Graduates not ready for work, say small business owners: MYOB

“This is disappointing. The students of today will be the innovators of tomorrow,” says MYOB New Zealand head of SME Ingrid Cronin-Knight.

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The education system needs to ensure that it is providing students with the skills they need to succeed in their chosen career. This survey should serve as a wakeup call.

Ingrid Cronin-Knight, MYOB

Most of New Zealand’s tertiary students will finish exams this week, but the education system has more work to do to prepare them for the job market, according to a new survey of small business owners.

The latest MYOB Business Monitor survey of more than 1000 small-to-medium businesses reveals that 44 per cent do not believe that the education system gives students the skills they need to work in their business.

This is versus just 18 per cent who say it does and 37 per cent who are neutral or said they did not know.

These figures are hugely concerning, says MYOB New Zealand head of SME Ingrid Cronin-Knight.

“The education system needs to ensure that it is providing students with the skills they need to succeed in their chosen career. This survey should serve as a wakeup call,” says Cronin-Knight, in a statement.

“Many businesses report they are facing skill shortages. Having people come through the education system that aren’t work ready only makes that situation worse.

“It also tightens the job market, with many students potentially struggling to secure a job in their first year out of study, meaning they are competing with progressive waves of graduates,” says Cronin-Knight.

Per industry, the construction and trades sector are the most concerned about the unpreparedness of students, with more than half (56 per cent) saying they did not believe that students left study with the necessary skills.

The retail and hospitality sector however, were the most confident in graduate’s abilities, with 37 per cent reporting students were aptly skilled.

We need a strong education system that teaches students about the theory of business management, provides them with hands-on experience, as well as developing the critical faculties that drive innovation and entrepreneurialism.

Ingrid Cronin-Knight, MYOB

Future entrepreneurs and innovators

When asked if the education system gives students the skills they need to be entrepreneurs and innovators, almost half of all businesses surveyed believed it fails to do so, as against just 16 per cent that think it does.

“This is disappointing. The students of today will be the innovators of tomorrow,” says Cronin-Knight.

“We need a strong education system that teaches students about the theory of business management, provides them with hands-on experience, as well as developing the critical faculties that drive innovation and entrepreneurialism.

“New Zealand is making real progress here with the likes of Lightning Lab, Icehouse, the Ministry of Awesome and other entrepreneurial programmes at many of the country’s tertiary institutions. However, we need to look at the whole system to see if there is something more we could be doing.”

Cronin Knight says MYOB works closely with various education institutions around the country to help the next generation of students develop the skills they need to be successful.

“We are involved with several activities through various tertiary institutions to help give students an understanding of the business world. This includes supporting the National IT Challenge, Brand Challenge marketing competition, running hackathons, graduate programmes and sponsoring several awards.”

Students visit MYOB during 'Shadow Tech Day' which aims to encourage more high school students to consider careers in STEM (science, technology, engineering and maths).

Only nine per cent of SME operators surveyed said they believed students entered the workforce with the skills required to run their own business, while 57 per cent disagreed.

Businesses based in the Hawkes Bay (73 per cent) and Wellington (61 per cent) were particularly skeptical, with a large majority reporting they did not think students had what it took to become successful business owners.

Within the industries, 65 per cent of construction and trade SMEs felt the same way.

“While these statistics do come as a shock, there’s plenty of ways to fix the problem,” says Cronin-Knight.

“There are many great examples of young people starting up their own businesses, so it’s not all doom and gloom,” says Cronin-Knight.

She cites James Koo who started his university printing business.

Koo co-founded Auckland based Niesh last year with the ambition to make life easier for students by offering them a free printing service.

“At Niesh, each student gets 100 free pages of printing per month, funded with a banner advertisement along the bottom of each page,” explains Koo.

Since its launch, Niesh has grown from a small operation borrowing the space of a friend’s shop, to a fully-fledged business occupying its own premises and there are ambitions to grow it even larger.

Koo says it was the plight of fellow students that got the innovation ball rolling.

“One of our co-founders had limited funds in the lead up to exams and was caught between the decision to print past papers for his study, or buy food. He chose to feed himself but later wondered if he could have achieved better marks in his exams if he’d opted for the printing.”