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Is small really beautiful for you?

Published: Saturday, 12 February 2005   Category: Life after graduation | Graduate Job sector Reports

A company's size may dictate the resources and opportunities for its graduate trainees. David Williams reports

They're small, they give great responsibility and they're crying out for graduates. That's the theory anyway. But are SMEs - small and medium-sized enterprises - really the future of graduate employment?

The case for graduates and SMEs sounds good. Small businesses need management and other higher-level skills to compete, goes the argument. By employing a graduate they get someone hot from university, fresh with cutting-edge knowledge and techniques, and filled with the enthusiasm to apply them.

In return, the graduate gets real responsibility in a close, supportive environment where he or she can see the difference made. Everyone wins, and everyone grows together, creating wealth and spreading opportunity for all.

If this sounds overly optimistic, the contrary case sounds deeply cynical. Sceptics claim the powers-that-be are making a virtue of a necessity. Knowing there is an over-supply of graduates and that many would be ending up in SMEs anyway, an SME skills gap was invented for graduates to fill.

"There are lots of untested assumptions made about the need for graduates in SMEs," says Luke Pittaway, lecturer in entrepreneurship at Lancaster University Management School and co-author of soon-to-be-published research on graduates and SMEs. "What we did in our study was ask owner-managers what they thought of graduates. The results showed that it is questionable whether there is as large a demand for graduates as the policymakers like to believe."

Luke's study looked at only one industry sector - tourism, hospitality and leisure - and a single county (Surrey), but because all legal businesses in this sector have to be registered for food safety, this meant he could approach them all.

At base, he found that the smaller the firm the less interest the owners had in employing graduates. There was only a need in the medium-sized operations (those with more than 50 employees) and in those that were growth-orientated. The trouble was that the majority of SMEs in the study were tiny firms with fewer than ten people.

"Because so many SMEs are microbusinesses employing fewer than ten people, the skills gap for graduate labour is likely to be significantly less than is generally thought," continues Luke.

"The owner managers of these businesses actually have a negative perception of recruiting graduates. They thought graduates wouldn't like working in the business; the business didn't need them; and graduates wouldn't fit in with the workforce. It wasn't surprising then that most of the graduates we found in SMEs were clustered in a few large medium-sized firms."

All of this appears to be bad news for anyone who thinks that SMEs (at least in this sector) are a good place to start a graduate career. However there are other ways of seeing the situation.

Sally Bassett is enterprise development manager for the East Midlands Development Agency and in charge of Get On With Graduates, a scheme which places graduates in SMEs.

"Frankly, we're not just in it to help the graduates," she admits. "Our aim is to improve the skills base of small businesses across the region. Placing graduates in SMEs is an obvious way to do this, and what we've found is that when the right graduate is matched to the needs of the organisation the results are spectacularly good."

While Sally accepts that some owner-managers are simply not interested, she and her team have found that many businesses do have a need for higher-level skills.

"We've found that SMEs want graduates with skills in three broad areas: specific technical know-how; marketing and PR skills; and expertise in logistics and manufacturing processes," she says. "All parties benefit when the right fit is made. The business gets the skills it needs along with someone who is enthusiastic, quick-to-learn, and relatively inexpensive, while the graduate gets to make a real difference immediately - something that would take years to achieve in a bigger organisation."

And in a point that is also made in Luke's report, Sally argues that the reason SMEs and graduates don't appear to want each other is more to do with perception.

"Most SMEs just don't have the resources to attract the right graduates," she says. "They can't even begin to compete on the milkround with the big companies. They might not even have the human resources skills to run a recruitment campaign. They don't get the service they need from the agencies. As there is no way they can attract graduates, many of them dismiss the whole idea.

"Graduates respond to this apparent lack of interest in them by seeing SMEs as a last resort. What we do is break down these barriers by providing a free matching service, and the results have been impressive. We have placed more than 550 graduates now and all the SMEs involved have reported a positive experience. It isn't that SMEs don't need graduates. It's just that they have difficulty sourcing them."

Case study

Learning new things every day

Emma Ap-Thomas is 22 and graduated from the University of East Anglia with a BA in English literature. She wanted a career in marketing and Get On With Graduates matched her with Win Marketing in Loughborough.

"I didn't know it was possible to learn so much, " she says. "It's only a small firm with six people plus the director, but I'm picking new things up every day, and everybody here wants to move things on.

"I think they were interested in someone like me because they wanted to improve the firm's written communications and with my degree in English and interest in marketing it was a good match.

"I'm not being paid a fabulous amount, but it's worth it in every sense for the amount of exposure I'm getting to the business and to marketing methods. I'm also hoping to do an Institute of Public Relations qualification with the firm."

Source: Saturday February 12, 2005
The Guardian

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