When Bea Fields' daughter graduated from Duke University last year with a degree in public policy, she spent three months looking for a job. She applied for 70 positions and went on 10 interviews, but still couldn’t land a position. Eager to help, Fields decided to pay for a life coach to provide some direction for her daughter’s future career and help her succeed.
"You have to know how to network. The career coach helped with that," said Fields. Though the investment has yet to produce a salaried job, her daughter is working at a temp agency until she finds one. She referred three other parents to the same career coach she used to help their millennial children find a job.
It's no secret that recent college graduates are facing an unprecedented tough job market. About 60 percent of college graduates are unable to find full-time employment with a college degree in their chosen field, according to a 2011 economic survey conducted by Adecco, one of the world’s largest workforce and human resources solution companies. This has sent many of them heading back home to Mom and Dad. According to a March, 2012, report by The Pew Research Center, 29 percent of parents of adult children say a child of theirs has moved back in with them in the past few years because of the economy. Now, a group of savvy entrepreneurs — specifically life coaches and financial service providers — are springing up to provide services to this struggling group.
For the most part, their parents are footing the bill.
Jane Horowitz, a career coach in Chicago, has provided coaching services by phone to several recent college graduates of such schools as Washington University in St. Louis, the University of Colorado and the University of Michigan. She said this sector of her business is growing fast. Millennials "don't understand what a job search is or how to talk about their skills, strengths and qualities as it relates to the professional world," she said. For a flat $2,000 fee, she helps them understand their strengths and talents and how to express them in interviews and cover letters – and she works with them until they find a position. She says that since last August, she's helped 10 millennial clients land full-time jobs.
Most of her fees are covered by the parents, who view this as the last college course they have to pay for their child. The adult children are more likely to listen to her as a neutral party, Horowitz says, while the parents complain their kids tend to tune them out when they offer career advice. She's even working with a male client whose girlfriend's parents are paying for the services. Only one of her millennial clients is footing the bill on his own. He was working at a liquor store, a job he held all through college, but couldn't find a position related to his sociology degree. Horowitz says he chose to invest in a life coach instead of going to graduate school. "He felt lost not knowing how to use his degree." He is now working as the marketing associate for the city of Breckenridge, Colorado.
Dani Ticktin Koplik, an executive coach who volunteered to run workshops on “transitioning to the workplace” at her alma mater, Brown University, charges $3,600 for three months for her services. She also offers a less expensive eight-week tele-seminar called a "coaching gym," for $198. "There are a lot of parents who can afford this. It's a qualified niche," she says. Parents who have given their kids everything realize their children still need help and are eager to "give them the tools they need to succeed," through a life coach, which she says offers job seekers a key competitive edge.
The idea of parents investing even more money in an adult child who has yet to be financially independent may seem unusual. But experts say it isn't surprising for this generation of parents. They've done everything right and sent their kids off to college – and now they’re concerned their children don’t have what it takes to find a job and support themselves, says Kit Yarrow, chair of the department of psychology at Golden Gate University and author of Marketing to Gen Y. "Parents see this as a failure on their part, so they're willing to step up and finance another level of education," she said.
"Parents are paying for their child's cell phone. They may as well pay for a life coach," since they believe this will help their child succeed, says Morley Winograd, co-author of Millennial Momentum: How a New Generation Is Remaking America. "And unlike other generations, kids are happy to accept their parents' offer,” he said. After parents have spent enormous amounts of money on SAT tutors, college visits and assistance in crafting college admissions essays, "it doesn't surprise me that parents would look to this as an easy fix," said Sally Koslow, author of Slouching Toward Adulthood. Nor does it surprise her that entrepreneurs are looking to capitalize on the growing trend.
Financial services companies are also responding to millennials' lack of financial literacy. American Express launched a free financial boot camp geared to millennials called "LearnVest," with the tagline "Get Financially Fierce." Another service, SaveUp, which began in April, 2011, and now has thousands of users, creates incentives for college graduates to pay back their loans, with the chance to win prizes as they pay down debt. Unlike credit cards, which reward users for spending, "we're creating something where the more you save, the more you're rewarded," says Priya Haji, SaveUp's co-founder and CEO. The majority of users are 20 to 30 years old. The service, which is free to users, is funded by advertisements, banks and sponsors like Banana Republic, TurboTax and Game Stop.
"The millennial market in general, for all financial services companies, is extremely attractive," says Joan Cleveland, Prudential's senior vice president for business development. With millennials — the second largest group after boomers — poised to inherit $17.8 trillion from their boomer parents, according to a Prudential study, financial services providers see a huge opportunity to provide education and advice, she said. Prudential is working to reach out to this group, nixing the traditional ads that show gray-haired people strolling the beach in favor of visual images more relevant to millennials, and engaging more in social networking.
As boomer parents continue to "hover" over their millennial children, Winograd believes there will always be a market for services that promise to help children succeed. "This will be a lifelong occupation and obsession for those parents," he said.