• Ian Walsh, Managing Director, Intent Group

New Zealand’s fall from grace in the OECD rankings over the past 50 years, and our poor productivity overall, is underpinned by factors such as our geographic location and lack of investment in research and development. The primary reasons though, are our poor performance and second level leadership, with studies exposing our lag in this regard.

Kiwis work in a unique commercial situation in that 90% of our businesses are SME’s, typically with less than 50 people employed. In this environment, the ability of businesses to invest in talent development, provide mentoring and to create a culture of excellence, is limited.

Many business owners and managers need training themselves to develop their skills in finance, business planning and suchlike.

In an environment where they are building a business, developing new products or services, employing people, managing finances and capital plans, there is limited ability and understanding to grow the human capital as well.

It’s a day to day struggle just to remain afloat, and even more so since Covid-19 hit our shores.

In such an environment, every hire is a big decision. It is a serious commitment. So, when confronted with graduates, businesses are naturally uncertain, recognising that it will be some time before their investment pays off and aware that the employee may soon head off on an OE.

All of these considerations make it tough for graduates to get jobs, and create problems for the entire system, with people rightly questioning the value of a university degree.

Many large companies have stated publicly that a degree is not required for a great number of roles. The reality is that if you can demonstrate you can do the job without the degree, then your experience becomes more valuable than the piece of paper several years of study will provide.

In addition, businesses are placing a higher premium on softer skills, such as leadership and interpersonal skills.

Many studies show a strong linkage between productivity and these competencies.

This must be very concerning for the universities who are trying to understand how to re-invent themselves in an age when everyone has access to unlimited content, which is available at any time.

Knowledge is no longer the reserve of the professor. The ability to learn and adapt is becoming more important than a degree. So why would a student take on significant debt to study, when they can achieve the same outcome without incurring cost?

The real currency now is the rate at which people can learn and their ability to apply new skills. So, how are universities adjusting to deliver this extra value that would separate them and enhance the value of their courses?

Why wouldn’t graduates leave university ready, willing and able? Imagine how much easier the hiring decision would be if graduates could demonstrate they had competence (not just passed papers but had applied and delivered outcomes, using their learned skills).

Imagine if we developed leadership capability in our future generations, so they could immediately make a difference.

Of course, this is what business, government, universities and our future generations want. To be well trained, to know investment in learning is valued, and to know they can make a difference.

Many countries overseas, such as the USA, are already doing this. So surely, the core question is then “why aren’t we?!”

I am certain that the answer from some sectors would be that they are, with new courses and offerings aplenty. Unfortunately, we are still seeing a significant number of graduates without jobs or options upon completion of their study.

This suggests that we are failing them, in either their guidance, the courses offered or the outcomes and perceptions of these programmes.

There is no question though that under utlising our future talent is the greatest waste of all and fixing this is a key to fixing our productivity gap.

Recently, the IBM Institute for Business Value surveyed academic and industry leaders, with 51% believing that the current higher education system fails to meet the needs of students, and nearly 60% believing it fails to meet the needs of business.

Industry and academic leaders revealed that the very skills needed for workforce success are the same skills graduating students currently lack, such as analysis and problem solving, collaboration, teamwork, business-context communication, flexibility, agility and adaptability.

Underscoring this point, 71% of corporate recruiters indicated that finding applicants with sufficient practical experience is their greatest challenge when recruiting from higher education institutions. *

To repair our productivity gap, we need to look long term at how we can systemically fix the way in which we grow, nurture and develop our future talent to meet the needs of Team NZ; not just functional parts of the system.

We need aligned metrics, outcomes, systems and processes that hold the whole system accountable and deliver better outcomes for our future leaders. I am keen to make this happen. Are you?

*Michael D. King is the Vice President and General Manager of IBM’s Global Education Industry.