SMEs can help stop the Midlands 'brain drain'

Sep 2 2008 By Tom Scotney, Enterprise Editor

Getting more small businesses involved in university work schemes could stop the “brain drain” of bright graduates out of the area, a new recruitment agency has said.

This November will see the opening of thefutureworks, a university recruitment spin-off based in Aston Science Park which will work largely with small businesses to find jobs for graduates.

And programmes manage Obi Okwuadigbo said encouraging students into traditionally less fashionable small business destinations could be the way to improve the West Midlands’ poor record on graduate retention.

Mr Okwuadigbo said: “We tend to work with a lot of SMEs. I think over the years it has been the case that a lot of graduates don’t consider working for smaller firms.

“And a main stumbling block has been the difficulty for small businesses of being able to pay to take on graduates who might cost more money. That tends to be the main stumbling block..

“If they can get help with taking someone one, they are getting someone enthusiastic and keen, but they are also getting someone for maybe half the cost that they normally would.”

He added working for a small business could end up being more rewarding for a graduate than going into the corporate world, adding: “It’s a more tailored process, and there’s more one-on-one experience for the graduate.

“These corporates aren’t doing it wrong, but I’m saying because there aren’t lots of people in a small organisation they will spend more time with you.”

Thefutureworks, which started as an offshoot of Coventry University three years ago, will be opening its Birmingham branch in November. It plans to open up another branch next year if the Birmingham one is successful.

Although it was started as a graduate recruitment service, the level of demand meant it quickly moved into the public workforce.
Currently, about 60 per cent of customers in Coventry are from the university, with 40 per cent members of the public. The organisation said it aims to reverse that figure in Birmingham, although Mr Okwuadigbo said he was already in discussion with Birmingham and Aston universities about a link-up.

According to a recent study by the West Midlands Regional Observatory, some 40 per cent of graduates in the West Midlands leave immediately after finishing university – one of the worst rates in the UK

Many of the rest only stay briefly because of connections with family or friends. But despite this, and despite some firms’ reluctance to take on graduates, the SME sector as a whole widely said a large pool of graduate labour was vital to its success.

One issue was the perceived lack of skills, with many small firms complaining universities were not turning out graduates of high enough quality.

Mr Okwuadigbo said this was an issue he had come across, saying: “It’s a message I’ve been receiving for the last few years.
“Employers are still under the belief that graduates lack the soft skills, and to some extent I would agree with that.”

But he said thefutureworks was trying to improve the situation by encouraging more students to take up placements while studying.

Denise Craig, the West Midlands policy manager for the Federation of Small Businesses, said both SMEs and graduates could benefit from each other, but neither had fully recognised the benefits yet.

“I would say for a general rule small businesses would generally consider graduates to be out of their reach,” she said. “There is a perception that they are too expensive for small companies.

“And conversely I think graduates would tend not to want to work for a small firm. Actually both situations aren’t helpful, because graduates would get a much wider range of experience from working for a small business because you get much more responsibility and a chance to try more things.

“And small business would benefit from having higher experienced people.”