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Educators, Employers, and Jobless Graduates Point Fingers at Roots of Unemployment

Source: Chronicle of Higher Education, 12/5/12
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By Katherine Mangan

Educators, employers, and young people are like "ships passing in the night," unable to connect the millions of unemployed college graduates with the companies struggling to fill vacancies, according to the lead author of a report released on Tuesday by McKinsey & Company.

The report, "Education to Employment: Designing a System That Works," is based on the consulting firm's survey of 8,500 educators, employers, and young people in nine countries: Brazil, Britain, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey, and the United States. It also includes findings from 130 programs that seek to connect college graduates with jobs.

Some 75 million people ages 15 to 24 are unemployed worldwide, according to the report. About half of the young people surveyed were not convinced that their postsecondary education had improved their chances of finding a job. Meanwhile, nearly 40 percent of employers said entry-level jobs remained vacant because applicants lacked necessary skills.

Educators were much more upbeat than either college graduates or employers about graduates' preparation for the work force. Seventy-two percent of educators felt the graduates were ready for entry-level jobs, while only 45 percent of the graduates and 42 percent of the employers shared their optimism.

Educators and students also diverged on the reasons students drop out. Thirty-nine percent of educators speculated that the coursework was too tough; only 9 percent of students agreed. They were more likely to say they couldn't afford to stay enrolled.

"We knew there would be a disconnect," Mona Mourshed, head of McKinsey's global education practice and a lead author of the report, said in an interview. "But the magnitude surprised us."
Global Unrest

That disconnection between employers and job seekers could result in global unrest, the report cautions. "If young people who have worked hard to graduate from school and university cannot secure decent jobs and the sense of respect that comes with them, society will have to be prepared for outbreaks of anger or even violence."

Efforts to connect the dots are fraught with miscommunication and misperceptions, the report says. While 69 percent of young people thought a vocational education could be the ticket to a job, fewer than 40 percent of them attended such programs.

In fact, the market for those credentials is on the rise in the United States. "The number of jobs that require more than a high-school degree but less than a baccalaureate is growing very fast," said Nicole Smith, a senior economist at Georgetown University's Center on Education and the Workforce, which studies such trends in the United States. Still, she said, many students shun them, and the two-year institutions that teach technical skills, because they are seen as less prestigious.

Colleges aren't entirely to blame, she said, for the fact that companies cannot find enough workers with the necessary technical skills. Before the recession, manufacturing businesses and employers in other industries typically provided most training on the job. Now they're increasingly expecting colleges to do that for them, sometimes with equipment the companies donate or internships they offer, Ms. Smith said.

"It's not necessarily that the people who are exiting college now are less skilled," she said. "Employers are less willing to pay for the training to get them ready for the job."
Traffic Jam on Jobs Highway

The report describes the path from education to employment as a highway with three main intersections, each of which gets jammed. Enrolling in college is the first, and for 31 percent of the young people polled, the cost brought them to a screeching halt.

Those who make it to the next crossroads—building skills—need hands-on training. But fewer than half of respondents to the survey said their classes had made that a priority. As for the third junction, finding work, a quarter of young people make a rocky transition into jobs that are often unrelated to their field of study. Then they quickly start looking to shift lanes to another job.

Lack of communication is a theme that runs throughout the report. Most employers don't talk to educators on a regular basis, and when they do, it doesn't help, the report says. And many educators are clueless about their graduates' job-placement rates. When they guess, the numbers are way too high, according to the report.

Job applicants are equally in the dark, the report says. Fewer than half of the young people polled felt they had been given useful information about the kinds of jobs and salaries they might expect if they pursued particular disciplines.

One employment expert who reviewed the report said it reflected the need to revamp the existing system of choosing majors in the United States.

Once a student picks a major, "someone, usually career services, tries to take that person and plug them into a job that resembles the major," Phil Gardner, director of research for the Collegiate Employment Research Institute at Michigan State University, wrote by e-mail. "We need to turn this completely around," he said. "Find occupational clusters (similar jobs) that a student is interested in pursuing, then trace back to the major options available to get them there."

The employment institute released a study last month finding that while the job market for new graduates is slowly improving, political uncertainty has made employers nervous about hiring.

While much of McKinsey's report focuses on the disconnection between employers and educators, it notes successful examples of employers' helping design curricula and offering their employees as faculty. It also highlights internship arrangements in which students spend half of their time on a job site and end up getting jobs with the company when they graduate. The apprenticeship model is particularly widespread in Germany, it notes.

Simulations, from a pretend hotel in India to a realistic replica of a coal mine in Australia, provide the next best thing to on-site experience, according to the report. The Challenger Institute of Technology, in Perth, Australia, for example, has a fully functional replica of a gas-processing plant, without the gas, to train students in plant operations.