It’s something we have known for a while, that industry finds the graduates universities are churning out unsuitable for the jobs they are offering. That there is a mismatch between what’s being taught and the skill-sets industry needs. The market has an oversupply of people with low-level skills, while there’s a shortage of those with advanced, high-level proficiencies.
Now, the Chartered Global Management Accountant, a global accounting body, in a study titled “Addressing the employability crisis: reconnecting education, skills and jobs” confirms this disconnect. The report says that youth under-employment has reached critical levels in most G-20 economies and yet many employers cannot find enough people with the skills they need to grow their businesses.
There are also disconnects, the report goes on to say, in the widely accepted logic that education provides skills and skills enhance employability. Having earned degrees to enhance their employability, many graduates are now under-employed or jobless because there is not enough demand for their skills.
Andrew Harding, Managing Director, Chartered Institute of Management Accountants, UK, which is one of the partners for this study, says in an interview to
Technology-driven The report, which polled 300 companies globally, says the financial crisis and the subsequent slowdown may be the immediate cause of the scale of this employability predicament. However, there are deeper trends causing seismic shifts in the workplace. Relentless advances in technology continue to drive innovative new ways of doing business. Working lives will be longer and the digital age will bring further change.
Young adults, says the report, need to be better equipped to gain rewarding employment. While the report focuses on the developed world, Debasish Biswas, Country Head, India, CIMA, says the expertise mismatch is reflected in the Indian business environment as well.
Harding points to the huge training facilities established by Indian IT majors for new recruits as an example of the mismatch between industry needs and what students learn. “There’s a disconnect between the labour market and the choices students are making when they go in for university courses. So they are not gaining the educational skills that employers want. Those programmes may well exist; the fact is universities are not talking to students about employability. Is the programme they choose going to get them the skills to get a job? What we need is for students to make informed choices, better educational planning and better advice.”
Structural changes The report points to a significant trend that can impact the jobs market as well. Generally, as economic growth recovers after a recession, employment picks up as well. This time, however, structural changes caused by advancing technology could lead to a jobless recovery, even in many developed countries.
Harding says there’s a need for businesses to get closer to educators and start to redefine the agenda. “Educationists can be conservative and can work hard on the reputation of their institutions. But if the effort is on publishing in academic journals, they can’t focus on the skills of students. Today, students can go online and search for specific programmes that will give them the skills that business wants in a way a university might not. This can undermine the relevance of their courses. These universities rely on their reputations to attract students and, once their reputation is lost, they cannot get it back again,” he explains.
The CGMA report goes on to outline what employers, policy makers and educators can do to align themselves with industry needs.
It says that if educators do not provide training in skills that enhance employability, some may be sidelined as new ways of providing education emerge to meet market demand. These include workplace education and a combination of theory and practical experience. In the UK, for instance, some of the ‘big four’ accounting firms offer school-leavers an opportunity to combine academic and practical learning by training under apprentice-type schemes for professional accountancy qualifications. This can be an attractive alternative to going to university, the report points out.
Multiple competencies Referring to the employability situation in India, E. Balaji, President, People Services, TVS Logistics and Services, says that, unlike China, India has lagged behind in creating more manufacturing jobs. The IT and BPO industry, which employs over 2.5 million people, is now focusing more on productivity and also higher-margin businesses, which reduces need to more people. “High levels of automation in the call-centre industry and now in the IT industry mean less additions to the company payroll,” he points out.
Companies are increasingly looking for competencies at multiple levels when hiring talent. “In the finance and accounting roles, organisations are looking for professionals who will play the navigator’s role in assisting the business. Today’s CFO is a co-pilot to the CEO. Even at the junior and middle management levels, they expect employees to develop an awareness of the larger issues. Candidates who have the competencies are in demand and companies are willing to pay a premium to hire such talent,” elaborates Balaji.
CIMA, being an accounting body, its focus of training is on the finance sector. Elaborating on how today’s managers need the right skills, Harding says finance professionals need to understand business and communicate, not just on the accounting side, but how a decision impacts business. “They need to join the dots. Traditionally, we had accountants who were in the backroom; today, they have to understand how the whole business works and communicate; the skills they need are very different from traditional accountants. Today, what we need are people who can help businesses take decisions and look at the future.”