Mind the Skills Gap
Published: 24 Nov 2015
An alarming proportion of financial managers think that the school-leavers and graduates they hire are inadequately prepared for work, new CIMA research has found. Katy Ward considers how employers and educators can co-operate to address a costly business problem
The fact that 75 million young people worldwide are struggling to find work is one clear sign that the generational skills gap has become a problem that employers can’t afford to ignore. That’s the view of CIMA’s vice-president, David Stanford FCMA, CGMA, who was a judge in this year’s Global Business Challenge (GBC), the institute’s annual international business management competition for undergraduates worldwide. Although the participants in the 2015 GBC performed as impressively as ever, Stanford believes that too many school-leavers and graduates lack sufficient skills to thrive in a professional environment and/ or are unable to apply their academic knowledge effectively in the workplace.
To determine the extent of the skills gap, the institute recently commissioned a Europe-wide survey of 1,700 finance professionals. Of those with hiring responsibilities, 39 per cent of respondents in the UK and 44 per cent of those in the rest of Europe reported that their graduate recruits required significant training in order to perform junior roles effectively. But just over three-quarters of the respondents based in the UK reported that school-leavers required significant training, compared with fewer than half of their continental counterparts.
For Stanford, the term “skills gap” refers just as much to an inability to transfer classroom learning into a practical setting. Employers often find their young employees wanting in the “effective use of language, numbers and technology, as well as softer skills”, he says, adding: “How do you apply all this learning in the real world? That’s the effective use.”
The vast majority (91 per cent) of UK respondents told the researchers that this problem created extra work for other members of staff, while 64 per cent said that it made life more stressful for employees. The equivalent figures in the rest of Europe were only slightly better: 88 per cent and 59 per cent respectively.
Start ’em younger
How can the situation be improved? Rob Mosedale, finance learning manager at Unilever, has formed clear views on the subject from his experience running the company’s finance talent academy. “It’s important that graduates and school-leavers obtain early exposure to business so that they understand what’s required to be successful in the corporate world,” he says. “Building a cohesive pathway between schools, universities and businesses would help young people to hit the ground running.”
While there may not be a panacea, Stanford says: “I’ve always been a great believer in business challenges. Whether they’re organised at schools or universities or via CIMA, they are a very good way of helping to close the skills gap.”
Such events typically give participants the opportunity to form teams and present a business plan for a proposed new product or enterprise, complete with a budget and cash flow forecast. These competitions are a valuable simulation of typical workplace scenarios and are a good test of contestants’ teamwork and communication skills, as well as their academic knowledge. It’s notable that people (and leadership) skills are key elements of the CGMA competency framework – and both are tested thoroughly by the CIMA syllabus as students advance through the qualification.
Stanford cites the “amazing” winners of the UK regional final of this year’s GBC as an exemplar that other students preparing for the world of work should be aspiring to emulate. Team Rainbow was an outstanding multi-disciplinary group of four undergraduates (a lawyer, an economist, a scientist and an engineer) from the University of Cambridge.
“They were polished, especially considering that they were speaking in their second language, all being Malaysian Chinese,” he says. “They excelled in their presentation skills. All four of them could have led the team.”
But these first-rate students are exceptional, particularly in the UK, according to Noel Tagoe FCMA, CGMA, executive director of CIMA Education, who offers a stark warning: “That so many are leaving the school gates so ill-equipped for the world of work fails British businesses. More importantly, it fails the candidates. The divide between employers and educators remains vast, raising the cost burden on firms and holding back productivity. The realities of work must be better reflected in the classroom through both discussion and practical experience.”
For information about CIMA’s competency framework, visit bit.ly/CIMAcompFramework