There was both joy and despair on display in Britain’s secondary schools yesterday as teenagers collected their GCSE results. But those higher up the education chain, those leaving university, face an even greater challenge now that they’ve earned their qualifications – to find a job.
The class of 2014 that graduated this summer are entering a tough recruitment market. But too few of these roughly 200,000 degree-holders will be hired by smaller companies, which tend to prefer apprentices and home-grown talent. Many business owners don’t attempt to attract these highly-educated job-seekers because they believe that ambitious graduates won’t fit in to small company culture or want to work for an SME.
Smaller employers could be missing out on great candidates who have the potential to hugely enhance their business. Research suggests that hiring more graduates could help plug the short-term skills gaps in firms, as well as improving longer-term management and leadership capability. And, in truth, many graduates would leap at the chance to work for a smaller company. Don’t forget almost 820,000 16 to 24-year olds are out of work at present, Government figures say. Yet, just one in five small firms has hired a worker from this age bracket recently, according to recent research by Sandler Training. Why? The same study found that three-quarters of small business owners said that they believe degrees are worth less now than they were ten years ago.
Why SMEs don’t like graduates
It seems perverse that employers complain that they can’t fill jobs with skilled candidates, while hundreds of thousands of young people are looking for work. Recognising that graduates are particularly under-represented in the SME workforce, the Department of Business, Innovation and Skills commissioned a report into small firms’ attitudes towards university-qualified recruits. It revealed:
- Small businesses undervalue the potential contribution of graduates to an organisation in terms of filling skills gaps, providing a fresh perspective, and bringing technical knowledge and expertise.
- Firms are often put off by the perceived cost of recruiting university leavers.
- Business owners sometimes question the appropriateness of graduates’ skills for their enterprise.
- Graduates are typically expected to have little or no relevant work experience, and SME bosses believe that they will take a great deal of supervision.
The contribution that graduates make
In fact, university-trained employees can be a huge boost to a small business, and provide new benefits to the operation at different stages.
- In the short-term, a graduate recruit brings a wealth of new knowledge, skills, and enthusiasm into the workplace.
- Academic evidence suggests that in the medium-term the areas of a business where graduates are employed are often better organised, experience higher levels of output, and greater examples of innovation.
- Longer-term, university-educated employees appear to contribute to better business performance overall, greater productivity and profitability, and higher levels of growth.
This is not to diminish the value to SMEs of hiring apprentices and training up young workers on the job, as we’ve outlined on this blog before. But small companies are potentially shooting themselves in the foot by dismissing recruits who’ve been through higher education, and who could bring a variety of different gifts to a business. A sensibly-run enterprise will achieve a happy balance between the two, and therefore potentially benefit from both approaches.
How to attract top talent
So, the arguments for hiring graduates appear to be very persuasive. But how can SMEs reach graduates in the first place? A good place to start is your local university, asking for the careers department or the knowledge transfer office. Alternatively, contact your local enterprise partnership – it should have a representative from the nearest university or higher education institution who will have more information on promoting vacancies to recent undergraduates.
There are various other initiatives that are designed to pair graduates with SMEs:
- The Graduate Foundation College is a scheme that helps train university leavers with ambitions to work in financial services in small and medium advisory firms. Participants receive 10 weeks pre-employment training before joining a business for at least six months’ paid work.
- Santander has also launched a project with 72 UK universities to link undergraduates with SMEs via internships that the bank part-funds. The objective is to teach both bright students and small businesses how they might benefit from working together.
- There are geographically specific examples, such as Yorkshire Graduates, which connects university leavers and SMEs in the Yorkshire region. Leicester Graduates fulfills a similar function in the East Midlands, and there are countless similar projects around the UK.
When describing the jobs that are available, SMEs should point out the autonomy that can be afforded to a young person working in a smaller business. Small companies with fewer staff mean that greater levels of responsibility are typically given to employees, and there’s the chance to make a significant input, and grow with the organisation. Graduates who have worked in SMEs often say that these aspects exceeded all of their expectations, and are a major reason why they prefer working for a smaller organisation than a larger one.
Will graduates run SMEs in the future?
While all of the evidence suggests SMEs should start taking graduate job candidates seriously, there could yet be an interesting twist in this tale. Perhaps soon it will be the graduates who will be doing the hiring in small firms. One in four of those going to university this autumn aspires to set up their own business when they collect their degree, according to research from HSBC. So, the next generation of graduates looks set to become the small business owners and employers of tomorrow. Perhaps when they’re in the boss’s seat, new university recruits in SMEs will become more of the norm. And, then, smaller firms can benefit both from bespoke apprentice talent and graduate know-how to create the smart workforce of the future.
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