Employers’ Perspectives On Diploma Supplement To Enhance Graduate Employability

The concept of employability

One of the student objectives for pursuing studies in the higher education institution is to get a job. This reason becomes the priority agendas of higher education institutions to enhance graduates’ skills that would increase their attractiveness to potential employers (Deane, 2005). Sin and Neave (2016) also explain that higher education institutions were assigned a new role as a driver of economic progress by preparing highly skilled workers to meet the employers’ needs in the labour market. Employers expect with a high rate of skilled workers in the market would reduce the cost for human resource development programs in their workplaces, and with their employability skills, they have capabilities to make a proactive contribution to the organisation after commencing employment. Mason, Williams, & Cranmer (2009) define employability skill as “work readiness to understand the world of work,” which refers to knowledge about how people in the organisation do their jobs. Indeed, students need to develop employability skills by improving the competence-based qualifications such as communication, numeracy, literacy, IT, problem-solving skills, team-working skills, and learning how to learn. When the graduates know their individual’s qualifications, they would know how to present their capabilities to employers (Sin & Neave, 2016).

However, according to Archer and Davidson study in 2008, they found that there is a contrast between what some universities are promoting for the graduates’ skills and what is required by industry (Lowden et al., 2011). This contrast may cause mismatch the skills in the labour market. Employers considered more soft skills (e.g. communication skills and team working) rather than hard skills like a good degree qualification. Meanwhile, Jonbekova (2015) identifies that employers often complain that graduates “have heads full of theories and principles,” but they still lack technical skills. Thus, addressing this problem, employers have to provide human development training programs to develop transferable skills, skills required by employers, which are analytical and critical thinking, problem-solving abilities, interpersonal skills, working under pressure, teamwork, leadership skills, and recognition of lifelong learning.

Skill mismatch always becomes a concerned issue in the labour market over time. Technological innovations change rapidly giving impacts to diminish the value of some skills since it is replaced with other skills (García-Aracil & Van Der Velden, 2007). Additionally, Boudarbat & Chernoff (2010) addressed that the degree of skill mismatch also influenced by the types of job in which they identify that graduates who work in teaching or healthcare sectors, field-specific educational credentials, have the lowest skill mismatch problems. In contrast, jobs that do not require specific skills such as trade and hospitality are found have higher potential skill mismatch problems. Dolton & Vignoles (2000) found that skill mismatch also caused by education-related factors. For example, graduates from the social sciences, arts, and language programs are more likely to be overeducated rather than engineering, technical, and science graduates. However, Wolbers (2003) took consideration that socioeconomic factors contribute to the degree of skill mismatch, for example, individuals are more likely to take non-matching jobs instead of to be unemployed. As a result, in such cases, individuals cannot make use of their qualifications and skills.

Human capital and job-matching theories

Skill and education mismatches in human capital theory can be viewed as a part of an efficient labour market. Boudarbat & Chernoff, (2010) explain the reason for that view because it is a temporary phenomenon to replace one form of human capital to gain another. There are numerous aspects of human capital besides education such as experience and training. Indeed, human capital theory portrays that higher education has an important role in providing the skills needed to perform a complex job, making people more productive in sustaining economic growth. However, the labour market consists various job types that need many different skills and experience levels. Workers prefer to work in a job that matches their skills and education in taking consideration the feeling of usefulness to implement their knowledge and ability to control their jobs. Meanwhile, employers also prefer a match between workers’ competencies with the job needs because it will maximise the productivity of the firms. In job-matching theories, therefore, explain if a mismatch happens that it will affect people to suffer (e.g. wage effect) and push them to change jobs until a better match found.

Indonesian Qualification Frameworks

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Indonesia has actively involved in the ASEAN Economic Community (AEC) since 2015. One of the areas of cooperation is a human resource development program by implementing the ASEAN Qualification Reference Frameworks (AQRFs). The AQFRs functions as a device to enable comparisons of qualifications across ASEAN members (Shwin, 2015). In 2012 Indonesia adopted AQRFs to develop the Indonesian Qualification Frameworks (IQFs), driven by national needs to improve the quality, capacity building, and recognition of professional qualifications of its human resources. Moeliodiharjo et al., (2015) explain IQFs was signed by the President through the Presidential Decree 8/2012 to develop national education standards in enhancing quality assurances of graduates’ qualifications to meet the needs of the labour market. The IQF consists of 9 levels of qualifications, classified by both learning outcomes and job-specific competencies. Figure 1 shows that university graduates’ qualification is in the 6-level. In this level, graduates can work as a technician or analyst, who has competencies of knowledge, skills, and attitudes. Santoso (2013) described that graduates in 6-level capable of applying their expertise in science or technology, and adaptation to various situations. They also know their job responsibilities like taking a strategic decision to choose several alternative solutions. Therefore, through the IQFs, the employers would have easy access to understanding the qualifications of new graduates. The government cooperates with higher education institutions issuing diploma supplements to make the information of graduate qualifications publicly available, which the information stated in Bahasa and English (Moeliodiharjo et al., 2015). Hence, this document is assigned in bilingual formats to aid recognition for both academic and professional purposes at national and international level.

Graduate skills and employers’ needs

During the interviews, many employers address that they face skill mismatch problems in their workplaces. They claim that most of the time they found graduates’ qualifications do not fit the job needs. These mismatch problems often found in the manufacturing and retail companies. Meanwhile, services companies (hotel, telecommunication, and finance) face less skill mismatch in their workplaces because they recruit employees with professional qualifications to be employed in the specific job placement such as customer services, accounting or legal department. However, they think that the skill mismatch does not bother them so much because they take more into account of graduates’ soft skills compared to their degree qualifications because they need more technical and practical skills as well as positive attitudes (e.g. communication skills, teamwork, self-motivation and life skills) for the jobs rather than conceptual abilities.

“We encourage students to be involved in the organisation's activities to enrich their experiences working in the team that will give additional value added to themselves. In the organisation, students also can learn the dynamics of the social environment to adapt to different cultures and situations that will help them ready to work.”

– Human resource officers; a retail company, hotels, and a manufacturing company –

Representatives of the human resource department from some companies state that the involvement of students in the organisations will develop their soft skills team working that would help them to adapt to the new environment in the workplaces. Moreover, an accounting officer of a retail company gives an additional qualification that needed by graduates that is work experiences. She considers employee candidates have some working experiences that would help to develop their life skills and maturity to work in a company. However, a senior manager of the department of human resources in the hotel states her understanding that not many of new graduates already have working experiences. She hopes they would have a short working experience from the internship program. The internship program is an opportunity for students to apply their degree competencies into a practical world. In addition, she points out that employee’s appearances do matters in the hotel to keep the quality of customer services. Communication skills also one of an essential skill for graduates because they require being able to express ideas and views clearly in the speech by conducting the effective spoken communication. From these identifications, in general, employers have preferences for their employees to have strong soft skills to support their job performances.

In facing the global environment in the workplaces, employers encourage new graduates have developed their ability to speak one of the foreign languages, especially the English language.

“Our companies have many partnerships with foreign clients and customers such as from the Philippines, Malaysia, Japan, England and many more. We need our employees can actively to have communication with them to have information and knowledge transfers.”

– Senior managers; a financial institution, a telecommunication service company, and hotels –

Moreover, nowadays the business process and activities highly depend on technology. Employers expect their employees can follow up the rapid change from the technological advancement and information access. Indeed, employers think that is important for students to develop their IT (information technology) skills through the learning process in the universities. Other employers have agreed that academic qualifications and graduates’ academic achievements are important to support job performances in the company. Nevertheless, employers are looking to hire a new employee who has positive attitudes. They think that a positive attitude in the workplace helps employees to accomplish task appropriately in a better manner such as having the good relationship with colleagues.

“We look carefully employee candidates’ personality and attitudes, especially their honesty, self-motivated, and hardworking. Their manners will influence their job performances and team performances as a whole.”

- Senior managers; a financial institution, a telecommunication service company, a retail company, and hotels –

Employers’ responses on IQFs and diploma supplement

One of the aims of this study is to explore employers’ knowledge about the IQF policy and its implementation by issuing a diploma supplement. During the interview processes, we began the conversation by giving a brief explanation about the purposes of our study to employers and then asked them if they ever heard about this policy before. Most of the employers answer that they never know about this policy because there is no a socialisation program from the government. Hence, they have no clues about the purpose of this policy.

Aside from those employers, two representatives have heard about the IQF policy even though they do not know about a diploma supplement. Two representatives are from the telecommunication service company and a hotel. They know about the IQFs because their companies have to keep improving the employees’ qualifications by participating in the training or short course programs to get a certificate for certain skill achievements. For doing these activities, they often have to cooperate with higher education institutions and the government. Employers who know about this policy give positive responses for the implementation of the IQFs in the national education system. As a result, through this policy, they expect graduates to develop their qualifications with certified competencies.

“We expect the IQFs and a diploma supplement can enrich graduates’ qualifications with employability skills. It will be better if the information on a diploma supplement supported by their portfolios or skill certifications.”

– Senior managers; a telecommunication service company and a hotel –

The use of diploma supplements in the recruitment process

The diploma supplement is a transparency tool to aid recognition for both academic and professional qualifications in the labour market. Greater transparency helps employers in understanding and interpreting graduates’ qualifications and competencies (Deane, 2005). This process is needed to recruit great candidates. To check the usefulness of a diploma supplement for the hiring process in Indonesia labour market, during our interviews, we explore employers’ views about this issue. The findings show that most employers agree that a diploma supplement provides sufficient information to help employers in assessing the candidates’ competencies. A human resource manager of a manufacturing company argues that ‘the information in the supplement can be used to analyse the candidates’ profiles and background.” In contrast, few employers from manufacturing companies disagree that the diploma supplement provides enough information to identify graduates’ qualification. They state that it would not help much in the hiring process because we need information not only about their degree qualifications and technical skills but also their social activities in the neighbourhood. From these contrary views, the existence of diploma supplement gets positive responses from the employers though it still needs some improvement.

Through transparency of graduates’ qualification, employers can assess their employability skills. If their skills match with the job needs, they have the higher probability to employed in the company. However, the hiring process has some stages. If the employee candidates, who have a diploma supplement, can pass all the selection process, it helps to develop trustworthy of employers for the validity of information in the supplement. As a result, it has positive impacts in shorting the recruitment time and minimise the costs for human development programs.

“A diploma supplement might help them to pass the administration selection, but to be employed in the company they have to show their high capabilities in the psychological test and interviews. Through other selection stages, we can identify the validity of candidates’ competencies to find the best candidates. This process helps companies to re-training employees and reduce the costs for human development programs.”

– A human resource officers, a communication service company, a retail company, and hotels –