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What we can infer from Australian graduate employment statistics: The discrepancy between employers' expectations and graduate performance

Jane O'Leary
This paper examines graduate employment destination figures and concludes that Australian university graduates currently hold an advantageous position within the labour market in terms of actually obtaining employment and, subsequently, in the level of position appointed. Despite this, investigation of employers' perceptions of graduate employees' workplace performance suggests that, although graduates' knowledge and technical skills are considered, at very least, adequate, many employers have expressed dissatisfaction with their standard of transferable generic skills. This paper therefore argues that, if graduates are to retain their favoured position within the labour market, universities need to address the discrepancy between employers' expectations of graduates and their actual performance.


INTRODUCTION

Educational institutions have traditionally enjoyed widespread public support and a generally unerring belief in the intrinsic value of their services. However, in recent years, the appropriateness of the role of higher education and institutions' educational policies have come under increasing scrutiny. Embedded in this debate is the issue of whether higher education institutions are sufficiently attuned to the needs of employers and employees. This is particularly pertinent given the current furore surrounding competency-based training and the associated debate as to whether, and to what extent, universities have contributed to national economic decline through their failure to be relevant to students, the. nation's potential wealth providers.

This paper does not intend to digress into the competency debate or to laud or deplore the increasingly important role that economic rationalism is coming to play in higher education. However, the current tendency to view universities as avenues for employment preparation and vocational training, and the increasing client focus in Australian universities, suggests that some kind of examination into the current labour market for university graduates is warranted This research, therefore, seeks to examine the graduate labour market with a view to identifying the extent to which graduates are meeting their employers' requirements.

GRADUATE LABOUR MARKET STATISTICS

Although higher education provides both important social and cultural benefits to the individual and tangible contributions to national wealth, it should be recognised, that in today's economic climate, tertiary education for a particular individual does not automatically provide access to a successful career. The recent expansion of higher education, the increased numbers of university graduates, and the uncertain employment situation, raise questions about the absorption ability of the labour market.

In April 1992, the proportion of all new first degree graduates currently in full time employment had fallen to 44.7% from 57.7% in 1982 (GCCA 1993:5). Furthermore, Graduate Careers Council of Australia (GCCA) statistics indicate the proportion of graduates still seeking full-time employment had risen significantly, from 5.4% in 1982 to 18.6% in 1992. According to GCCA, the magnitude of this rise is to some degree concealed, as an increasing number of graduates are staying on to improve their qualifications [1].

HOW GRADUATES FARE COMPARATIVELY IN THE LABOUR MARKET

The reduction in graduate employment prospects over the past ten year period (see Table 1), is a response to the recession, the increasing numbers of university graduates seeking work, and the changing nature of the workforce itself.

Table 1: Activities of first degree graduates, 1982, 1987, 1992.

YearActivity
% Graduates Employed Full-Time% Graduates Still Seeking Full-time Employment% Graduates Studying Full-time
198257.76.020.3
198760.34.119.4
199244.79.724.7
Source: Graduate Careers Council of Australia l993, Graduate Destination Survey 1992: A National Survey of 1991 Graduates as at 30 April 1992, Graduate Careers Council of Australia, Parkville, Victoria.

Over the past ten year period, higher education participation and completion rates have escalated. In 1992,48 people per 1000 of the relevant population were participating in higher education compared to 36 in 1982 (see Table 2). The proportion of the population aged 15 to 69 with degree qualifications increased from 6.5% in 1983 to 9.3% in 1992. Additional statistics indicate the overall proportion of new graduates in the workforce to be increasing; between 1991 and 1992 this figure rose by 4.2% (GCCA, 1993:6). Since 1982, the number of students graduating from university has increased from 66 888 per year to a projected 120 000 in 1992 (DEET, 1993:46). This represents a percentage increase of 79.4%. In 1987, Dawkins' Green Paper based its planned objectives and goals on a graduate output requirement of between 100 000 and 145 000 by 2001 (p.12). These target levels were set in order to achieve enhanced international competitiveness at least and, at most, graduate growth levels comparable to the USA and Canada. Evidently growth of Australia's graduate output is well on target.

Table 2: Graduate course completions and higher education participation
rates (per 1000 of relevant population), 1982, 1987, 1992.

YearCourse CompletionParticipation Rate
198266,88836
198780,25740
1992120,000(p)48
Source: Department of Employment, Education and Training 1993, National Report on Australia's Higher Education Sector, Australian Government Publishing Service, Canberra.
(p): projected

A more accurate picture of the relationship between higher education and employment, can be obtained by comparing graduate unemployment figures against those of the general population. In Australia in 1991, the graduate unemployment rate was approximately 50% less than that for the general population: the unemployment rate for graduates was 4.8% while that for the total population was 9.5% (see Table 3). The employment growth rate for graduates in the period 1983 to 1988 was 30%, this far exceeding the total population employment growth for the same period of 12% (GCCA, 1988:6).

Table 3: Unemployment rate for graduates and the general population, 1987, 1991.

Year% Unemployed
GraduatesGeneral Population
19873.69.0
19914.89.5
Source: DEET 1993, National Report on Australia's Higher Education Sector, Australian Government Publishing Service, Canberra.
Graduate Careers Council of Australia 1993, Graduate Destination Survey 1992: A National Survey of 1991 Graduates as at 30 April 1992, Graduate Careers Council of Australia, Parkville, Victoria.

According to the Australian Bureau of Statistics, workforce participation rates are generally higher for those more highly educated. For example, in February 1991 the graduate workforce participation rate was 88.7%, compared with 65.4% for those with no degree (ABS, 1991.) Full-time rather than part-time employment is also much more prevalent amongst more educated workers. In 1991, 87% of employed graduates were working in a full-time capacity, compared with 82% of those with other post-secondary qualifications and 76% of those with none (ABS, 1991).

Statistics collected by GCCA provide further support for the advantageous position that graduates hold within the labour market. In February 1992, 5.9% of new graduates were unemployed, compared with 8.7% of tradespeople, 14.1% of secondary school seniors, and 14.2% of those who had not completed senior at secondary school (see Table 4).

Table 4: Unemployment rate by educational attainment, 1987, 1992.

Year% Unemployed
GraduatesTradeSeniorSenior Not Completed
19873.65.011.011.5
19925.98.714.114.2
Source: DEET 1993, National Report on Australia's Higher Education Sector, Australian Government Publishing Service, Canberra.

In addition, the industrial and occupational patterns of employment differ notably between those with varying levels of educational attainment. Workers with greater educational qualifications are concentrated in the fast growing service industries, while those with fewer educational qualifications are disproportionately represented in the slower-growing and retracting sections of employment. Furthermore, those workers considered "more educated" concentrate in the fast-growing white collar occupations, in contrast with "less educated" workers who make up the bulk of blue collar occupations (Maglen & Masters, 1993:16).

Further examination of Australian statistics relating to graduate destinations has allowed for inferences to be drawn regarding the value of the undergraduate degree for Australia's economy and for individual graduate employment. In a study analysing Australian graduate destination figures over the period 1978 to 1988, Chia (1989:24) concluded that, despite increasing unemployment figures across the population, graduates continue to maintain their advantageous position within the labour market and, consequently, the economic value of a tertiary degree has not fallen:

Although the unemployment rate of all leavers has generally risen over the last ten years, degree-holders tend to have been less severely affected. It was shown that the differential between the unemployment rates of young degree-holders and those with no post-school qualifications has, in fact, risen over the period (1977 1986).
Furthermore, international trends indicate that 'the number of jobs of the [highly skilled] type normally sought by young graduates is increasing significantly faster than the total employment...forecasts of manpower [sic] requirements have constantly underestimated the need for qualified people and the absorption capacity of the economy'(OECD, 1993:93).

Evidently, despite increasing graduate outputs and difficult economic times, graduates have maintained a privileged position within the labour market, and it is not implausible to suggest that this advantage may continue to increase if unemployment figures persistently rise and employers continue to raise applicant requirements.

EMPLOYER REQUIREMENTS OF GRADUATES

The Business/Higher Education Round Table (1991) has been pivotal in producing findings relating to both employer requirements and graduate performance in the workforce. The majority of B/HERT's and related studies have found that stakeholder consensus regarding desirable graduate characteristics is fairly consistent: generic skills are consistently ranked highly in desirable principal outcomes of undergraduate education.

Table 5: Summary of B/HERT desired graduate characteristics, 1991.

Desirable Characteristics, In Order
Communication Skills
Capacity to learn new skills and procedures
Capacity to make decisions and solve problems
Ability to apply knowledge to workplace
Theoretical knowledge in professional field
Capacity to work with minimum supervision
Capacity for co-operation and teamwork
Capacity to use computer technology
Understanding of business ethics
Broad background of general knowledge
Career motivation and ambition
General business knowledge
Specific work skills
Asian language skills
Source: B/HERT 1991, Aiming Higher, Commissioned Report No. 1, B/HERT, Melbourne.

In 1991, B/HERT conducted a series of interviews with key education and business leaders. The findings specified that graduates require 'a professionally orientated tertiary education, with a very strong concentration... on the development of skills in communication, thinking, decision-making and teamwork' (B/HERT, 1991:29).

The following year, B/HERT organised an additional round of surveys to identify those graduate characteristics considered by employers to be desirable for effective workforce participation. Professional knowledge was considered to be of less importance than the development of skills in communication, decision making, problem-solving, the application of knowledge to workplace, working under minimum supervision and the ability to learn new skills and procedures. During staff selection, those characteristics considered most desirable were a strong academic background, communication skills, motivation to succeed, ability to work in a team, initiative and decision-making skills, interpersonal skills and appearance and manner (B/HERT, 1992:21-22).

Comparable findings were reported by the human resources agency Coopers & Lybrand (1991) when a survey of employers from Queensland business and industry sectors was conducted. An 'employable' graduate was 'one who in addition to specific subject related knowledge has good oral and written communication skills, common sense, an ability to apply theoretical knowledge, is capable of decision-making and problem-solving and capable of working cooperatively in a team' (Coopers & Lybrand, 1991:7).

In the article, 'Ivory tower to concrete jungle', Candy and Crebert (1991) provide the reader with a concise summary of employer needs and graduate employability:

an employee who has developed 'high order procedures' (abilities to acquire new skills and to develop expertise in them; abilities to treat new situations as problematic and reach solutions that accomplish unfamiliar goals), and who accordingly can display adaptability, critical, and lateral thinking. (pp. 578-579)
In support of this, Bradshaw (1985) found that "over and above the skills and qualities which a degree indicates, firms are looking for skills in communication, co-operation and team work, and for positive personal qualities too" (p. 202). One business firm cited in this article identifies desirable fundamental qualities to be setting and achieving objectives, communicating and influencing others, solving problems and setting priorities, leadership/working with others and generating new ideas and better ways. In the same article, Bradshaw quotes Loacker, Cromwell, Fey and Rutherford (19c~4) who suggest that:
Competence in dealing with others is crucial to personal and professional success. A society that accomplishes the bulk of its work in consultation, discussion and debate, on committees and task forces, must depend heavily upon those members who can be effective in interpersonal situations. (p. 208)
Across different fields of study, comparable employer requirements of graduates have been expressed. Fairnie and Dring (cited in DEET & DPI, 1991:33) reported that agribusiness employers considered interpersonal and communication skills to be of greatest importance in employee selection, followed by business skills, technical skills and the ability to integrate different technical areas. Similarly, in the field of accounting, Zaid and Laing (1992:17-18) established that 77% of employers of accounting graduates considered communication skills to be the primary reason for hiring and firing graduate accountants.

Graduates currently working in their chosen field of study described similar employer requirements. According to the Pearce report (1987), when law graduates were asked to rate a list of work skills and areas of knowledge according to importance in their current position, those skills of a more general kind were consistently rated most highly: the ability to write clearly and effectively, to organise work, to make decisions, to 'ascertain relevant facts', to understand people's needs and viewpoints and give clients practical advice, were all ranked above 'know legal practice and procedure' (vol. 4, p. 101).

Clearly, employers in business and industry and graduates in the workplace desire a university curriculum which will enable students to leave university equipped with a range of transferable, generic skills. Inevitably, the question of whether or not universities are currently providing this arises.

EMPLOYER SATISFACTION WITH GRADUATES

Over the past few years, research investigating graduate placement and performance in the workforce has become increasingly prevalent, possibly in response to the highly prevalent perception that higher education represents an avenue for employment. B/HERT has consistently produced research documenting graduates, employers and employment issues. Their report entitled Aiming Higher (1991) was based on research in which education and business leaders throughout Australia were interviewed to establish key areas of concern within undergraduate education. The survey established that university graduates, although 'better than adequate' in theoretical knowledge and the capacity to learn new skills, are deficient in oral and written communication, making decisions and solving problems, and the ability to apply knowledge to the workplace (p. 29).

In a similar publication the following year, B/HERT (1992) found employers to be generally dissatisfied with the standard of generic skills exhibited by graduates. Graduates were considered to have attained very low standards in oral and written communication skills, logic, teamwork and the ability to relate to others (p. 12).

The same year, the National Board of Employment, Education and Training (1992) identified employment selection criteria used by employers, and found graduate performance to be deficient in the communication skills, social skills and the ability to apply academic learning to a work environment:

The results of our study suggest that the higher education system should provide greater opportunities for students to develop their communication and social skills, and their ability to apply academic learning to the workplace. (p. 18)
Finally, as a result of a 1993 survey, the Australian Association of Graduate Employers advised Vice-Chancellors of Australian universities to incorporate communication competencies in their curricula in order to address 'major deficiencies' in the communication skills of graduates. The association surveyed 150 of the largest private and public employers of university graduates. Results indicated that although graduate performance was generally high, the quality of graduates' written, oral and interpersonal skills was considered to be poor (Australian Association of Graduate Employers, 1993:21)

Similar criticisms were expressed by employers of graduates from diverse fields of study. Submissions from engineering graduate employers to the disciplinary review of engineering (Williams, 1988) frequently criticised undergraduate curricula and graduate performance. Engineering science course content was thought to be emphasised at the expense of problem-solving projects, and a general level of discontent was expressed with the perceived level of written and oral communication skills, and the lack of emphasis on work experience. This was considered particularly important at a time when there was pressure to increase the numbers of graduates in engineering, in response to a labour market demand:

The nature of the criticisms of the engineering schools certainly implied that changes in the curricula and attitudes and activities of the staff, could increase productivity of graduate engineers and make them more sought after. (Williams, 1988:35)
In the field of law, the Pearce report (1987) surveyed graduates and found between a third and a half of law graduate respondents felt law school emphasis on the ability to write clearly and effectively, the ability to innovate and solve problems, the ability to negotiate, and knowledge of the social context of the law was deficient (vol. 4, p. 143). Furthermore:
a significant number of respondents claimed that their laws school had in fact failed on both counts: it had managed to provide neither a worthwhile academic experience, nor an adequate background to professional practice. (vol. 4, p. 176)
After interviewing accounting graduates and their employers, Zaid and Laing (1992) established the following 'problem' areas in undergraduate education: application of theoretical studies, report writing, communication with others, comprehension of responsibilities, and teamwork. Graduates suggested these problem areas existed due to the lack of practical training in preference for theory based academic training and insufficient training in oral and written communication skills. In the Matthews report (1990), accounting graduates' particular concerns dealt with the 'use of lectures to present factual material, which is readily available from reference sources, instead of for the purpose of developing concepts, argument and methods of analysis... the separation of theory from procedures and practice... the use of tutorials to give solutions to problems and assignments rather than to discuss issue s and develop oral communication skills; failure to question conventional ideas and practices and to develop a sense of intellectual curiosity in students' (p. 207). According to this report, fifty percent of graduate accountants, forty-seven percent of employers and thirty-seven percent of academics believe that the accounting curriculum within Australian universities is primarily responsible for problems encountered following employment.

In agriculture, similar findings have been published. The Agrimark Survey (DEET & DPI, 1991) of employers of agriculture graduates pinpointed teamwork, interpersonal and communication skills as being those areas in which employers found graduate ability to be deficient. Private sector employers wanted graduates with technical ability, communication and interpersonal skills and practical ability.

Finally, submissions to the review of Australian medical education (Doherty, 1988) from consumer, community and employer groups, all expressed concern with competencies central to medical practice: communication skills, counselling skills, teamwork, and interpersonal (patient care) skills, and social awareness.

Evidently, regardless of discipline area, graduates in the workforce are consistently failing to meet employer requirements and performance standards. If this discrepancy continues to remain unaddressed, it is feasible that graduates may lose their advantageous position within the labour market.

CONCLUSION

Tertiary education exists for a variety of reasons, not the least of which is to provide a continuum between education and work. Employers are currently implementing procedures to enable an easier and more productive transition for both graduate and employer. In fact many larger organisations recruiting graduates on an annual basis are utilising graduate development programs.[2]

Universities' responsibilities for improving graduate employment prospects and transition have not been met so conclusively. Comments made by both graduates and employers regarding deficiency in generic skills, practical ability and application of knowledge within the workplace, reflect the inadequacy of the current undergraduate curriculum in offering opportunities for students to develop generic skills.

This paper does not seek to provide the answers, or even suggestions, for addressing this discrepancy. It does stress, however, that there is an urgent need for universities to recognise and address the issue of generic 'employable' skills. If they fail to do so, it is feasible that graduates may well lose their advantageous position within the labour market.

ENDNOTES

  1. In 1982 this figure was 20.3%, which rose to 24.7% in 1992: the difficult labour market is cited as a possible motive for these increased numbers in graduates continuing further study.

  2. According to the Australian Association of Graduate Employers (cited in Marginson, 1993:26-27), in 1991, 57 percent of organisations surveyed had utilised such programs. These programs were generally of two years duration and consisted of job rotation, structured graduate training, individually structured training and project work. Additionally, Zaid and Laing (1992) found that 50% of accounting firms had graduate development programs which allowed for the development of graduate generic skills.

REFERENCES

Australian Association of Graduate Employers 1993, National Survey of Graduate Employers, The Australian Association of Graduate Employers, Sydney.

Australian Bureau of Statistics 1991, Labour Force Status and Educational Attainments, Category No. 6235.0, Australian Bureau of Statistics, Canberra.

Bradshaw, D. 1985, 'Transferable intellectual and personal skills', Oxford University Press, vol. 11, no. 2, pp. 201-216.

Business/Higher Education Round Table 1991, Aiming Higher: Business/Higher Education Round Table 1991 Education Surveys, Commissioned Report No. 1, Business/Higher Education Round Table, Melbourne.

Business/Higher Education Round Table 1992, Educating for Excellence: Business/ Higher Education Round Table 1992 Education Surveys, Commissioned Report No. 2, Business/Higher Education Round Table, Melbourne.

Candy, P.C. & Crebert, R.G. 1991, 'Ivory tower to concrete jungle: The difficult transition from the academy to the workplace as learning environments', Journal of Higher Education, vol. 62, no. 5, pp. 570-92.

Chia, T.T. 1989, Has the Value of a Degree Fallen ?: A Cross Sectional Versus Time Series Evidence, Centre for Economic Policy Research, Australian National University, Canberra.

Coopers & Lybrand & Business Queensland 1991, Quarterly Business Survey: The Universities Question the Business Community, Coopers & Lybrand, Brisbane.

Dawkins, J.C. 1987, Higher Education: A Policy Discussion Paper, Australian Government Publishing Service, Canberra.

Department of Employment, Education and Training 1993, National Report on Australia's Higher Education Sector, Australian Government Publishing Service, Canberra.

Department of Employment, Education and Training & Department of Primary Industries and Energy 1991, Report of the Review of Agricultural and Related Education, 2 vols, (J. McColl, Chair), Australian Government Publishing Service, Canberra.

Doherty, R.L. (Chair) 1988, Australian Medical Education and Workforce into the Twenty-First Century, Committee of Inquiry into Medical Education and Medical Workforce, Australian Government Publishing Service, Canberra.

Fairnie, I. & Dring, D. (eds) 1989, Developing Tomorrow's Agribusiness Leaders: Proceedings of the First National Agribusiness Conference, Canberra, 1988, quoted in Department of Employment, Education and Training & Department of Primary Industries and Energy 1991, Report of the Review of Agricultural and Related Education, vol. 1, (J. McColl, Chair), Australian Government Publishing Service, Canberra.

Graduate Careers Council of Australia 1988, 1987 Graduates in 1988: A National Survey of Their Destinations as at 30 April, Graduate Careers Council of Australia, Parkville, Victoria.

Graduate Careers Council of Australia 1993, Graduate Destinations Survey 1992: A National Survey of Graduates as at 30 April 1992, Graduate Careers Council of Australia, Parkville, Victoria.

Loacker, G., Cromwell, L., Fey, J. & Rutherford, D. 1984, Analysis and Communication at Alverno: An Approach to Critical Thinking, Alverno Productions, Milwaukee, Wisconsin.

Maglen, L. & Masters, G. 1993, Education Issues: Two Papers Prepared for the Office of EPAC, Australian Government Publishing Service, Canberra.

Marginson, S. 1993, Arts, Science and Work: Work-Related Skills and the Generalist Courses in Higher Education, Evaluations and Investigations Program, Higher Education Division, Department of Employment, Education and Training, Australian Government Publishing Service, Canberra.

Matthews, R. (Chair) 1990, Accounting in Higher Education, Report of the Review of the Accounting Discipline in Higher Education, 3 vols, Australian Government Publishing Service, Canberra.

National Board of Employment, Education and Training 1992, Skills Sought by Employers of Graduates, Commissioned Report No. 20, Australian Government Publishing Service, Canberra.

OECD 1993, From Higher Education to Employment: Synthesis Report, OECD, Paris.

Pearce, D.C. (Convenor) 1987, Australian Law Schools: A Discipline Assessment for the Commonwealth Tertiary Education Commission, 4 vols, Australian Government Publishing Service, Canberra.

Williams, Sir B. (Chair) 1988, Review of the Discipline of Engineering, 3 vols, Australian Government Publishing Service, Canberra.

Zaid, O. A. & Laing, G.K. 1992, Problems Encountered by Australian Graduate Accountants During Initial Employment, Working Paper No. 14, University of Western Sydney, Macarthur, Sydney.

Author details: Jane O'Leary works in the education faculty of the Queensland University of Technology.

Please cite as: O'Leary, J. (1995). What we can infer from Australian graduate employment statistics: The discrepancy between employers' expectations and graduate performance. Queensland Researcher, 11(1), 15-27. http://education.curtin.edu.au/iier/qjer/qr11/oleary.html


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