Ref: Aspazijas blvd., Riga, Latvia

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1 Ref: 4.14 Employability of University Graduates According to their Qualifications and Competencies: the Case of Latvia Working paper Inta Jaunzeme 1 University of Latvia, Faculty of Economics and Management Inta.Jaunzeme@lu.lv Keywords: competencies, skills, employability, graduates, higher education, labour market, university. Abstract: This paper reports main findings from three sample surveys on university graduates starting of successful employability in the dynamic, changing environment in Latvia. The aim of the surveys is to analyse the university graduates employability in the period from 1991 until 2006, when Latvia experienced many changes in economy, labour market structure and educational system. Second research question is evaluation of the competencies achieved in the studies and demanded from labour market. The analysis is based on interviews, focus group discussions and data from sample surveys Professional Activities of Graduates of Higher Educational Institutions (2491 respondents, graduates), Compliance of Higher Education Programmes with the Requirements of Labour Market (1422 respondents, employees) and Detailed Study of the Labour Force and the Labour Market in Sectors of National Economy (2500 respondents, employers), carried out in The main results of analysis showed the following issues: 1) Approximately 70-80% of respondents, who graduated in 2003 and 2005, during their studies were employed and 57% of them answered that their work was related to qualification acquired during the studies; 2) Increase of number of graduates whose professional activities correspond to the acquired qualification (64.6% in and 76.8% in ); 3) Graduates employment according to acquired qualification affected the awareness of the information about labour market and employment opportunities; 4) Graduates evaluated competencies obtained during studies as satisfactory, but there are lower requirements in their current workplace; 5) Previous experience in profession, general competencies and correspondence of qualification obtained with current profession are the main factors for employers to recruit top level managers; 6) There are differences in evaluation of necessary competencies for successful employment of graduates, given by employers, employees and higher education specialists; 7) In general, 1% of all graduates have registered as unemployed and additional 1% unemployed but not officially registered. Therefore, the unemployment problem in the group of graduates is not common. 1 5 Aspazijas blvd., Riga, Latvia 1

2 Introduction Transition from command to market based economy, changes in the labour market and demographic situation, reforms in educational system increase the role of human resource development issue and the role of the higher education. These changes demand from graduates of higher education institutions competencies for successful employability. Competencies in the literature on human resource management are defined from two main aspects: 1) behavioural competencies (soft skills), being characterized as opinion on how to act to perform well in ones job; 2) technical or functional competencies (hard skills), which characterize what individuals should know and do to perform well ones job (Armstrong M., 2006: ). Competencies can characterise in the context of the career issue (career competencies) which embodied the people`s beliefs and identities (knowing why), skills and knowledge (knowing how) and networks of relationships and contacts (knowing how) (Arthur M.B., Rousseau D.M, 1996: ). Competencies in this study are described as skills, knowledge, abilities and attitudes. In the policy context Latvia has approved National employment strategy and Latvian National Development Plan for the period , where the individual is characterized as educated and creative personality being able to obtain education according to labour market requirements and improve competencies lifelong. To reach these aims Latvia should develop and improve educational quality and accessibility. It is important to agree between employers and educators on study results and competencies to be acquired by the graduates. The aim of study is to analyse employability of the university graduates in the period from 1991 until 2007, assessment of the competencies achieved in the studies and demanded from labour market. Data and Research Methodology The study is based on interviews, focus group discussions and results from three sample surveys, carried out in : Professional Activities of Graduates of Higher Educational Institutions -2491respondents [1]; Compliance of Higher Education Programmes with the Requirements of Labour Market respondents, employees [2]; Detailed Study of the Labour Force and the Labour Market in Sectors of National Economy respondents, employers [3]. In the survey [2] only these employees - graduates from higher education institutions in 1991 and later were surveyed. Their professional careers and competencies necessary for successful employment were evaluated. The graduates` profession, its correspondence to their last qualification and gained competencies were acknowledged. Changes in the Labour Market The development of the Labour market in Latvia is affected by a number of reasons. Firstly, since 1991 employment structure has changed and many enterprises have been closed, leaving many people unemployed. Redundancies forced people to change their qualification. At the same time new employment possibilities (like finances, commerce, hotel and restaurant services) developed fast. 2

3 Secondly, reforms in the education system, in default of the developmental plans and limited finances prevented balanced development promoted rapid growth of the number of students in social sciences. Share of students in social sciences among all undergraduate students in 2007 reached 54% (Ministry of Education and Science, 6). Thirdly, labour market situation is affected by demographic trends. Steep decline of fertility at the beginning of transition and reduction of population in working ages determines labour force supply. Graduates` Transition from Education to Labour Market According to the results of the survey [1] majority (55%) of graduates were employed after graduation and did not continue education, 23% of graduates continued education and were employed at the same time, 9% of graduates continued studies only and 13% of graduates neither continued studies and nor were employed. Beginning of career during studies Work during studies becomes more common from graduates of 2002/ % were employed during their studies but from graduates of 2004/ % worked. 70% of full time students and 62% of state budget financed students have worked during their studies and therefore they were employed before graduation. Graduates with the following qualification or degree were employed during their studies (Figure 1). Figure 1. Graduates employed during their studies by fields of education (employed as % of group totals) Source: Survey [1] The largest proportion of students, who started working (Study of Labour Market, 8) while studying, thinks that the job is related to their speciality. From graduates who were 3

4 working during their studies 57% said that it was related to the qualification acquired during studies, 24% said that their work to a certain extent was related and only 19% informed that there was absolutely no relation. Awareness about employment opportunities Graduates employment according to acquired qualification affected the awareness of the information about labour market and employment opportunities (Figure 2). Figure 2. Awareness about employment opportunities during studies or after graduation (%) Source: Survey [1] This data emphasizes the necessity of career guidance services for higher education institutions entrants, students and graduates. Reasons for choosing job that does not correspond to the acquired education 29% of graduates who did not work according to their acquired education or did not work at all mentioned as one of the main reasons low salary, 22% stated that there were better career opportunities in other profession but 17% were not able to find work in Latvia that would correspond to their acquired education (Study of Labour Market, 8) Low salary was the main reason mentioned by education specialists, health care and welfare specialists, who do not work according to their acquired education. Specialists of the following fields noticed better career opportunities in other fields more often: services, information, communication, engineering and technologies. Additionally, specialists of manufacturing, processing, humanities and art mentioned that they were not able to find corresponding work in Latvia. Although the professional mobility remains, the number of graduates, working in profession that matches their education, is increasing (see Figure 3). 4

5 Figure 3. Share of graduates not employed according to their qualification during different periods of graduation (%) Source: Survay[2] Assessment of skills acquired and improved during studies Depending on the field of education, assessment of skills acquired during studies differs. The data emphasizes [1] that those who work according to their acquired qualification on average give higher evaluation for all skills acquired during studies. The most essential differences between acquired skills and necessary competences at work were discovered among teachers. Those who work in the acquired specialty give higher evaluation of use of acquired knowledge in practical life, the ability to explain their opinion and work in a team. Specialists working in the field of humanities and art give higher evaluation for the possibility to use their acquired knowledge in practice, knowledge of their field, ability to use time effectively, ability to explain their opinion and present their ideas to the audience. Using of knowledge acquired in the education institution and knowledge of their field is also especially highly evaluated by graduates of health care and social welfare, and law; ability to adjust, work in a new environment and protection of their rights by agriculture specialists; ability to plan, manage and organize specialists in services and law; ability to learn alone and acquire new knowledge specialists of commerce and administration and law. Graduates, who graduated between , evaluated their competencies obtained during studies as satisfactory, but those competencies were lower, than their current employers require (Figure 4). 5

6 Figure 4. Satisfaction with the ability of educational institution to promote acquisition of skills and necessity of skillin the chosen profession (assessed in the scale of 4 points, where 1 fully unsatisfied, 4 fully satisfied). Source: Survay [2]. Graduates acknowledge that competencies acquired during their studies have sufficiently high level of the skills. Ability to communicate in Latvian language and computer skills are highly demanded in labour market. Skills assessed by Stakeholders Assessing readiness of employees for performance of the job tasks, employers indicate that approximately 90% of graduates have good theoretical background, but 43% do not have sufficient practical skills. Results of the survey [3] shows that gathered experience and additional skills are important for employers when hiring employees for managing posts, appropriate professional or higher education has been indicated as the third criterion. It means that employers choose employees according to the level of competence of personality. 6

7 During the focus groups discussions was indicated that employers and employees consider communication skills as necessary, while for educators dominant are requirements regarding education and particular job skills. It indicates that educators do not specially emphasise development of general competencies. Graduates motivation to work and desire to work have significant meaning for employers (Study of Labour Market, 7). Unemployment among graduates The results of survey [1] shows that graduates who were unemployed (n=211) most often are on maternity leave (32%) or combined unemployment status with studies (28%). Only 15% from the unemployed graduates were officially registered as unemployed. In general, 1% of all graduates have registered as unemployed and 1% had unregistered unemployment status. According to the data of State Employment Agency in 2005 there were registered 325 unemployed graduates (State Employment Agency, 7). Total number of graduates in 2005 was (Ministry of Education and Science, 6). Conclusions The results of surveys allow summarizing the data about graduates career path and competencies. Employability of the students and graduates is affected by development of economy, educational quality and availability of the career guidance services. Regardless of the comparatively low volume of information about employment opportunities and guidance services` accessibility, 70% of graduates worked according to the acquired education after graduation. Rapid economical development motivates the graduates to start career already during their studies. It allows university graduates to train their practical skills, which is one of the most often required competencies by employers. Graduates, who graduated from Latvian higher education institutions between , evaluated their competencies acquired during their studies as satisfactory, but those competencies were lower, than then their current employers require. Respondents indicated that educational institutions provide knowledge of foreign languages and abilities to present ideas, reports and recite the information slightly above the average level. Current unemployment rate in Latvia is 5%, but among the graduates` it is 1-2%. Therefore the survey data and current situation allows us to conclude that the unemployment problem in the group of graduates is not common. Universities should facilitate student`s successful transition into working life, competency development and study programme development by cooperation with stakeholders in the labour market. Development of the career guidance services in the higher education can give positive effect for improvement of the students` employability skills and competitiveness in the labour market. 7

8 References 1. Armstrong, M A Handbook of human resource management practice. London: Kogan Page. 2. Arthur M.B., Rousseau D.M The Boundaryless career: a new employment principle for a new organizational era. New York: Oxford University Press. 3. Central Statistical Bureau of Latvia. Statistical databases. (accessed ) 4. The National Lisbon Programme of Latvia ( ), approved by Cabinet of Ministers of the Republic of Latvia on October 19, (accessed ) 5. Latvian National Development Plan ( ), approved by the Cabinet of Ministers of the Republic of Latvia on July 4, 2006 by adopting Regulations No (accessed ). 6. Ministry of Education and Science of Latvia. Statistics on higher education. (accessed ) 7. Study of Labour Market Compliance of Professional and Higher Education Programmes with the Requirements of Labour Market, Riga (English version is available on ) 8. Study of Labour market Professional Activities of Graduates of Higher and Vocational Education Institutions after Graduation, 2007, Riga. (English version is available ) 9. Study of Labour Market Detailed Study of the Labour Force and the Labour Market in Sectors of National Economy, 2007, Riga. (English version is available State Employment Agency. Graduates unemployment in year (accessed ) 8