industry/Business
Grim job outlook for class of 1971 Industry will hire 45% fewer new graduates, C&EN survey finds; only a few companies see an upturn in 1972 Bleak. The worst in 25 years. Gruesome. It stinks. That's how some chemistry and chemical engineering department chairmen across the country variously describe the employment outlook for their 1971 graduates. Unfortunately, most statistics point to the fact that 1971 is indeed shaping up as the worst job market in 25 years for new graduates in chemistry, and, to a lesser extent, in chemical engineering. Recruiting on campuses by many chemical companies is off by as much as 50%. Hirings of new graduates by companies are down about 45%. Department chairmen say job offers for this time of year are off 30 to 40% compared to last year. And only a few employers of chemists and chemical engineers are predicting an upturn in the job outlook in 1972. If there is anything positive to emphasize about this year's employment outlook from the point of view of new graduates, it's the speculation among some manpower observers that employers are holding back in making offers until later this spring when their business plans will have crystallized somewhat. This speculation will be tested soon, as the spring campus recruiting season draws to a close at the end of the month. Recruiting. Few 1971 graduates will remember the 1970-71 recruiting year with much nostalgia. A survey by the College Placement Council (CPC), Bethlehem, Pa., in late December 1970 showed that 1000 employers planned an average of 21% fewer campus visits this year. But since the Christmas recess, many companies which traditionally have fall and spring recruiting seasons have canceled their spring recruiting on campus because they were able to fill their job vacancies from fall recruiting. 16
C&EN APRIL 12, 1971
A recent survey by C&EN's Madeleine Polinger of 85 major employers of chemists and chemical engineers (including C&EN's Top 50) indicates that recruiting within the chemical industry is worse than CPC's average for all industries. Campus recruiting this year is off an average of 45% for 37 of 85 employers who provided usable data. Many employers have cut back recruiting even more substantially. Dow Chemical reduced its college visits by nearly 38% and its man-days on campus by 60%. Hercules cut back recruiting by 70%, Monsanto by 75%, and Rohm and Haas by 90%. Two smaller companies, BASF Wyandotte and International Flavors and Fragrances, say they cut their recruiting programs entirely. Only three companies—Chemetron, Standard Oil of California, and Kaiser Aluminum & Chemical—did not cut back campus recruiting. Not one company is increasing recruiting efforts. Unsolicited. Despite cutbacks in recruiting, many companies have received more applications, especially unsolicited applications, for chemistry and chemical engineering positions. Air Products & Chemicals, for example, has received three to four times the number of applications (compared to last year) for 16 positions earmarked for 1971 graduates, although it has reduced recruiting efforts by 25%. "The job market is extraordinarily tight," says chemistry department chairman Jack B. Kinsinger of Michigan State University, "and the morale of both our B.S. and Ph.D. students has been severely affected." MSU's chemistry department has written to small companies that ordinarily don't recruit on MSU's campus and to companies that have a tangential interest in chemicals and chemists. "We have been successful in uncovering some job opportunities," Dr. Kinsinger says, "but the majority of responses from our inquiries are negative." Dr. Peter B. Lederman, administrative officer in the chemical engineering department at Polytechnic Institute of Brooklyn, concurs with Dr. Kinsinger's assessment of the job market. Says Dr. Lederman, "The employment out-
look . . . is reflected in the students' attitude, which is one of being 'shell shocked.' They sense a credibility gap because [interviewers have] indicated they have no positions, and within a week the students have found advertisements in the technical or general press inviting applications by the same employers." But, he says, "Our graduates have had a few more offers in the last few weeks, indicating that perhaps companies have been holding back in hiring people." Hiring. Hiring plans as well as recruiting plans of most companies are off. CPC's year-end survey indicated that employers expected to hire 23% fewer graduates this year. C&EN's survey of employers shows that the number of hirings among companies will be about 45% fewer than last year. Dow Chemical says it will hire only 100 new chemists and chemical engineers compared to nearly 400 who were hired at its Midland location in 1970. Hercules says its number of hirings of new grads will be off 60%. PPG Industries anticipates that it will hire 50 new graduates, 35 to 50% fewer new chemists and chemical engineers than last year. Koppers will hire 50% fewer. Monsanto will hire 90% fewer professionals and Union Carbide will hire 40% fewer. Rohm and Haas will hire no new chemists and chemical engineers this year. In fact, only seven of 37 companies say that hirings of new graduates will be maintained at 1970 levels. And only two companies report an increase in hiring new graduates. Kaiser Aluminum & Chemical will hire more than it did in 1970, when it hired no new grads. Standard Oil of California says it will hire about 60 new graduates this year, compared to 50 last year. But Mobil Oil, Gulf Oil, Continental Oil, Ashland Oil, and Standard Oil (Ind.) will average a 60% decrease in hirings. The reason most often cited by companies for the decrease in number of hirings is the general economic picture. Other reasons mentioned: manpower reorganizations, reduced turnover because of attrition, and successful recruiting from previous years.
Very few of the companies surveyed by C&EN are willing to predict what 1972 will bring. Among those that will, only a few are optimistic. Standard Oil (Ind.) says that prospects appear to look much brighter. Dow Chemical also expects "things to shape up in 1972." Du Pont, which says that both its recruiting and hirings are way down this year, says it hopes to get back up to a reasonable amount of recruiting next year. But "it all depends on the economy/' says a company spokesman. A spokesman for PPG Industries reflects the consensus of companies. "It's too early to assess needs for 1972," he says, "but I'm not optimistic at this point." Crunch. Among the limited number of new graduates that industry is hiring, it's the Ph.D.'s who are experiencing the greatest crunch in job offers. (This was also true in 1970.) Twentyfour companies that supplied data to C&EN anticipate that they will be hiring about 550 new chemists and chemical engineers, only 10% of whom will be Ph.D.'s; masters constitute 20% of new graduates, bachelors, 70%. Not only are fewer jobs available, but starting salaries for 1971 graduates are at parity with or slightly down from last year. Notes J. Dennis
Ryan, head of the placement bureau ber of postdocs will be the same or at Carnegie-Mellon University, Pitts- will increase slightly. The number of burgh, Pa: "Many employers are of- postdoctoral positions at Cornell Unifering the same salaries as last year. versity will also increase slightly. Salaries will probably increase no Postdocs face a rough job market more than 2%, if they do at all." too and are registering at campus University. Many chemistry depart- placement bureaus in droves. At ment chairmen in a C&EN nationwide Stanford University, Palo Alto, Calif., survey of 39 chemistry and chemical en- for example, 23 postdocs in chemistry gineering departments are concerned had registered as of mid-March. that they will not be able to find satisAlthough many of the larger univerfactory positions for their graduates, sities are maintaining previous faculty especially their Ph.D.'s (about half of levels, many of the nation's smaller the B.S. recipients go on to graduate colleges that are normally a source of school and are not in the job market). jobs for new Ph.D.'s in chemistry are Of 25 departments which responded, experiencing an unprecedented belt most tell Mrs. Polinger that their fac- tightening. As of March 1, the Coulty positions are at the same level as operative College Registry, Washing1970-71, but at many schools the num- ton, D.C., which runs a placement serber of available postdoctoral posi- vice for more than 300 private liberal tions is slightly lower. Yale Univer- arts colleges and universities, had 742 sity will have fewer grant-supported Ph.D.'s (mostly 1971 Ph.D.'s) listed in postdoctorals in 1971-72 as well as chemistry for only 19 openings, a regisfewer faculty positions. The Univer- trant-to-vacancy ratio of 39. By last sity of Texas, Austin; Lehigh Univer- week, there were 819 applicants for 23 sity, Bethlehem, Pa.; Rice University, vacancies. In March 1970 CCR listed Houston, Tex.; and the University of 347 applicants and 29 registrants. Wisconsin, Madison, will have fewer Chemistry has the highest ratio of 23 postdocs this year, because of de- disciplines serviced by CCR. creases in federally supported grants. Engineers. Many chemical engineerStill, a few universities are buck- ing departments express considerably ing the downtrend. Although the Uni- more optimism for their chemical versity of Michigan will have one less engineers than do their counterparts faculty position in 1971-72, the num- in chemistry, although almost all agree that the outlook for Ph.D. engineers is poor. However, Dr. Joseph Marchello, chairman of chemical engineering at University of Maryland, expects all his B.S., M.S., and Ph.D. chemical engineers who are seeking jobs to find them, although he says that the variety and number of job offers are down. Notes Robert Bolan, OS. director of placements, University of PfZoOScr Of Southern California: "Chemical engiS&KÇtcs neers are in relatively better shape than many other [people in] scientific [and engineering] disciplines because of the increased interest in the environment." This year, he says, the Federal Government is actively recruiting chemical engineers for their environmental programs. But Carnegie's Denny Ryan disagrees: "You hear so much about the crusade on the environment, but I don't see this transmitted into jobs for the college graduate, at least not here at Carnegie." He believes that the job market for chemical engineers isn't as good as for electrical engineers and mechanical engineers. What does all this add up to? A grim year indeed for this year's gradÊ F leld Enterprises, Inc 1971 uating class. It seems almost a certainty that many 1971 alumni are destined to join the rolls of the thousands "This is from the top, Men!.. To emphasize the of scientists and engineers in the U.S. who are currently unemployed or unpositive, all press releases will refer to 'available deremployed. manpower' instead of xthe unemployed'! . . "
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APRIL 12, 1971 C&EN 17
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Drug firms face thorny problems in the 1970s A time of fewer new products, but greater research efforts. Increased sales, but lower profit margins. Di versification away from drugs, but de velopment of more major new drugs. This, in essence, is how Merck & Co. president Henry W. Gadsden sized up the 1970's for U.S. drug firms in a re cent C&EN interview. Mr. Gadsden, who turns 60 this month, has been chief executive officer at Merck since 1965. He was a vice president and a director of Sharp & Dohme when it merged with Merck in 1953. With 1970 sales up 10% to $747.6 million and net income up 11% to $113.5 million, the Rahway, N J . , firm itself is already off to a good start in this decade. The fact is that Merck and, for that matter, many other ma jor drug firms are still turning in good profit performances—in spite of the regulatory pressure brought to bear on drugs in the past decade. Efficacy. The pressure buildup be gan in 1962 with the Kefauver-Harris amendments requiring additional effi cacy and safety proof for new drugs. Although research spending by drug firms continued to increase at a 10%per-year pace during the 1960's, the number of new single chemical entity drugs brought to market yearly de creased from 46 at the beginning of the decade to nine at its end. Adds Mr. Gadsden, "Not only is it a more difficult problem to develop new drugs [today], but it's also more costly to bring them to market because more proof of efficacy and safety is required. Most of the new products brought to market in the 1950's were to treat symptoms of communicable diseases, or vaccines against them. We are
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C&EN APRIL 12, 1971
now trying to develop products to treat the cause of diseases and meta bolic disorders. The problems are much more complex. The reservoir of fundamental knowledge has been largely exploited and new basic knowl edge must be obtained." The higher cost of developing drugs and bringing them to market is caus ing drug firms to be more selective in their research projects. "There will be fewer me-too type drugs in the future," says Mr. Gadsden. As a result of these increasing costs, profit margins are shrinking and will continue to do so. World population is growing rapidly, however, and more people are being treated with more drugs as health services expand, he notes. So although prices will drop and profit margins will narrow, the market for drugs will increase. Diversification. The round of drug company mergers and acquisitions that began in the late 1960's is still continuing. The drug industry is sim ply following the pattern of all highgrowth industries where the less able companies eventually get eliminated, explains Mr. Gadsden. "Several have been purchased and some have shifted their product lines and no longer do much if any research for new drugs." Many recent drug company acquisi tions have been outside the drug area. Drug makers have moved via mergers into such areas as medical supplies and cosmetics where their marketing or research expertise might be helpful in broadening the drug firm's base. Most of the acquisitions have also been into areas of lower profit margins than drug companies have enjoyed. Merck's acquisitions, however, have been aimed at getting more mileage out of its scientific technology—for ex ample, its purchase of Calgon Corp., a maker of water treatment products. "Also our increased efforts in the ani mal health field point this up," Mr. Gadsden says. "The chemical com pounds Merck has researched may have use in human or animal health, water treatment, or as a fungicide." Such areas as water treatment and animal health are high-technology areas that produce specialty products. Has Merck considered moving into any commodity product areas? The drug firm would find it difficult, says Mr. Gadsden. "We wouldn't know how to compete and I would be scared to death to try. Besides growing in the environmental area, Merck will stay a major factor in h u m a n and animal health. We wouldn't know how to get out even if we wanted to."
