-time, family/other business 11. Demographics: age, gender, year, major, ethnicity 15

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