Employing Fresh Graduates by Companies in Ghana – HR or Finance Decision or Both?
Data from the Institute of Statistics, Social and Economic Research (ISSER) of the University of Ghana shows that only 10 percent of graduates find jobs after their first year of completing school and that it may take up to 10 years for a large number of graduates to secure employment due to varied challenges that ranged from the lack of employable skills, unavailability of funding capital for entrepreneurship, poor attitudes of graduates towards job opportunities, as well as the low capacities of industry to absorb the huge numbers. This was revealed by Mr Kofi Asare, an Education Consultant at the 2017 MasterCard Foundation Annual Learning Summit in Accra.
No matter the reasons accounting for the low fresh graduates’ employment, it goes to also suggest that, Companies in Ghana are failing to identify new and fresh batch of future corporate leaders and change makers. Of course, often a great business decision, trying to decide between hiring a recent graduate or pursuing a more experienced workforce veteran, there are many pros and cons that need to be considered but outweighing the negatives, the positives of hiring fresh graduates can lead to a wide range of business advantages and no matter what the needs, giving a fresh graduates their first employment opportunity could prove to be an extremely wise long-term decision for a business.
It is worthy to also note that most industry players are already in the game of these fresh graduates employment through the Graduate Management Trainees program; which most graduates consider as an unfair tactics with regards to some of the criterion used.
If you either think employing fresh graduates is such an easy task, then you had better revise your notes because one of the core “board room” arguments that arises in this kind of exercises is who decides to or recruits fresh graduates – The HR Manager or the Finance or even both? Generally, you will say HR but could there be any other reasons?
Some HR professionals’ decisions on employing fresh graduates which are human resource development and capacity are elaborated as follows:
That fresh graduates are at comfort level with new technology – Without question, one of the biggest advantages of hiring a graduate is his/her ability to navigate through new, innovative technology, especially new age computers and all of their essential work-related applications. Because a portion of the current workforce started their careers before computer technology took over the business world, a lot of individuals, unfortunately, don’t have the ability to follow many computer processes and applications. By being raised in a generation that’s more dependent on computer technology than ever, recent graduates will be able to quickly learn all of a businesses’ computer applications.
Fresh graduates think About the Long Term – Even though job positions need to be filled relatively quickly, a business should still consider the long-term capabilities of their newest possible employee. Without question, because of their new drive students and college grads are anxious to climb all of their various corporate management matters. By thinking about the long-term needs of your company, hiring fresh graduates with a lot of drive and potential could definitely be a much smarter business decision. With the ability to be trained and guided toward specific managerial roles, fresh graduates usually offer more flexibility than more experienced professionals.
Many fresh graduates are quick learners with adaptability – Not taking the old saying ‘you can’t teach an old dog new tricks’ too literally, such graduates definitely have the ability to absorb, understand and execute new instructions and training at a much higher rate than older workforce members. Also, because they are quick learners with the ability to multitask, fresh graduates prove to be a better hiring option for a wide range of business options. Eager and looking to quickly please their superiors, fresh graduates also offer businesses the willingness to do a lot of odd type of office jobs. On top of that, fresh graduates are usually more willing to help other coworkers when needed.
Fresh graduates are identified with new, innovative ideas and fresh perspectives – Graduates can inject new ideas and apply current thinking from academia. They are keen to understand the way things are done and are not afraid to ask “why?” This can prove useful for a company when analyzing old methods and developing efficiencies wherever possible. New to the corporate world, fresh graduates haven’t become accustomed or cemented to a particular way of doing things from previous roles. As such, they can bring an innovative, fresh new perspective to your organization as they also increase diversity within the teamwork.
If none of the reasons above have convinced you, consider what the Finance professionals also consider as some of their decision tools for such employment:
New graduates have lower salary expectations – Undoubtedly, it is a goal of any business to save on costs and be profitable. Yes, one will have to pay for experience – and since it is a lack of experience that sparked this whole discussion in the first place, new graduates are a cheaper alternative to more seasoned employees because due to their lack of experience, a business can offer a lower employee compensation package. Now, this doesn’t mean a company should pay new graduates extremely low salaries (i.e. salaries that fall drastically below market rates). It does however provide the opportunity for companies to hire a talented employee at an entry-level rate and to invest in developing that employee to become a top performing star within your organization.
Companies end up saving on annual staff cost – One of the main functions of a business is to earn profit through whatever specific trade, services or goods they offer. Probably the biggest advantage that the employment of such graduates gives a business is the lower cost of the employers’ yearly staff cost. Since already established workers naturally require a higher salary, many employers might be reluctant to pursue an older candidate and opt for fresh graduates with potentials.
Proven return on investment – It is believed that fresh graduates ideas and skills can make a huge difference to a company’s’ bottom line. For instance, according to research by the Association of Graduate Recruiters (AGR), graduates contribute approximately £1 billion of added value to the UK economy on an annual basis.
Speed to value – Graduates learn more quickly and provide more immediate financial returns. They are more enthusiastic and willing to take on challenges. Graduates understand and have the ability to adapt to change.
Tax Savings – Employment of these graduates is associated with some tax benefits or savings as stipulated in the Income Tax Act 2015, (Act 896). Finance managers with their cost minimisation drive will want to take advantage of Section 8 of the Sixth Schedule of Act 896 which says that in calculating the income of a company from conducting a business for a year of assessment, the company is entitled to an additional deduction for salary and wages paid during the year to a fresh graduate from a recognised Ghanaian tertiary institution. For this purpose, the Act defines “fresh graduate” to mean a person who has graduated from a tertiary institution for the first time, whether or not that person was previously employed.
This means that, if 1% of a company’s workforce is made up of fresh graduates, that company is entitled to deduct 10% of the salaries and wages paid to the fresh graduates as additional deduction and If is more than 1% but less than 5% of workforce, then 30% of their salaries and wages is deductible. Also 50% of their salaries and wages is deductible if more than 5% of the workforce is fresh graduates. Just do the calculation and you will be surprised!
Generally, is obvious fresh graduates employment reduces graduate employment, improves organisational efficiency and financial performance, it is also evident that no “one man” takes a decision to employ fresh graduates and such decisions are arrived at taking cognizance of the human development and financial strategy of the entity concerned, making it more of a corporate decision than a HR or Finance decision.
Indeed, there are several reasons aligned for why companies in Ghana hardly recruit fresh graduates spanning from mismatch of industry expects and what the tertiary institutions offer to lack of employable skills etc, but until we develop a sustainable entrepreneurial policy and infrastructure, the government and other stakeholders will continue to rely on the private sector to absorb these graduates.