Connect with us


Why Hiring A Fresh Graduate Is Similar To Investing In A Growth Stock

Why fresh grads in the market are like growth stocks.

Many people might think hiring someone with experience in the industry is always a better choice. This mindset has to change as fresh graduates now offer a lot more than just amateur manpower.

Here’s why we think hiring a fresh graduate is like investing in a growth stock.

#1 Lots Of Potential

Fresh graduates tend to have more energy, enthusiasm, dynamism and drive. Fresh out of university, the idea of working in the real world is an exciting opportunity. It signifies the start of a new phase in life and they would be keen to do well in their first real-world job. Entering with a fresh mind, these graduates offer different perspectives and creative ideas.

Similarly, a growth stock is one that has the potential to grow at a faster pace than the market. Like a fresh grad, there is so much potential for a growth stock to grow as compared to a stock that is a blue-chip.

#2 Competitive Advantage

Fresh grads are often preferred over someone experienced because they are affordable. This is widely practiced in the current investment banking environment. Expensive old guards are rapidly replaced by low cost graduate grunts produced en mass by universities around the world.

Education in university continues to evolve, giving graduates relevant knowledge and skills to operate well in an organization. They are also more tech-savvy and skilled in various fields. This provides greater returns per dollar paid.

Growth stocks are also value for money. Investors in growth stocks tend to believe that the fast growth of profits will drive up the price of the stock in the future, making it a steal to purchase the stock now, before the price goes up. This is especially so when the stocks become more valuable and attractive.

Read Also: A Basic Guide For Fresh Graduates On The Hunt For Jobs

#3 Relevance

Fresh grads are up-to-date. They know the latest technology and trends, what’s hot and what’s not. They provide angles and ideas experienced workers might not have considered. They are not afraid to try as they have not failed before.

Likewise, growth stocks are generally young and tend to be from sunrise industries. Industries which tend to have more growth stocks include technology, alternative technology and biotechnology. These are all sectors that have been gaining attention over the years and are becoming more relevant.

#4 Lack Of Track Record

Fresh grads are new to the industry, wide-eyed, with lower expectations. They don’t need a great deal of effort to satisfy their requirements.

However, the lack of track record also represents uncertainty. Someone experienced might not make the same mistakes a fresh graduate might make. You’re taking the chance on someone with little work experience. Their lack of track record means that you have minimal information on their capabilities, character, work ethic and attitude.

A growth stock shares the similar risk you face in hiring a fresh graduate. A growth stock’s value might jump around a lot more than a stock that’s a blue-chip would. Growth stocks tend to be from smaller, less-stable companies that are not as established yet. Unlike other stocks, growth stocks do not assure you steady dividend payouts.

It is a wise choice for companies to hire fresh graduates, as they could provide greater returns than you would expect. Unlike a stock, you will not be able to “sell” this fresh grad when they’re of higher value. However, a good, capable fresh grad makes a great long term investment. Choose the right one and you’ve invested in one of the best growth stocks available.

Read Also: 3 Ways To Make Your CV Stand Out In Banking And Finance

Top Image Credit:

Listen to our podcast, where we have in-depth discussions on finance topics that matter to you.