Role of SMEs in education neglected but significant
This article appeared originally in the CHINADAILY on 28 Aug, 2020.
Authors: Victor Kwok, Head of Education and Youth Research and Charlotte Ho, Intern at Our Hong Kong Foundation.
With the spread of COVID-19, many economic activities have been suspended. Many companies — particularly small and medium-sized enterprises — face the prospect of layoffs, as Hong Kong’s unemployment rate rose to 6.2 percent, the highest in 15 years. University graduates this year are hit the hardest by economic recession, but younger students are also worried about their prospects. Meanwhile, as the QS World University Rankings indicate, although local higher institutions have an excellent research output, employers are less satisfied with university graduates’ performances. This shows that the current learning model is unable to fulfil market demands.
Based on a 2019 survey with the National Association of Colleges and Employers in the United States, the job prospects of graduates with placement experience are 13.8 percent higher than their counterparts. Not only do they have more job opportunities, they are also seen as more attractive during job interviews. Placements provide enterprises with a chance to find out more about students from different disciplines at a lower cost. They can also help companies raise their profile, making it easier for them to recruit in the long run.
An overview of similar programs in Hong Kong reveals that companies willing to invest in trainees are dominated by large corporations. However, over 98 percent of local companies are SMEs, and their workforce contributes to over half of the overall labor force in Hong Kong. SMEs often face various financial and HR-related challenges when they launch their placement plans.
Financially speaking, most SMEs are small-scale businesses, so they cannot invest heavily on recruiting trainees. Often, the placement comes to an end as soon as the trainees grasp the requirements of their work. The placement implies an extra cost. Moreover, HR-related reasons have prevented SMEs from hiring trainees, since the number of staff in an SME is limited, with 89 percent of SMEs in Hong Kong having no more than 10 staff. Small businesses have an average of two staff per company, making it hard to spare resources to handle or coordinate trainee work.
Nevertheless, one should note that many tech enterprises began as SMEs. Their lack of participation will limit students’ learning horizons, and therefore affect the nurturing of future talent.
With a more challenging job market, government support is crucial. Many countries have realized the importance of business-school partnerships and have established similar schemes. In Australia, the Industry Skills Funds administered by the government offers a subsidy of up to 75 percent of training costs to SMEs. Through reducing their financial burden, the government hopes to encourage these companies to offer placements.
In Canada, through the local subsidy scheme Canada Summer Jobs, SMEs and other public and non-profit organizations receive a financial subsidy for their regular placement schemes each summer. The scheme helps these SMEs and organizations to pay trainees during the placement period, and as a result fosters placement opportunities. In many higher education institutions abroad, such as the US, reports derived from placement experiences count toward the final grade or module credits.
The Hong Kong Special Administrative Region government should encourage SMEs to take a more active role in offering placement opportunities. Moreover, it would be helpful for the government to provide more placement subsidies, or even to take the lead in recruiting more trainees, so as to provide more varied job experiences and to nurture talent in the long run.
Universities are focused on academic training and have often neglected the role of practical experience. Holistic development of the youth is built on a healthy balance between practical work skills and academic development. In recent years, the concept of STEM education, which refers to the academic disciplines of science, technology, engineering and mathematics, has become more popular, and it exemplifies the importance of practical experience in academic development. Faced with an unpredictable social environment, young people in Hong Kong should equip themselves and broaden their learning horizons by capitalizing on different opportunities. The government must also be ready to respond to world trends and to support holistic youth development.