Graduates bring added value to business. Phil Baty analyses a comprehensive survey that challenges employers' claims of inadequacy with evidence that employers value degrees

New evidence has shattered business leaders' claims that today's graduates are woefully ill-prepared for the real world of work. Industry chiefs such as Sir Colin Marshall, the Confederation of British Industry president and Chris Humphries, the Training and Enterprise Councils' policy leader, have queued up to condemn vice chancellors for failing to prepare their distinguished alumni to make an immediate, effective contribution to the economy.

Tales of personnel managers who sift through reams of indistinguishable CVs only to employ anti-social graduates who cannot count or spell must now be very familiar to Sir Ron Dearing and his committee of inquiry into ÖйúAƬ. Sir Ron has made no secret of his desire to hear the voice of business when he remoulds ÖйúAƬ for the millennium.

But in what has been described as "perhaps the most comprehensive survey ever undertaken on employer attitudes", researchers have re-affirmed that a degree educated employee brings tremendous added value to a business. Yes, key numeracy, literacy, information technology and communication skills are crucial, but the unique "sparky" blend of intelligence, flexibility, and adaptability that is already being provided by a degree education is the key to success in the new, dynamic and uncertain workplace.

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The survey, Graduates' Work: Organisational change and students' attitudes, was carried out at the centre for research into quality at the University of Central England with funds from the Association of Graduate Recruiters, the Department for Education and Employment and the Council for Industry and ÖйúAƬ. Based on 258 interviews in 91 organisations covering both public and private enterprises of varying sizes, the report is already on its way to Sir Ron and next week will be the focus of a conference co-sponsored by The THES, the CIHE and London University's Institute of Education. It is set to re-establish the graduate as the dynamo best placed to meet the future skills needs of the economy.

"There have been thousands of studies which say that employers want more from graduates or which have quantified and prioritised a long list of skills deemed essential to employers," says the report's lead author Lee Harvey, director of the centre. "With this research we wanted to move away from that. Employers are not a homogeneous bunch. They have different requirements and desires and often can't identify exactly what they want. But certain themes run through, and there is an overwhelming view from employers that graduates add real value to their businesses. Employers don't want people just trained for a job, they want recruits who will help with change, and will grow and groom their role. Employers very much regard a degree education as of great value."

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Structural changes in the workplace have helped to make graduates and their unique package of value-adding experiences much more widely desirable. Post-recession downsizing and delayering, the report says, has created a climate where employees have more loosely defined and more demanding roles. "All the structural changes to the employment scene have created an environment best suited to someone with a graduate's skills," says Roly Cockman, chief executive of the Association of Graduate Recruiters. "New employees get much less supervision than ten years ago. They have far more responsibility and will be expected to make decisions on which they will stand or fall. They are expected to juggle a lot of different balls in the air at the same time. It's typical of what they will have already learned to do."

Evidence from employers in the Graduates' Work report showed a distinct consensus: "You are given a lot more power at grassroots level to develop the business and that can blow your mind a little bit," said a bank branch manager. "We have removed completely one level of hierarchy and the senior supervisor has gone," a fast-food chain operations manager commented. The challenges of the 1990s, one personal manager pointed out, are "innovation, empowerment, continuous improvement, results-orientation" and these will dictate what is required from employees.

The ability to meet these challenges, says Mr Cockman, does not come from vocational training. "The AGR welcomes diversity and there is a place for vocational qualifications and vocational degrees - what's a medicine degree if it isn't vocational?" he asks. "But employers are showing a distinct preference for rigorous academic degrees. They do not care what the subject is, just that it has been demanding on the intellect." As the report's interviewees confirmed: "We do not care about degree discipline," said one management consultancy boss in the report. "When I joined we had linguists, classicists, somebody with a music degree joined my intake as well as economics, maths, the sort of things you would normally expect, so demonstration of intellect is key."

Employers in the report were clear on the benefits of a degree. "Graduates come in with a level of education and intellect, and the level of work and commitment that is involved in passing a degree. So, in a sense, there are certain hoops that have been jumped through in quite a short space of time," said one boss. "It is that sense of new ideas, new ways of thinking, challenging the status quo, that is absolutely crucial - and I don't know how you put a value on that," said a telecommunications company development manager. "I think everyone should go on to some form of ÖйúAƬ where possible," another added.

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The Graduates' Work report may have stolen the initiative back from those who would turn universities into advanced vocational training academies, but the report is not an endorsement of the status quo. Professor Harvey is ready to concede that his report does include elements of the more familiar graduate bashing, although the criticism seldom calls into question the value of a degree education.

"Employers do appreciate the value of our graduates, but there is a problem," admits Professor Harvey. "It's not that employers don't like graduates, but the transition from university to work can be a major culture shock. It is not, as is often suggested, that the graduates can not do the job, or lack the fundamental skills, but that they leave university with little idea of the nature and culture of the workplace and find it difficult to adjust."

As the employers' comments illustrated: "It's rare to get people coming straight out of university who are so familiar with working life and what it's like to be in it, that they can just immediately slot in," said a small business owner. Even recent graduates themselves had to admit they were ill prepared. "I don't think my undergraduate degree really taught me a great deal about being in the workplace, but I went to quite an academic course," admitted a trainee solicitor. "My experience of ÖйúAƬ institutions is that a lot of the lecturing staff that are in the establishments haven't got the experience of working in outside industry," another graduate added. "They don't understand what is actually needed out there. It helps to have been in an office."

In a climate where employers want graduates to contribute to the bottom line more quickly, the adjustment period can cause problems. "Many graduates are not aware of the extent the modern workplace has changed beyond traditional graduate expectations," says Professor Harvey. "Some might expect that they will have secretaries, or they don't realise that they will be expected to do their own IT work. That period of adjustment - the time it takes for a graduate to become effective at work - is increasingly a cost that graduate employers are unable or unwilling to bear. The implication of this is that ÖйúAƬ will need to prepare graduates better for workplace culture."

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It is not going to be easy for Sir Ron to come up with the answers. But the report has a clear message. "The key thing for Sir Ron is not to confuse vocationalism with employability," says Professor Harvey. "All degree courses need to equip students, whether English or Oriental studies, with something more than subject knowledge. But the higher level academic skills should never be abandoned - that is vital. I am not at all convinced by some of the more radical models presented to Dearing. We don't want professional lead bodies to be setting standards in ÖйúAƬ. We don't want a national framework of qualifications extending to ÖйúAƬ. This will fragment learning and de-emphasise intellectual critique. One employer said that some modular degrees offer nothing more than 28 A levels. Well, some of the simplistic, unitised programme models on Sir Ron Dearing's desk will be nothing better than having 120O levels. We need to accommodate the holistic nature of academe. If graduate employers wanted purely techno-vocational people, they would not go to ÖйúAƬ."

If there was a single recommendation to come from the research it would be to encourage all undergraduate programmes to offer students an option of a year-long work placement, and for employers to be less reluctant to provide placement opportunities. "We just need much, much more dialogue with employers," says Professor Harvey.

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Graduates' Work: Organisational change and students' attributes. Lee Harvey, Sue Moon and Vicki Geall, with Ray Bower, centre for research into quality. The University of Central England in Birmingham. Free with A4 sae.