The skills and knowledge of the graduate economist

As promised in the last issue we can now bring readers the full results of the recent study of skills and knowledge required by employers and the extent to which these are reflected in the Benchmark Statement for Economics.

This study was commissioned jointly by the Royal Economic Society and the Economics Network in October 2006. The initial desk research was undertaken during November while interviews were conducted in December 2006 and January 2007. An online survey was set up in February 2007 and ran until the end of March 2007. The research team consisted of Deborah Street and Chris Webber of the ASQM Consultancy Unit based in the University of the West of England (UWE) and was led and coordinated by Dr Richard O’Doherty, Head of Economics in the Bristol Business School at UWE. We would wish to acknowledge the help and support we have had from many sources but, in particular, from John Sloman of the Economics Network. The study was prompted by concerns as to whether the (revised) Benchmark Statement for Economics reflects the full range of skills and knowledge required by employers, and also whether it takes account of the developing HE teaching and learning environment with new obligations such as PDP and employability initiatives. Indeed a criticism of the current Economics Benchmark Statement (cited in HEA Economics Network 2007) was that it ‘confines itself to identifying only the subject specific and cognitive skills of the discipline’.

Recent studies (HEA Economic Network 2004, HEA 2005) have attempted to assess the student experience and also students’ attitudes towards their HE Economics programmes and employability profiles. Whilst these studies have insight into the skills and knowledge that students recognize from their programmes, the focus has been on the students’ perceptions rather than the views of employers. To an extent, the HEA Economics Network 2004 study did interview recruiters, finding that problem-solving skills and understanding of core principles are seen as important to employers, but that ‘(economics) graduates are not particularly good at applying knowledge’ to any ‘real-world application’. This study also found that employers perceive Economic graduates as ‘not particularly strong in the development of communication skills or working effectively in teams’ due to the lack of experience of suitable learning activities on ‘traditional’ taught courses. The study goes on to suggest that ‘developing these skills through the economics curriculum could be an important step forward’. There is therefore some evidence of a mismatch between employers’ requirements and what is delivered by way of opportunities for development through the current economics curricula. What is clear through a review of published work on this topic is how little research has been undertaken involving employers who employ economics graduates.

Aim
The broad aim of this project was to attempt to understand employers’ requirements of economics graduates, to establish whether they think these graduates generally possess the required skills and knowledge and to reveal any clear shortfalls in order to inform the UK economics academic community. The current Benchmark Statement was taken as a starting point for the survey and was to be critically appraised as to its continuing relevance.

Survey approach and methodology

Outline

Given the limited budget, the steering group agreed on a two-phase approach: an initial stage of in-depth interviews with a small number of key employers and a second stage involving the use of a web-based survey questionnaire to a wider range of employers.

Stage One: In-depth interviews

The initial part of the project concentrated on employers' comprehension of the economics curriculum, drawing on a range of sources such as the latest revised Benchmark Statement, Craven (1993), Economics Network (2004) and Grant (2006).

The aims of Stage One were:

• To understand employers’ experience of economics graduates in terms of their skills.
• To understand employers’ experience of economics graduates in terms of their knowledge.
• To identify any skills/knowledge deficits.
• To establish whether recruitment processes identify issues.
• To establish whether training programmes suggest that these graduates are deficient in necessary skills or knowledge.

• To obtain feedback on the Benchmark Statement and the draft questionnaire.
• To use this information to help develop the survey questionnaire.

The aims of Stage Two were:

Regarding employers’ requirements:

• To establish the skills that employers are looking for in a graduate economics student (skills list supplied by interviews and Benchmark Statement).
• To establish what knowledge employers are looking for in a graduate economics student (knowledge and understanding supplied by interviews and Benchmark Statement).

Regarding employers’ assessment:

• To establish the skills employers believe their current economics graduates bring with them to employment.
• To establish the knowledge employers believe their current economics graduates bring with them to employment.
• To establish whether employers believe there is a skills/knowledge deficit and to identify any areas in which this occurs.

Contacts

The main challenge to this work was locating the sample frame for both the interview and survey stages. This was achieved in a number of ways: through known contacts from the project initiators, contacts available through the careers services of a number of universities, The Personnel Managers’ Year Book 2006, recruitment agencies, the Society for Business Economists (SBE) and by drawing data from internet sites for known employers.

Interviews

The interviews were conducted with senior staff from the Government, Finance and Consultancy sectors between December 2006 and January 2007. The focus was generally on the employers’ experience of economics graduates through their recruitment, training and employment processes. The interviewees were also asked to comment on a draft questionnaire to check for comprehension and coverage. Here we were testing their familiarity with the skills and knowledge listed in the Benchmark Statement and their assessment of the questionnaire for our own purposes.

Survey

To ensure a wide range of opinion, the project team undertook an exploratory survey of employers. The survey was published online with the economics Network and details were e-mailed to those contacts identified. The SBE was also able to advertise the survey through its newsletter; in addition, those interviewed had agreed to forward the survey details to colleagues and associates. Although the initial response was disappointing, follow-up telephone and email contact resulted in an acceptable number of completed questionnaires from a broad spectrum of major employing sectors.

Interview responses

The respondents focused on the following areas:

Application of knowledge to problem-solving processes (framing)

There was a general consensus that economics graduates are weak in the area of applied problem solving, with questions raised about the teaching and learning methods applied at undergraduate level. It was suggested that more case-study work might be appropriate. Two questions were developed for the survey from this: whether economics graduates can apply economics knowledge and whether they can apply economics knowledge to the real world.

Communication/presentation skills

It was generally acknowledged that graduates came with limited experience in communication styles. This related to both the quality/accuracy of their written work and to the variety of communication formats they understood; presentations, report writing, drafting styles and journalism.

Employability and recruitment process

Interviewers noted that economics graduates did not appear to have the ability to promote themselves in the job market. This was generally observed in substandard application form completion, inability to write an accurate and relevant covering letter, inadequate preparation for interview (such as failing to research into the company or job requirements) and poor interview skills. The employers specifically indicated that 2/3 of applicants are were dismissed due to lack of attention to detail in the application process.

Employability was seen as a key concept too; graduates would be expected to turn up on time, look smart and contribute to the working environment. Internships and placements were useful but employers indicated that, as most students work in some type of temporary part-time employment, of equal importance was the ability of students to communicate how their employment was relevant to their personal development and employability after graduation.

Arising from comments made in the interviews, it was decided to include two additional questions in the online survey not covered by the Benchmark Statement; graduates’ knowledge of developments in economic policy and their relevance to specific employers, and debating skills.

Survey results

Overview

The organisations that took part in the online survey represent employers of approximately 1000 economics graduates in the 2006 recruitment round. Table 1 below gives a breakdown by sector and by number of employees.


Half of the respondents indicated that they targeted specific universities for their economics graduate recruitment and, of these, 55 per cent indicated that this was because of the skills, knowledge and employability of the graduates (see Table A1, Appendix). Whilst this does not relate directly to the Benchmark Statement, it does indicate that there is an impression amongst recruiters that particular universities provide economics graduates with particular capabilities.

In general the results indicate that the Benchmark Statement is appropriate for employers. Although ‘debating skills’ were highlighted at the interview stage, this was not borne out by the survey where only 30 per cent of respondents felt this ‘essential’ or ‘important’. However, knowledge of ‘developments in economic policy’ did appear as ‘critical’ or ‘very important’ to a significant number.

Skills

Respondents were asked to rate required skills on a four point scale; ‘essential’, ‘important’, ‘desirable’ or ‘useful’. The percentage of employers indicating ‘important’ or above is given in Figure 1. In order to assess whether there is a perceived skills deficit, respondents were also asked to rate achieved/perceived skills in graduates on a four point scale; ‘excellent’, ‘strong’, ‘average’ and ‘fair’. The percentage of those who considered economics graduates to be ‘excellent’ or ‘strong’ in that skill was calculated for those who thought the skill was ‘essential’ or ‘important’. Table 2 shows the results of this filter analysis. Figure 2 provides an alternative view of the disparity between the perceived importance of skills (horizontal axis) and the perceived strengths (vertical axis) with a 45 degree line superimposed to indicate where strengths and importance are equal.

Knowledge

As with the skills analysis, respondents were asked to rate various areas of required knowledge on a four-point scale; ‘critical’, ‘very important’, ‘important’ and ‘unimportant’. The percentages indicating ‘critical’ or ‘very important’ are given in Figure 3.

Summary of comments1

Comments made in the survey support the key findings in the interview phase in terms of application of knowledge to problem-solving processes, communication skills and employability.

Application to problem-solving process —

‘I have a real concern that too narrow a set of theories and models is taught in top UK universities and that opportunities to help students develop a better understanding of the world are missed.’

‘I would like to see more interaction/case-study practice developing skills (team work, communication at different levels) and thinking across subjects. The knowledge here is pretty standard for all those we have employed so far but the graduates offer little in the way of application to real situations.’

‘Graduates are weak in this area. Perhaps more concentration on case study work?’

Communication skills —

‘Some economics graduates we have recruited have had poor writing skills. This includes not being able to think clearly through an issue, structure a report and identify key conclusions.’

‘Attention to accuracy in written work is imperative and often lacking.’

‘It’s the quality of the writing, it’s the accuracy … you know a number doesn’t mean anything unless you've got the source, year and context.’

These comments are also relevant to the recruitment and employability issue where respondents indicated that failure to adhere to the application format and to submit applications without errors was disappointing. Training in the application process was perceived as inadequate. Candidates either did not get interviews or failed in interviews because they:

- had not completed the application form appropriately (fully or without spell checking);

- did not conduct sufficient research on the company and job;

- had poor interview skills.

One respondent also indicated the extent of the issue: ‘Attention to the application process and requirements is inadequate by three quarters of all applicants.’

Conclusions and recommendations

Benchmark Statement

• In general, the Benchmark Statement has been found to be robust and relevant to current employers.

• With the exception of debating skills, all skills were rated as being ‘essential’ or ‘important’ by at least 60 per cent of respondents (and by over 70 per cent for all but six of the listed skills, see Table A1 in Appendix1).

• The ratings of ‘critical’ or ‘very important’ for knowledge items were recorded by a lower proportion of respondents (see Table A2 in Appendix) suggesting a greater tolerance in respect of required knowledge. Indeed, only four of the identified knowledge areas were considered to be ‘critical’ or ‘very important’ by more than 50 per cent of respondents (and the highest was only 54 per cent).

• The only additional knowledge item to be considered is knowledge of the development of economic policy, which was considered ‘critical’ or ‘very important’ by 44 per cent of respondents.

Perceptions of skills and knowledge of economics graduates

• The proportion of respondents considering the skills brought to employment by economics graduates to be ‘excellent’ or ‘strong’ varies widely by type of skill and knowledge (see Tables A1 and A2 in Appendix).

• The range for skills is from 33 per cent (debating) to nearly 87 per cent (manipulation of quantitative data) with nearly half of the identified skills being scored at >60 per cent.

• The range for knowledge is much narrower with figures from 29 per cent (development of economic policy) to nearly 53 per cent (opportunity cost). In general, less than half of respondents considered economics graduates to be ‘excellent’ or ‘strong’ in any of the identified knowledge areas.

Skills and knowledge deficits

• An indicator of deficit has been based upon a comparison of the percentages of respondents giving the two highest ratings to importance (essential/important or critical/very important) and possession (excellent/strong). Concern may be felt if the proportion of respondents judging a skill/knowledge to be of high importance is not reflected in the proportion that consider economics graduates to possess that skill/knowledge at a high level.

• In general, both skills and knowledge appear to present many examples of deficit using this criterion (see Figure 2 and Figure 4).

• Three skills which appear to require the most attention are abstraction, communication of complex concepts and communication in writing, although others are also apparent.

• Deficits in knowledge are not so extreme, although this may in part be due to low expectations on behalf of employers. The two knowledge areas which stand out are developments in economic policy and interdependency of markets and economic welfare (along with, perhaps, impact of expectations and surprises).

Employability

• Although this aspect was not a direct aim of the study, so many comments were made during the duration of the research that a brief summary here is necessary.

• Employers were very critical of economics graduates’ performance throughout the application and interview process. A lack of communication skills (both written and spoken) as well as inadequate preparation for the interview were remarked upon many times and given as reasons why applicants were either not given, or performed badly in, interviews.

• It would appear that some attention should be given to this aspect even though it may not be solely related to economics graduates.

Note:

1. Further comments by respondents are available from the authors. Email: Richard.O’Doherty@uwe.ac.uk

References:

Craven, J., (1993), ‘The Skills of an Economist’, Royal Economic Society Newsletter, 4–5 April.

Grant, S., (2006), Teaching and Assessing Skills in Economics, Cambridge: Cambridge U P.

Economics Network, (2004), What You Need and What You Get in Economics Higher Education (results of graduates and employers survey), [online] available at http://www.economicsnetwork.ac.uk/projects/alumni_survey2004.pdf., accessed on 3/2/07.

HE Academy, (2005), Student employability profiles: A Guide for Higher Education Practitioners, [online] available at http://www.heacademy.ac.uk/3556.htm, accessed on 3/2/07.

Economics Network, (2007), ‘The Challenge for Economics Departments’ in The Handbook for Economics Lecturers, [online] available at http://www.economicsnetwork.ac.uk/handbook/pdp/52.htm, accessed on 3/2/07.

APPENDIX


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