Employer Satisfaction with Graduate Skills

Research Report

ACNielsen Research Services

99/7

February 2000

Evaluations and Investigations Programme Higher Education Division Department of Education, Training and Youth Affairs

©Commonwealth of Australia 1998
ISBN 0 642 23973 8
ISBN 0 642 23974 6 (online)
DETYA No. 6442HERC00A

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without permission from AusInfo. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Legislative Services, AusInfo, GPO Box 84, Canberra ACT 2601.

The views expressed in this report do not necessarily reflect the views of the Department of Education, Training and Youth Affairs.

Executive Summary

The study & objectives

ACNielsen Research has conducted a two-stage research project to establish the extent of employer satisfaction with the skills of new graduates entering the labour market, and areas of dissatisfaction.

The first qualitative research stage consisted of 12 focus groups with employers and graduates, and six in-depth interviews with industry representatives.

The second quantitative stage consisted of a mail survey of employers who had recruited a new graduate in the last two years. They were recruited and screened by telephone before being mailed a self-completion questionnaire. A total survey sample of 1105 employers was obtained on which this analysis is based. A further 155 telephone interviews were also conducted with employers who had tried to recruit a graduate but who had been unsuccessful.

Main findings

The main results from this study are as follows:

Overall performance

Overall, the performance of new graduates employed appears to be reasonable, neither particularly low or high. The performance ratings given to new graduates employed, across the twenty-five skills and attributes tested, ranged from 3.2 to 4.2 out of a possible 5.0.

However; the performance of new graduates who had applied for positions but who were considered unsuitable was poorer, their ratings were between 2.9 and 3.9 out of 5.0.

Perceived suitability of applicants

A large proportion of applicants for positions are considered to be unsuitable, even for other positions within the organisations; overall this unsuitable proportion was 76.5 per cent.

This level of unsuitable applicants was highest amongst larger businesses (85 per cent) and lowest amongst the smallest businesses (69 per cent). Given that the larger businesses also received the largest number of applicants, they must be spending a great deal more time and effort on screening and selection of suitable candidates.

The level of unsuitable applicants was highest in the hospitality industry and amonge students from the services/hospitality/transport fields.

Skill deficiencies

Taking into account the relative importance of the skills to employers, the greatest skill deficiencies among new graduates were perceived to be in the areas of:

• creativity and flair;
• oral business communications; and
• problem solving.

Creativity and flair were the most important of all the skills tested, yet they received only a relatively mediocre performance rating (3.5 out of 5.0 for the last graduate employed, lower for the rest of the applicants). Oral business communications and problem solving skills received the lowest ratings of all skills yet were both quite important to employers (4.3 out of 5.0). These three skills show the greatest performance shortfalls, given their importance to employers.

Several of the highest rating skills were not at all important to employers, particularly customer focus and the ability to benefit from on-the-job training.

Unsuccessful applicants

Unsuccessful applicants, like the successful applicants, under-performed most in creativity and flair and oral business communication skills, but they were much more likely than the successful applicants to also lack the capacity for independent and critical thinking. This skill is of great importance to employers and seems to be the skill that most sets apart successful from unsuccessful applicants; in other words, employers value this skill and can find it but it is rare.

Skill deficiencies

The skill deficiencies most commonly cited by employers themselves are:

• a lack of communication skills;
• a lack of interpersonal skills; and
• a lack of understanding of business practice.

Study sector

Across all skill areas tested, the University sector produced higher rating graduates than the TAFE sector.

Field of study

Graduates of engineering and surveying courses (from both the University and TAFE sectors) were perceived to be poor in many skills, particularly at problem solving and oral business communications which employers consider important but also in interpersonal skills and (among TAFE graduates) numeracy and oral business communication.

Graduates from services/hospitality/transportation courses (primarily from the TAFE sector) performed well in a number of skill areas, particularly in computer skills, understanding of business practice, capacity to handle pressure, numeracy and oral communication. They were the highest rating TAFE graduates.

The highest rating graduates overall either had arts/humanities/social sciences qualifications or business/administration/economics qualifications and these were likely to be from the University sector.

Occupation

University graduates appear to be performing best as associate professionals while TAFE graduates who are employed in these positions are receiving much poorer ratings. The best rating occupational groups originating from the TAFE sector were labourers and related occupations, whose graduates were reported to be mature, had good computer skills and high potential given on-the-job training.

Industry

There does not appear to be an industry in which University graduates perform well across all or most of the skill areas while TAFE graduates employed in the hospitality sector are given high ratings, higher than their counterparts employed in other industries.

The industries mostly likely to have given graduates lower ratings (relative to other industries, not necessarily poor per se) appear to be retail, wholesale and manufacturing, but the pattern by industry, particularly among University graduates, is not very strong.

Size of business

Larger businesses consistently rated their new graduates more highly than smaller businesses, confirming our hypothesis that this may be the case due to the resources they are able to put into recruitment and their ability to attract the best graduates.

Preference for graduates

The survey confirmed that employers’ main reasons for recruiting graduates (as opposed to non-graduates or those with work experience) were:

• to enable them to train that person in the organisation’s procedures;
• because they are more trained/educated/better;
• to provide tomorrow’s managers; and
• to introduce new ideas or fresh thinking into the organisation.

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