Business leaders think graduates are unprepared for work

New research from tech startup Multiverse finds that 70% of senior leaders at larger companies do not believe the current higher education system is delivering necessary work skills.

Multiverse surveyed 600 bosses at companies with more than 50 employees in March 2023 to ask their opinion on the talent pipeline.

Three in five executives at larger companies declared they learned more valuable skills during the first two years in the workplace than they did in university. Despite this, Multiverse uncovered that the majority of firms still ask job seekers to list a degree on their application.

Below, we explore the results in more detail, and look at how a skills-based approach to recruitment might be the solution.

Higher education drops out of favour amongst young people

Multiverse estimates that the average graduate needs more than 11 months of on-the-job learning before they are fully ready for the world of work, despite completing at least three years of higher education.

According to the survey’s respondents, UK universities do not sufficiently teach durable soft skills like teamwork and leadership. They also do not offer enough courses that link to real-world experiences in the workplace.

It’s likely that many graduates will agree with this assessment. The idea that a university degree is not worth its weight has been gaining traction amongst young people. Our report into graduate salary expectations in March found that uni leavers in the UK now expect to earn over £5,000 more than the average starting salary.

In part, the disconnect between younger workers and their older managers could be described as whiplash from the sudden shift between pre- and post-COVID ways of working.

Overnight, UK offices and workplaces have moved online. Virtual meetings are now the norm, while hybrid work patterns mean colleagues can be working ‘together’ while hundreds of miles apart. The ramifications of this change have not yet been fully realised by bosses.

The result is a less-experienced group of employees who are learning crucial soft skills, such as communication and teamwork, through a computer screen. Line managers are blaming their reports, arguing that Gen Z is the most difficult generation to work with..

Employers are aware of university bias. So why do they still ask for a degree?

Four in 10 of the businesses Multiverse surveyed predict that higher education will matter less for applications in the next five to ten years. Nonetheless, 54% of all business leaders surveyed admitted to still having degree requirements in place.

Together, these findings suggest that asking for a university degree has become an old habit that refuses to die hard.

Hiring managers may be reluctant to let go of time-honoured recruitment practices. They might have inherited their company’s recruitment criteria from a predecessor.

Whatever their thought process, it seems that change is in the air. Last year, the number of companies setting a 2:1 level degree as a minimum qualification in job adverts dropped below 50% for the first time, according to the Institute of Student Employers (ISE).

Euan Blair, CEO of Multiverse, said: “The university system is far removed from the realities of the workplace and there’s little to no correlation between academic grades and job performance. Yet many businesses still require a degree to open the door to the best jobs.

“We need to completely rethink our relationship with education. The idea that a three or four-year degree is enough education for a three or four-decade career has passed.”

Hiring apprentices named as top alternative method for combatting the skills gap

Multiverse reports that 67% of business leaders back on-the-job learning (such as apprentices or internships) as the best way of developing skills for the workforce. In fact, they are 36% more likely to back this growth tactic over higher education.

Earlier this year, research found that the work of apprentices totals over £550m in cost-saving or revenue-generating activities for the UK’s 1.4m estimated employers.

Large-scale schemes, like the Amazon Apprenticeship Fund, have become popular amongst SMEs. This is especially true in the face of the UK’s developing digital skills gap.

A shortage of tech workers has proven particularly disastrous for growth plans, leaving many firms unable to invest in job-ready AI talent. As a result, managers are hiring from abroad, aiming to plug the gaps by issuing global talent visas to foreign workers.

Of course, in the current hiring crisis, UK employers might pale at the idea of taking on new staff – even low-cost trainees. Outside of apprenticeships, Multiverse says there are other, practical steps companies can take to develop the skills of their workforce.

It recommends that companies design job adverts which look beyond academic success. It also suggests embedding on-the-job learning programmes, in order to future-proof the workforce and prepare for emerging in-demand skills.

“The future of learning is working,” Blair predicts. “Instead of relying chiefly on the higher education system, businesses should prioritise training programmes that run throughout someone’s career.

“This will be key to unlocking business and economic potential, and creating a much more diverse group of future leaders.”