Improving graduate employability in the professional services industry cannot be solved by universities alone. If companies aim to hire the best and brightest then they must play their part too. Turning up to a graduate jobs fair once a year and handing our leaflets is not enough, warns Dr. Madina Tash, Head of the Accounting and Finance Placement Programme and Director of the Bloomberg Financial Markets Laboratory at the University of Sussex.
We often hear news regarding the current pandemic’s impact on various sectors of the economy, not least financial services. However, less scrutiny has been paid to its impact upon students about to enter into the graduate labour market. Covid-19 has resulted in many cancelled internships and graduate programmes.
When the pandemic first broke many employers, including those in the professional services industry, were caught off guard by the lockdown restrictions and chose to prioritise time and resources to the adjustment toward remote working. Those firms that did retain their internship programmes faced complaints that virtual internships failed to live up to students’ expectations.
But, even before the pandemic, issues with student employability had been brewing for decades fueled in large part by the significant rise in student fees. Since 1998, student fees have increased in England by more than 900 per cent. Such a dramatic increase has caused major concern among students regarding their level of debt and the feasibility of repayment based on income. Universities are no longer just assessed by their academic achievements, but also their ability to link students with their future employers. Politically, the emphasis on universities’ ability to improve student employability is heightened due to both Covid 19 and the remnants of Brexit-related uncertainty.
When it comes to student employability, typically a degree has always served as a differentiating factor for selecting suitable candidates. Labour market economic theory dating back to 1976 coined this as “signaling” – when a candidate can signal his or her ability to perform to a potential employer with their degree. However, the economy has undergone a major transition between the 1970s and today and a degree is no longer a rarity. It is reasonable to assume that the signaling mechanisms in the jobs market may also have changed, especially for university graduates. The signal also starts to get lost when the proportion of students with a first class or upper second-class degree has increased at an alarming rate over the last eight years, with the Office for Students (OFS) admitting that grade inflation is a “significant and pressing issue”.
The situation with grade inflation was further exacerbated last summer when the proportion of students graduating with first-class degrees rose by a third. This inflation in first-class degrees makes it harder for applicants to stand out. At the same time, large conglomerate organisations that attract large amounts of attention from students – at times receiving thousands of applications for a handful of graduate roles. To process such a massive influx of application forms, CVs and cover letters some HR departments use Artificial Intelligence (AI) programmes to sift through the applications in a similar way to how Google navigates using specific key words. Applications that are selected are the ones with certain keywords, such as internship, shadowing experience, ACT/ACCA/ACA and other specific skills.
Technological advances, however, have transformed the way we work, and the skills required to work in various roles. For some employers, advanced MS Excel skills are no longer as impressive to employers as, for example, coding in Python and R. As a result, traditional business school curriculum often fail to keep up with employers’ expectations of the skillsets denying their graduates the opportunity to stand out from the remainder of their graduate cohort. Employability is often limited by academics’ own knowledge of current developments in the industry and their resultant failure to embed these into regular module delivery. One of the ways business schools can address this issue is by securing professional accreditations for specific modules, thereby mapping module content to topics covered in professional exams. Such alignments with industry practices improve the scope of the module curriculum, ensure relevance of module content, and improve student employability by creating early-stage awareness of the skills required by the industry.
Despite the pandemic, however, there are routes that business schools can take to improve student employability prospects. Use of evidence-based and experiential learning is a good way to convince prospective employers that students have a working understanding of practices and methods applied in the industry. It will also help students to gain an awareness of skills required to perform well in the relevant sector of the industry. From my experience, one of the ways of embedding experiential learning in regular module delivery is with micro-credentials such as Bloomberg Market Concepts. The feedback I have collected, including via the leavers’ survey, has demonstrated that the micro-credential has a positive impact on student employability. Simulation software can also provide students with an opportunity for experiential learning by clearly demonstrating in a live setting how specific processes change depending on students’ active decisions.
Ultimately, though, there is little universities can do about student employability without direct cooperation with the industry. Companies need to see cooperation with universities and the training sector as an investment in their future talent. Turning up once a year to a student career fair and giving out leaflets is not enough. It provides students with a fragmented and generic view of the company. They all appear the same with the primary difference appearing to be the geographical location of their offices.
Contact with universities should be sustained over a prolonged period of time. For example, over the course of the degree programme employers should deliver guest lectures, student visits to their offices, co-sponsorship of university competitions and sponsorship of stipends and scholarships. If companies aim to hire the brightest and the most talented then the task to improve student employability and close the social mobility gap has to be shouldered by companies too. The academic sector is unable to lift this weight by itself.
By Dr. Madina Tash, Head of the Accounting and Finance Placement Programme and Director of the Bloomberg Financial Markets Laboratory at the University of Sussex