Recent data from the Office of National Statistics (ONS) may have many people questioning the value of their degrees (if they hadn’t already). While 85% of those who are university educated are employed compared to 48% of those with no qualifications, they are now only slightly more likely to be employed than those with two or more A levels, whose employment rate is 83.5%
This is another blow after ONS data earlier in the year found that 27% of graduates are earning less than the average apprentice.
In recent years, employers have also been complaining about the quality of the graduate pool – or rather the lack of it. So why are the prospects of the average degree-holder no longer as rosy as they once were and could this be an opportunity for small and medium sized enterprises (SMEs)?
A poll from the Association of Graduate Recruiters (AGR) suggests that graduates aren’t putting the effort in when applying for jobs. 67% of companies said they had received applications from those who had recently graduated that were of “insufficient quality”.
However, a roundtable discussion organised by The Engineer, identified that a key issue – for engineering graduates at least – is competition and the way that jobs are advertised. Larger firms are have a greater presence at universities and more marketing clout, which means former-students are fighting over the same posts at these companies. Meanwhile the smaller, more niche companies are struggling to get enough applications to fill their vacancies, never mind choosing the best possible candidates.
In certain sectors it’s also been suggested that lack of experience is the issue. The EEF, the manufacturers’ organisation, estimates that around one million new staff will be needed by 2020 to replace those who are leaving e.g. retiring. From a recent business survey it says there aren’t enough STEM (science, technology, engineering or maths) graduates, but the main issue is that they don’t have the knowledge or industry experience that employers need. 79% of businesses who answered their survey said they want university courses to be designed to industry needs, so that the students are more employable.
Students have also recognised the importance of experience, with 63% of students taking part in the 2014 Student employability index believing that work experience and internships were essential to aid their future employment. However, only 47% had undertaken any.
The report, compiled by the National Centre for Universities and Business, surveyed over 4,000 students, asking about their job expectations and priorities. Other interesting findings include:
Interestingly, when asked about the most important factors in applying for a job, 65% said that the job should be in the area of their interest or passion and 62% said job satisfaction. Their preferences suggest that small businesses don’t need to worry about trying to compete with the graduate programmes of large businesses (only 22% said this was important) or that they can’t afford to employ graduates (just 36% earning potential was very important).
While many graduates lack substantial experience, they can offer:
A report by GTI Media, which examined the relationships between small businesses and graduates, found that 82% of businesses were ‘happy’ or ‘very happy’ with the graduates they had recruited. Half also thought that the quality of graduates was better than five years ago and that they didn’t have an issue retaining the ones they wanted to keep.
Indeed, the report Graduate Recruitment to SMEs suggests that small businesses undervalue the skills that graduates can bring to their business. These include increasing the intellectual capacity of the workforce, filling future or existing skills gaps and their technical knowledge contributions.
And if you think you can’t afford to employ someone who is degree-educated, the Student Employability Index found that most graduates have realistic salary expectations. You may also be able to benefit from support such as Knowledge Transfer Partnerships (KTPs). This is a programme that helps businesses to improve their competitiveness, productivity and performance by matching the skills of recently qualified workers with business needs. The government funds part of the project, which means results in lower costs for your business.
While many university-leavers will think larger businesses are more secure and better for their career prospects, according to the GTI Media report, 87% would be willing to start their career with a smaller employer and 93% would be happy to complete an internship or work experience with them.
As opposed to larger companies, SMEs are more likely to be able to offer:
One of the key issues is making graduates aware of your business as job prospect, so try to link up with university careers services or consider offering internships. The latter has the added benefit of enabling you to test out whether the students are a good ‘fit’ for your business.