Graduate Crisis – War for talent & War for jobs
On the surface skill shortage and graduate unemployment make no sense. Across all major markets companies will report not being able to access enough talent and attribute significant budgets specially to graduate hiring strategies. On the flip side, many graduates and often including those with top grades struggle to start their careers successfully. One could argue this is not logical and hence can be easily fixed, however the unfortunate reality is, it is logical and it can`t be easily fixed - the issue is multidimensional and much more complex than it appears.
One of my readers asked me about my take on graduate unemployment and what could be done about it. I needed further information and did some research around what the figures tell us.
Let’s look at the UK, the US and Europe - the general unemployment of graduates in the UK in 2014/2015 was 4.3% according to HESA. This doesn’t sound too bad but digging deeper you will find that just about 60% of those employed are employed on a full term permanent basis.
In the US the unemployment rate of graduates is hovering just over the 5 %, similarly to the UK it has quite a spread depending on the actual field of study. Considering that the general unemployment in the US is about 7% one could argue that 5 % is not such a bad of a result.
Figures across Europe on a whole will be similar though vary greatly from country to country. There is a significant North – South divide across Europe, often the figures though are heavily skewed by the general macro-economic performance of specific countries.
Field of study
Throughout the last decades the potential fields of studies have multiplied and universities have become very creative in implementing new degrees. I am sure they are doing this with the best intention, to deliver talent for the employment markets. Very often though the graduates struggling the most seem to be the ones graduating in one of these new degrees, although graduates with traditional degrees in subjects which don’t translate easily into the corporate world seem to struggle even more.
In the US the largest unemployment rate – over 7% which is 40% higher than the average – is amongst graduates with degrees in geography, anthropology, media, environmental studies, earth science, art history, fine arts, English, ethnic studies and political science.
This brings me to the second largest challenge for graduates, the ability to prove that they can apply their theoretical knowledge in the corporate environment. This can be connected to the field of study but is more often connected to the way how we teach students at universities and most importantly who teaches them. In many cases if not in most of the cases, university teaching staff have had their careers solely within the university environment. Whilst this might be great from a research and development point of view it explains the universities lack of understanding about what the corporate world wants.
Additionally, university courses are strictly planned in today’s world and don’t leave much time to collect extracurricular experience whether that’s long term internships, student jobs or voluntary engagement. This produces graduates with excellent academic achievements who may have a couple of very short internships on their CVs but with no real relevant understanding of the corporate world. Whilst these graduates again come with impressive academic achievements they lack reality where they stand on the corporate leader, what`s expected of them, how to successfully interview for a job and how to navigate the corporate environment in general.
Language & Location
Lastly, required talent is not necessarily based where it is needed. Significant parts of the global economy is driven by medium sized companies which are scattered across, very often, very remote locations whilst many leading universities are based in major metropolitan areas. There is also a global dimension as visa requirements may make it impossible to import key talent or for key talent to move where their skills are required. This is further exacerbated by language. Yes, most graduates speak a decent command of English these days but a lot of corporates struggle accommodating talent not speaking the local languages.
Too many graduate
Between the seventies and today the number of graduates has four folded which has resulted in an oversupply of graduates. Rise in quantity often leads to a decline in quality, regardless whether the latter is the case or not, the economy has not created enough graduate level roles in the same time. Additionally, many people graduate these days without the necessary academic strengths and this leads to them graduating with sub-standard results hence they struggle in the employment market.
We need a complete re-think about the expectation of graduates. Top academic education should be attained by the ones with strong academic backgrounds, many have their strength more on the practical side and they should pursue further training in that direction. Attending university is an opportunity to live life to its fullest standing on one`s own two feet. This entails deciding carefully what to study, ideally something solid and not fancy and a subject which easily translates into business and further to aim to generate self-funding for university through work experience. It doesn`t matter whether the job is in relation to what one wants to do in future or not, the practical experience gained will be invaluable. I would also recommend getting some good internships in the field of ones desired career if possible, ideally abroad considering globalisation is a reality in the corporate world. With regards to “live life to the fullest” I mean to explore oneself, go abroad, make mistakes, build your network, discover new cultures, do something good and have fun. With this graduates will have come a bit closer to knowing what they want, what they are good at and what their strengths and weaknesses are. They will be able to prove they can succeed in the working environment and will have built a network which will ease the start into their professional life.
Universities need to seriously reconsider whether what they teach has relevance to the employment markets. One must ask whether it would be sensible to clearly divide between research and teaching for most subjects, but teaching staff is my main concern. Many miss working experience in the corporate world, completely so the question then is how can they include top level executives into their teaching programs. The emphasis must be on attracting top level executives into universities to spend some time sharing their knowledge and experience. Lastly, the focus needs to be on the return to quality and not quantity. This will not be possible though if university funding is directly linked to the number of students who pass through their doors.
Hiring managers need to re-define which roles really require a degree. It seems to become more and more the standard that roles require degrees, very often there is no objective justification. I am also missing corporates taking a more active role in the higher education sector. This could be done via funding, involvement in curriculum design, supply of senior leaders to teach and so one. Lastly, I see the main culprit as being the selection processes. Often, especially large corporates, seem to struggle with large volumes of applications. They then tend to get through them using automated processes such as filters by grade, university name, key word filters and so on. As a side effect many highly qualified candidates for a role might never make it in front of the hiring manager because their CV wasn’t optimised for some algorithm and was subsequently filtered out by the software. Even if this is done manually you will find that staff involved in graduate recruitment are very often the most inexperienced in an HR department. Spotting talent requires time and experience, companies who have answers to all of the above often don’t struggle with graduate levels at all.
My take on it
The system is clearly broken and the solution isn`t simple. It would require international corporation, teamwork between the corporate side and the education sector to achieve a complete re-design. Unfortunately, I can`t see how that can be achieved especially at the moment as the focus of the political agenda is on very different topics.
Unfortunately, publicly available survey & statistics seem to have quite a time lag. Most figures I could find are from 2013/2014/2015. This is not as up to date as I would wish but as they paint a clear picture this will suffice.