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#GEC12: Rowan Foster, SME Survey Results
- 2. Context Large companies represent only a fraction of the opportunities available for graduate employment, yet are disproportionally popular in terms of graduate applications. Universities should reflect on how students’ perceptions of employment with small and medium-sized companies could be improved. Wilson Review 2012 “Starting salaries “The average graduate starting salary remained stagnant are expected to at £25,000 in 2010-11; however AGR members predict remain unchanged an increase of 4% for 2011 to £26,000” for a third year – AGR Winter Review 2012 at a median of £29,000” “Starting salaries have remained largely stagnant with High Fliers the median starting salary for first degree graduates in Graduate full-time employment remaining at £20,000” Market in 2012. Destination of Leavers from HE 2009/10
- 3. The Survey Conducted online during April 2012 Small/Medium Enterprises (SMEs) i.e. businesses with fewer than 250 employees 185 respondents across the graduate network representing all England's regions and sectors Range of sizes within the SME bracket i.e. sole traders up to businesses with 50-249 employees.
- 4. Graduate Recruitment Expectations How many graduates do you expect to recruit into your organisation over the next 12 months? 90% 80% 87% of 70% employers plan to 60% recruit 50% graduates Past 12 months 40% Next 12 months over next 12 months, 30% compared 20% to 64% recruiting 10% over the 0% past year. 0 1 to 4 5 to 9 10 to 24 25 to 49 Number of recruits
- 5. Graduate Roles Available What types of roles will you recruit graduates for? Majority of graduate roles over the next 12 Permanent months will Temporary be Paid Internship permanent, Unpaid Internship with 20% Work Experience some form of internship.
- 6. Reasons for Not Recruiting No graduate level roles In the current Other economic climate employers Graduates lack relevant experience are not recruiting staff at all, Graduates lack employability skills including graduates . Graduate expectations were too high 0% 10% 20% 30% 40% 50% 60%
- 7. Recruitment Marketing Methods Which of these methods to attract graduates have you used in the past/would you use in future? Social media Used in past Recruitment University careers fairs Would use in future methods are changing. Internship/work experience scheme Greater use University careers service of internships and social Company website media, less use of print Job board/site ads and recruitment Recruitment agency agencies. Print advertising 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
- 8. Qualities of a Successful Candidate Which of these things do you think is most important when recruiting a graduate? Positive attitude SME employers Degree subject prioritise attitudes and Other skills for the role over degree grade Work experience and institution. Degree result University attended 0% 10% 20% 30% 40% 50% 60%
- 9. Graduate Starting Salary What salary would you pay to a graduate fresh out of University? £25,000+ SME graduate £22,000 - £24,999 employers outside of £20,000 - £21,999 London offer a £18,000 - £19,999 salary of between £15,000 - £17,999 £15,000 and £12,000 - £14,999 £18,000. Up to £12,000 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
- 10. Perceptions of Graduate Skills 100% 90% 80% 70% 60% Strongly Agree 50% Agree Neutral 40% Disagree Strongly Disagree 30% 20% 10% 0% Graduates benefit my Graduates have good Graduates have good Graduates have good business technical skills communication skills employability skills
- 11. Benefits of Graduate Recruitment What benefits do you think graduates can bring to a business? Introduce new ideas SME Give specialist knowledge employers see Produce future leaders graduates as bringing Strengthen staff resources fresh ideas and Questions established practice becoming the next Increase productivity generation of leaders Up-skill other workers Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
- 12. Questions? • How can SME's compete for the graduates, without the high salaries that others offer? • Do SME's need to think differently about the methods they use to recruit graduates? • Is there an issue around employer perceptions of graduates that universities, graduates and job brokers must act to address ? • Do we need to invest in more research on the 'real' graduate labour market?
Editor's Notes
- Importance of SME's becoming greater focus of universities. Recent press around graduate job applications increasing and need to look outside of usual blue chip companies. Wilson Review noted importance of graduates considering SMEs, as one of its recommendations. Number of graduate recruitment surveys look at employers intentions to recruit over the coming years = provide an indicative picture of health of the outlook for grad labour market. And attract lot of press. But how representative are they? Just as Sir Tim Wilson highlights need to look outside of blue chips for graduate jobs can we add to the grad lab mkt picture by looking outside the usual sources for our information? Example here is of recent data on graduate starting salaries. Generally consistent view of the market = stagnating wage levels but salary data widely disparate = AGR £26k, High Fliers £29K and DLHE £20k. How does this occur? AGR survey biennial survey of of members looking at their graduates vacancies and recruitment practices. Members tend to be large graduate recruiters recruiting to larger blue chip London companies. High Fliers report based on data from top 100 graduate employers – named in a poll by final year students. List of these published by The Times. Issue = known by students so Tend to be big London-based firms. DLHE accounts for fact that many students are employed outside of London and outside of the traditional 'graduate employers'. Therefore = lower. Gap in evidence – and student/grad awareness – reports form student expectations of job/ salary etc. = less willing to go for SME. Aim of our survey = to present picture across regions & smaller companies. The 'real' graduate labour market.
- These are employers we have reached through the graduate network which means they have recruited graduates in the past so may not be representative of all SME employers – but for purposes of finding out about views on employing graduates they are the best sample. NB: small numbers mean not possible to break down much of the data. Unweighted data so all figures are indicative Employer size profile doesn't match overall profile Regional profile not right either. Might suggest a need for more robust research
- High Fliers predict a rise in graduate recruitment by big firms in 2012 – almot half of their employers expect to recruit more graduates in 2012 with more than a quarter planning to maintain their intake at 2011 levels. By contrast AGR data suggests a small fall in vacancy levels of 1.2% but do recognise that some sectors are planning to increase recruitment significantly e.g. construction, engineering, industry. Our survey data of SME graduate suggests that these employers are increasing their recruitment on the past 12 months. Over one third of employers said that they recruited no graduates over the past 12 months but just 13% said they wouldn't be recruiting over the next 12 months. The proportion planning to recruit any number of graduates this year is 87% compared to 64% of employers who recruited graduates in the past year. These are positive signs, although they don't plan to recruit in large numbers with the majority recruiting between 1 and 4 – an increase of 23 ppts on the past 12 months. Similarly the High Fliers report suggests a 6.4% rise in vacancies so not huge numbers and still below pre-recession levels.
- 56% of all the roles that graduate employers are offering in the next 12 months will be permanent roles, 15% will be temporary and around a quarter will be some form of work experience or internship opportunity. Perhaps not as many permanent roles as we'd like to see. Of the small number of internships that will be offered – two-thirds would be paid.
- We saw earlier that the vast majority of SME graduate employers plan to recruit graduates again next year. But we took the opportunity to ask the minitory that don't, what the reason for this was i.e. was it to do with the graduates or with the state of the economy? This chart shows that both for those employers who did not recruit graduates last year or who do not plan to this year – their reasons are primarily related to the position of the business rather than any negative perceptions of graduates. (have banded the data together to create sufficient numbers. The reasons given by those employers answering 'other' primarily related to the financial climate and lack of funds for recruitment, interestingly one did say that they had recruited apprentices instead – perhaps a question to add for next year's survey? These are businesses who have employed graduates at some point in the past – because we reached them through the graduate network – so we can be encouraged by the fact that these businesses see little wrong with graduates employability skills and their experience. Although other non-graduate employing SMEs may differ in their responses.
- This chart shows the methods the SME employers used to recruit graduates over the past 12 months and those they plan to use over the coming 12 months. Over time, there are some clear changes in the declining use of traditional methods such as print advertising and recruitment agencies. Perhaps because these are also the more costly methods. We see more employers planning to use social media for recruitment purposes which is very interesting – are SME employers set up to use these methods, do they know how to make best use of new technology? One thing may need to bear in mind with these types of method is whether they address an issue of awareness of opportunities in small companies. Print ads and agencies may reach a wider audience. More employers plan to use internships and work experience schemes as a recruitment tool, perhaps as a chance to have a trial run, to allay and concerns on either side. Potentially very useful for employers who have fears about recruiting young people. Perhaps surprising to see that two-thirds/three-quarters say they have attended university careers fairs in the past and plan to in the future. No statistically significant difference in change over time. Suspect these must have been the larger SME's – should we see more of this in the future?
- This question asked employers to select which of these 5 factors were the most important when recruiting a graduate. Can see that by far the most important is a positive attitude and that work experience, which we often hear 'young people can't get work without work experience' is not the most important factor that we may think it is. Larger employers often use degree result to filter high numbers of applications but these results may suggest that they do not prioritise the degree grade and university attended to the same extent. They seem to prioritise relevance to their work i.e. through degree subject and a good attitude. Many employers found it hard to choose one thing that was most important – as demonstrated by the 'other' category. Of this group the answers they gave commonly included a mixture of the factors on this list i.e. degree result and positive attitude, mixture of a few things such as results, degree subject, attitude, career aspirations etc. Also a number of employers mentioned communication skills as being important. Worth mentioning that in a graduate survey we did recently with grads with a Yorkshire connection, graduates thought that the most important factor employers were looking for was work experience. 49% grads thought work experience is most important factor compared to only 14% of employers in this survey.
- As we've seen this is quite a bit lower than reported in High Fliers and AGR and also than the DLHE stats. Suggests that DLHE average data is boosted by these very high salaries paid by large companies. What are the implications of this? 86% of SME employers in this survey offer a salary of below the £20k reported in the national press. Graduates' expectations are likely to be a lot higher and this may make the prospect of working in an SME less appealing to them.
- Included this slide because this shows the views of SME employers that have recruited graduates in the past and may plan to in the future but they have fairly inconclusive views about graduates' skills. We can see from the first column they can see business benefits from employing graduates but there is no real sense of agreement about what skills graduates have – see figures below... If graduate employers can't articule graduates skills is there a problem??
- This expands the finding from the previous slide that employers see business benefits of employing graduates – it explores what benefits these are. These employers see business benefits from recruiting graduates. The main reason is that they bring new ideas and a fresh perspective on ways of working. They have the latest knowledge and also important employers see graduates as essential new resources boosting staff resources and creating the leaders of the future. These are all useful qualities and skills that graduates can use to sell themselves to employers. Also information that graduate job brokers, careers services, universities and recruitment agencies can use to make the business case for employing graduates to SME employers. Personally I think the apprenticeships lobby has done a fantastic job of creating a business case for employing apprentices and quantifying the returns to employers. Need something similar for graduates? For interest we also asked this question to graduates in our Yorkshire survey and they tend to emphasise introducing new ideas and the benefit of their subject knowledge whereas employers are more pragmatic and interested in strengthening their workforce and producing future leaders. My interpretation: employers see grads' future potential whereas grads think they have everything employers need now. This is reflected in the 'other' responses from employers about being about the train them up and to back fill for promoted workers, and grads 'other' responses about energy, enthusiasm.
- Q1. I think potentially worth more research for following reasons: These are smes already turned on to the idea of recruiting graduates so need to know more about all SME's attitudes and intentions towards graduates' Can see that the picture we have painted of graduate labour market is quite different to that of traditional sources – need more research of this kind to act as a counterpoint? Would be useful to be able to break down by sector, size of employer, location etc. Agree? Can we work together to address that? Q2. Seen that SME's intend to recruit more graduates this year. Also know anecdotally that some find it hard to recruit the right people. Common issue – AGR report says that nearly 1/3 businesses failed to fill all their vacancies in 2010-11 due to candidate drop-out, perceptions of specific industries and lack of applicants with right skills. But can be a particular issue for SME's around lack of graduate awareness of what they offer and what they do – 99% businesses are SMEs but when grads hear about 'graduate employers' and meet them at careers fairs they're not SME's. We've seen they offer lower salaries – how can SME's recruit the best? Q3. Seen that ways that SME employers intend to recruit graduates is changing, maybe due to costs but fewer plan to use print advertising and more social media – if lack of awareness if a problem are these the best methods? Need to get together to create a presence? Q4 . These are SME's who employ graduates and plan to again in future don't seem have a great view of them and their skills – is this data an anomaly or a broader problem of perception – need to get graduates & unis to communicate their skills better to employers especially risk averse SME's?