Student employability and business collaboration
By Mike Cherry
Many business owners believe a skills shortage in the UK is holding back the economic recovery. Getting the right person with the right skills is critical to a business’s growth prospects, especially in a small firm where the right employee can make a much more significant impact compared to those in a larger business. A company can’t expand existing production, make the most of new opportunities, or even maintain current output without a supply of skilled workers to draw upon.
The issue of the skills shortage is made stark by new research published by the FSB. This found more than a third (37%) of the small businesses questioned view a lack of skilled workers as a barrier to growth, up from a quarter (25%) in the previous year. That view was further reinforced by a recent inquiry by MPs from the All-Party Parliamentary Group Small Business Group, which found a clear link between a lack of skills and low small business productivity.
Part of the problem lies with the supply of employees with higher level qualifications. The UK Commission for Employment and Skills found that businesses believed that employees with higher level qualifications were better prepared for work than other education leavers. However, businesses are still struggling to fill vacancies because of a lack of skills, making it clear there is more work to be done to incorporate work based skills in university courses that benefit business.
As the Chartered ABS and CMI highlighted in its ‘21st Century Leaders’ report, the possession of higher level skills brings with it an expectation that the employee will add particular additional value to a firm. Graduates are more likely to be required to demonstrate knowledge competency as well as workplace skills such as communication, problem-solving, and self-management – all important skills for working in small businesses where as a necessity, employees will be expected to multi-task.
These expectations are not always met, and it raises the question of where responsibility lies for developing these skills and preparing graduates for the world of work. There is no doubt that universities are responsible for teaching core subject knowledge, and for the graduates themselves to develop a rounded set of skills. But the FSB recognises that businesses also have a role to play in supporting students to develop workplace skills.
One means to do so is work experience. Work experience can be an important bridge for students to better understand what employers expect, how businesses operate, and the career opportunities available. As universities expand their offer to students, they are engaging with businesses to provide placements to students through a mixture of internships, formal placements and sandwich courses. Work experience is also an important tool in connecting students with small businesses and career opportunities they have not previously been exposed to. For many, however, the ‘milk round’ will give them exposure to only the largest employers, not the huge range of businesses operating across the economy.
We want to see this practice of work experience become the norm across the education system - involving smaller businesses to a far greater extent. Recognising the importance of creating these links with the education system, the FSB has partnered with Young Enterprise to help young people to be enterprising and develop the skills essential in the workplace. Connecting young people with small businesses exposes them to the issues new and small firms face, as well as exposing them to opportunities once they leave school.
Business schools are also in a great position to help bridge the gap between education and the business community. Small businesses make up over 99 per cent of UK businesses and harbour nearly 50 per cent of the private sector workforce, yet as noted earlier, students are more likely to recognise larger firms who dominate the ‘milk round’. There are two broad means by which business schools can help change this situation.
First, business schools are able to expose students to the challenges and opportunities small businesses face on a daily basis. Undertaking work experience with a small business enables students to put their knowledge into practice and develop workplace skills that will add value to a business.
The added spillover benefit of such exposure is to encourage students to look at setting up their own business as a career option. Research from Santander found that almost a quarter of students run their own business or plan to start a business at university, with an estimated collective turnover of over £44 million per year. Business schools, working with employers, are well placed to provide guidance and support to student entrepreneurs, focusing their offer and opening the door for small businesses to support these nascent ventures. The Small Business Charter should be a particularly useful tool in supporting student and graduate enterprise.
The second aspect where business schools can engage is again through the Small Business Charter, an initiative the FSB strongly supports. Business schools signed up to the Charter support enterprise and engagement. Through their programmes they can work with local firms in raising their performance. More businesses are already purchasing services from business schools in workforce CPD and training. They are also making use of business school facilities, contacts, staff and students to innovate, and test products and services.
To maximise this opportunity, small businesses need to be aware of the opportunities for collaboration from business schools and the resources they offer. The FSB has been promoting the Charter to our members to raise awareness. Likewise, business schools also need to be proactive in reaching out to businesses to engage and raise awareness of what they offer. Encouragingly, there are already good examples of business schools bringing these businesses together through events, communicating regularly through newsletters and offering opportunities for collaboration. This will have a knock-on effect on student exposure to, and interaction with, small business.
To summarise, through effective engagement and collaboration between businesses and business schools, we believe there is a wealth of opportunity to support student employment, develop graduate skills useful in the workplace, and support business and local economic growth. On the FSB’s part, we are committed to making this work, and look forward to developing those relationships with the business schools to ensure it does.
Policy Director – Federation of Small Businesses