The quality of college graduates appears to be on the decline, with many lacking work-ready skills, according to small and medium-sized businesses.
They also say the record number of school leavers going on to third level is not a positive development and reflects a lack of alternatives such as apprenticeships.
The observations are contained in a report by Isme, the Irish Small and Medium Enterprises Association, in response to a proposal by the Minister for Education Richard Bruton to make employers contribute more to the cost of higher education and training.
Mr Bruton wants employers to pay an additional €200 million through increases in payroll levies to help fund the expansion of the sector over the coming years.
The Isme report says that while extra investment is needed, it has concerns over the way the higher education sector is being run.
“We believe that there are many issues with HE [higher education], including high drop-out rates, the high labour cost and the fact that industry does not see graduates as work-ready,” the Isme report states.
It says more alternative high-quality training and education routes – such as traineeships and apprenticeships – are required that do not necessarily lead to a degree.
High salaries
Small firms are also concerned about high salaries in the third-level sector given the failure to reduce public sector wages in line with the decline in the private sector during the economic downturn.
This, it says, would “make us nervous” of the likelihood of additional funding being properly monitored and spent appropriately.
Fianna Fáil in its submission has lent its support to Mr Bruton's plan to increase a payroll levy for employers – known as the National Training Fund – over the next three to four years by 0.3 per cent. This would yield up to €200 million in additional funding.
The party's education spokesman, Thomas Byrne TD, said he believed there was scope for employers to pay more.
The party’s submission to the Government consultation process on the issue states that employers have no voice or role in the governance of the fund, and that colleges need to become more responsive to the real needs of business.
“This would in no way compromise the mission of these institutions to provide a rounded education to young people,” the submission states.
“Rather, it can be done by practical measures like facilitating businesses with part-time courses or through greater involvement of businesses in vocational skills development, etc.
“However, all of the above should not take away from the fact that we believe that the entire increase in the National Training Fund should be made available to general funding of universities and Institutes of technology.”
Plans to improve the State’s response to meeting skills gaps in key sectors, meanwhile, are set to be announced shortly with the establishment of a new national skills council.
The move comes in response to concerns that the scale of skills demands by employers is exceeding the capacity of education and training providers to meet them.
Skills gaps
The new body will oversee research and advise on prioritisation of key skills gaps across industry and how they can be met.
It is understood that the council will be chaired by Mr Bruton and include representatives from business and universities as well as key State bodies such as Solas and the Higher Education Authority.
The body will also report on how education and training providers respond to meeting these skills gaps.
While the education and training landscape is a maze of different providers, policymakers hope the new council will co-ordinate activity across the sector.
Mr Bruton hopes to increase the contribution employers make to higher education and training in exchange for a greater say in how skills gaps can be met.
He has launched a consultation process with employers, aimed at increasing their contribution to higher education.
