Alice Beckett, research assistant at the Economics Network, summarises the findings.
The Economics Network recently conducted a survey of employers of economics graduates for the 2014-15 academic year, the fourth survey conducted since 2006. The survey aims to improve understanding of the knowledge and skills required by graduates to be effective employees, and to identify and address any clear shortfalls.
This year’s survey gathered over 60 responses from a range of employers; mostly based in central government, but responses were also received from organisations in banking, financial services, consultancy and a range of other sectors. The majority of participants came from large organisations (with over 250 employees), while less than 20 per cent of respondents came from medium (50-249 employees) or small (less than 50 employees) organisations. Of the 66 respondents, 61 reported that their organisation has specific jobs for economics graduates.
Overall, the survey highlighted the application of theory and communication skills, in particular communicating effectively in writing, as the areas most in need of improvement among economics graduates. These results reflected similar criticisms raised elsewhere, for example at the Economics Network’s Bank of England event, which also highlighted the conspicuous absence in current curricula of recent policy priorities such as micro and macro-prudential policy.
Skills valued by employers
Employers were asked to indicate how important they considered a range of skills to be among the economics graduates they employ. Most frequently considered as very important were ‘the ability to analyse economic, business and social issues’, and ‘the ability to organise, interpret and present quantitative data’. They rated ‘understanding and interpreting financial matters’ and ‘framing’ — defined as the ability to formulate economic problems, determine the important parameters and construct constrained solutions — to be least important.
How employers rate the skills of current economics graduates
In assessing the current skills possessed by economics graduates, employers considered graduates to be most proficient in their fluency in using IT and computers and least proficient in critical self-awareness. Other skills for which employers frequently cited the level of skill as not very high included the ability to apply what has been learned in a wider context and the ability to communicate clearly in writing, although responses were much more varied in these areas.
Figure 1 – Skills Employers See as Most and Least Important to Economics Graduates
Figure 2 – How Employers Rate the Skills of Current Economics Graduates
Areas of knowledge and understanding valued by employers
Employers were asked to consider which areas of knowledge and understanding they saw as important in economics graduates. The results showed that employers most highly valued knowledge and understanding of incentives and their effects and considered knowledge and understanding of equilibrium and disequilibrium to be least important. Knowledge and understanding of social costs and benefits and opportunity cost were also deemed important by the employers surveyed. Considered less important was knowledge and understanding of the impact of expectations and surprises and macroeconomic variables and the impact of macroeconomic changes.
Figure 3 – Areas of Knowledge and Understanding Valued Most and Least by Employers
Skills and knowledge most needing further development
Finally, employers were asked to comment on which skills and knowledge they believed most needed to be developed further in economics degree courses. When their comments were grouped into categories, employers most frequently mentioned the application of economic theory as an area that needs developing. Other skills frequently mentioned included communication skills, quantitative skills, economic history and cost-benefit analysis.
Comparisons with previous surveys
Comparing our 2014-15 survey results with the 2012 survey shows some interesting similarities and differences. Given changes in the survey participants between years, our comparisons cannot be used to give an objective assessment of changes in the skills of economics graduates over time, although they can offer some qualitative observations.
The proportion of employers reporting that the level of economics graduates ability to analyse and interpret quantitative data is ‘very high’ has fallen considerably since our previous survey, with a greater proportion of employers now considering graduates level of skill to be ‘fairly high’. A higher proportion of employers responded that graduates ability in using IT and computers was ‘not very high’ compared with the previous survey. Despite this, using IT and computers was still the skill category where the skill level of graduates was considered ‘very high’ by the largest proportion of employers. There were also considerable changes in employers' impressions of graduates’ ability to work effectively with others and their ability to communicate clearly in writing, with both seeing a reduction of the proportion of respondents considering graduates' skills to be ‘very high’ in these areas.
As shown by the survey, communication skills and the application of economic theory remain important areas where employers would like to see further development in economics degree courses.
These concerns come at an exciting time in the economics discipline when curriculum reform is already being discussed with increasing frequency on occasions such as the recent Economics Network event at the Bank of England and through drives for curriculum reform. With such wide discussion, there is real potential for the concerns of employers to be addressed and it will be interesting to see how these developments may affect the attitudes of employers towards economics graduates over the next few years.