Abstract:

Employers are faced with a range of skill problems and often blame the higher education (HE) system for the ill-preparation of graduates for the world of work. This puts pressures on HE to provide graduates with skills that fit economic and labour market imperatives and to foster graduates’ employability. However, the literature shows that there is no one-size-fits-all solution for skill problems. Often, employers face a trade-off between make-or-buy, that is train employees in the workplace or hire skills from the labour market. Our research examines the solutions adopted by a set of employers and explores the link between make-or-buy and employers’ engagement with HE in Portugal. The research question that we attempt to answer is: how is the type of employer engagement influenced by the employers’ option between producing skills internally or hire ready-to-work candidates from the labour market?

The promotion of employers’ engagement with HE has been presented as a solution for skill problems; it may contribute to foster graduates’ employability while reducing the skills mismatch in the workforce. This engagement faces several institutional barriers and may assume different forms as firms develop their own strategies for hiring or training their workforce in a context of growing competition for skills at the national and international levels. This paper draws on qualitative data gathered through semi-structured interviews with human resources managers and owners of 15 firms from the northern region of Portugal. This region’s economy has long been industry-based and our sample comprises firms from the most representative sectors and with different characteristics in terms of size and years of activity. The data from the interviews was subject to content analysis in order to provide insights on firms’ solutions for recruitment and/or training as well as the different relations they establish with HE institutions.

Our findings suggest that employers are heterogeneous and employ different solutions for accessing the skills they need. Some search mostly for ready-to-work candidates, and are unavailable to train newly hired employees; but most participate much more actively in the graduates’ skill formation and assume thus higher training costs in the process. The employers in the sample report skill shortage as they find difficult to hire graduates from some fields of education (e.g. engineering and other technical functions). That shortage affects a wide range of economic activities in the region and involves growing problems not only to find, but more importantly to retain their workforce.

In addition to skill shortage, employers report skill deficits. Even though they consider that HE graduates are endowed with technical skills, they underline that a mismatch exists between supply of and demand for skills. In other words, HE is failing in responding to the changing labour market. Nevertheless, employers are quite unavailable to engage with HE to solve their skill problems. Most firms engage with HEI’s only to find suitable candidates, notably by participating in job fairs, visits or through internships for students at the end of their degrees. However, they neither participate in more active forms of engagement such as the design of tailored courses or work-based learning nor are they willing to do so. There are thus still considerable institutional barriers to a closer relationship between firms and HEI’s.

Keywords:

Employers' engagement with HE, Skills, Labour Market.