Why hiring graduates isn’t a cost to SMEs


New graduates are stepping out of university and finding it harder than ever to gain employment.

They often turn to the graduate programs offered by large companies, where in some industries they take on hundreds of new recruits annually. For those that aren’t successful in these initiatives, or find themselves in an industry where programs like this don’t exit, it can be cause for concern.

These graduates are particularly reliant on small businesses to fill the gaps.

LinkedIn Insights shows that 80% of small businesses hire graduates but only 12% have formal graduate recruiting programs. These stats illustrate that most small-medium enterprises (SMEs) want to hire graduates but hardly any commit to it becoming a regular aspect of the business through a dedicated system.

The number of applicants far outweighs the number of graduate jobs today and small businesses should be taking advantage of this talent pool available to them. Small businesses in Australia employ around 2.5 million people and without them, the local economy would have difficulty functioning.

So why should small businesses take on a graduate?

It’s a cycle that needs support

As many university and TAFE courses today include a work integrated learning component, students are able to gain experience while studying. This type of work is usually in the form of an internship and is undertaken unpaid.

While some students look at it negatively as they don’t have the potential to earn money, it is somewhat necessary to reduce the cost that they may have on small businesses. Being able to take on a student without the need to pay a full wage makes small business much more inclined to participate as a host company.

It’s a cycle that needs to be supported by both businesses and students to work effectively.

The cost is on the decline

As students are now graduating with more experience than previously, it means that the cost of hiring someone straight out of university is getting lower.

Graduates now usually have some experience under their belts, so when they are getting paid in a graduate or entry-level position, there is less of a cost to businesses again as they can get into regular work quicker.

The learning curve that graduates have traditionally come with is no longer as steep. This is because they will require less time training for basics and will already have an idea of what working in the industry is like.

Host companies can use student internships to their advantage as a way to ‘try before they buy’. A 12-week internship, for instance, can be seen as an extended job interview where an ongoing position can be offered based on this.

Graduates shouldn’t be seen as a cost

Graduates are young and beaming and can bring something new to an office or workplace, as they have the most up-to-date knowledge and education compared to experienced workers.

Those from overseas can prove to be particularly valuable as they have a cultural and global awareness. Graduates can offer a fresh take on things and can adapt quicker as they aren’t used to being buried in bureaucracy.

The last thing that they should be classified as is merely an expense. The view that they may leave after having time invested in their learning shouldn’t be a deterrent as, if you offer them the right conditions, they won’t want to leave at all.

The value that the can add to a business is huge and is often overlooked since it can’t be quantified with a dollar value.

While graduates may not necessarily be able to bring in new business right away, they can offer the perspective that is needed to retain and enhance existing projects.


About the author

Gerard Holland is the co-founder of Outcome.Life and Outcome-Hub and specialises in empowering international graduates through independent advice and help. He and his co-founder Domenic Saporito spoke with Dynamic Business earlier this year. See: Stemming the brain drain: meet the duo behind the new start-up hub for international talent. In addition, Holland wrote Why start-ups and education providers should go hand-in-hand in Australia moving forward