Definition of Employability
Employability has been used as a performance indicator for higher education institutions (Smith et al, 2000) and represents a form of work specific (pro) active adaptability that consists of three dimensions: career identity, personal adaptability and social and human capital (Fugate et al, 2004). At the same time, Knight and Yorke (2004) have put forward the four broad and interlocking components of USEM account of employability:

Understanding (of the subject discipline)
Skilful practices in context
Efficacy beliefs
Meta-cognition

Nabi (2003) mentioned that employability is about graduates possessing an appropriate level of skills and attributes, and being able to use them to gain and remain in appropriate employment. From a human resource development view, employability is a concept that emerged through the 1990s along with a growing perception among employees that they cannot count on their employers for long-term employment. Employability is a promise to employees that they will have the skills to find new jobs quickly if their jobs end unexpectedly (Baruch, 2001). Prior to this, Harvey (2001) has defined employability in various ways from individual and institutional perspectives. Individual employability is defined as graduates being able to demonstrate the attributes to obtain jobs. Commonly, institutional employability relates to the employment rates of the university graduates. However, Harvey argued that employment outcomes of graduates are not an indicator of institutional employability. He presented an employability-development model shown in Figure 1. The model illustrated a multi-perspectives view of employability with all related stake-holders.
Employability and Higher Education: Key issues
Despite the burgeoning research on employability and availability of a wide range of models purporting to explain it, employability itself remains a contentious concept open to a ‘plethora of micro-interpretations’ (Harvey, 2003). This can make the task of curriculum development particularly difficult. [p5]
The growing importance of employability
According to McNair (2003), graduate employability has become a more important issue for institutions. This is: because of the changing nature of the graduate labour market, mass participation in HE, pressures on student finance, competition to recruit students and expectations of students, employers, parents and government (expressed in quality audit and league tables).
On a broader level, it has been noted that higher education, through the generation and dissemination of knowledge, directly impacts economic competitiveness on a national and international level (Brown et al, 2003; CIHE, 2003; UUK, 2007; DIUS, 2008).
The significance of the UK HE system to the wider economy has been generally acknowledged since the Robbins Report was published in 1963. However, this relationship has been made more explicit in recent years and it was with the publication of the Dearing Report (1997) that the connection found prominent expression. Dearing strongly expressed the need for a globally competitive economy containing highly skilled, highly trained and highly motivated graduates who could perform effectively on the world’s stage. This coupled with the further development of human-capital theory (Becker, 1975), which asserts that one role of government is to provide and nurture conditions which will increase the pool of skilled labour, has created a fertile forum for the discourse of ‘employability’ to flourish.

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The changing nature of the graduate-labour market Dearing (1997) stated that ‘learning should be increasingly responsive to employment needs and include the development of general skills, widely valued in employment’; however, the labour market is changing dramatically and at a much faster pace than in the past. Emerging markets and rapid expansion of the knowledge economy means that the same set of employability skills which were in demand ten or even five years ago may not be required in the evolving graduate-employment market. Employers are increasingly seeking flexible recruits who can work effectively in the ‘de-layered, down-sized, information-technology driven and innovative’ organisations in existence today (Harvey et al, 1997: 1).
Employers are seeking people who can do more than just respond to change, they need those who can lead change. McNair (2003) comments on the speed of labour-market development and notes that a higher percentage of the workforce is employed in small and medium enterprises (SMEs), a trend also reflected in graduate-employment statistics. While this may offer opportunities to gain early responsibility in less structured and hierarchical work environments, graduates need to have the skills to create rewarding graduate roles role in what Purcell and Elias (2004) refer to as ‘niche-graduate occupations’. Niche-graduate occupations are those: where the majority of incumbents are not graduates, but within which there are stable or growing specialist niches that require higher education skills and knowledge (Purcell and Elias, 2003: 5).
Students therefore need to be equipped with skills which enable them to ‘grow’ jobs to graduate level. HE has been criticised by some as being too slow to recognise the changing nature of the labour market and is producing graduates who are ill equipped to deal with the realities of graduate employment (CBI, 2006).
Government policy to widen participation in HE, aiming to increase the proportion of 18-30 year olds to 50 per cent by 2010, will no doubt have a significant impact on the supply of graduates in the labour market. According to Elias and Purcell (2004) participation rates in UK HE almost doubled in the decade 1991-2001, from 1.2 million students to 2.1 million. Such rapid expansion has raised concerns that the increase in the number of highly qualified individuals may not be coupled with an equivalent rise in demand for their skills and qualifications (Brown and Hesketh, 2004; Brynin, 2002; Keep and Mayhew, 1996, 1999 in Elias and Purcell, 2004). While Elias and Purcell (2004) conclude that the expansion of HE at the end of the twentieth century has been primarily positive, Purcell et al (2005: 16) express concern that ‘the fit between the supply of graduates and employers’ demand for their knowledge and skills clearly falls some way short of ideal’.
There are mixed reports about whether demand for graduates will be affected by increasing participation in higher education. The supply of graduates has been steadily rising and there were 258,000 graduates in 1997 compared with 319,000 in 2007 (HESA, 2007). Despite rising numbers leaving HE, according to DIUS (2008), demand for graduates remains high and the latest report by the Association of Graduate Recruiters (AGR 2007) suggests that the number of graduate vacancies increased by 15.1 per cent in 2007. Both DIUS and AGR do however raise concerns about the mismatch between what employers are looking for and the skills graduates possess (see Chapter 2 for a more detailed analysis of skills). Despite much controversy about the impact of increasing student numbers, it is indisputable that graduates are facing a changing, more competitive labour market and they need to be prepared accordingly.
The changing nature of the higher education landscape
Beyond pressures facing graduates in the labour market, universities are facing increasing demands to account for what they do and prospective students and parents are becoming discerning ‘customers’ when shopping for the most suitable HEI (McNair, 2003). Given the importance of employability in the equation, institutions cannot overlook the significance of developing this aspect of provision. Allison et al (2002) allude to the pressures facing HEIs as evidenced by the publication of increasing numbers of performance indicators and guidance documents such as the QAA Code of Practice for Careers Education, Information and Guidance (2001) and the Harris Review of Careers Services (2001).
Yorke and Knight (2002: 4) have expressed some concern about the way in which statistics on employment rates used in league tables can distract HEIs from the important task of enhancing employability. They state that:
once employment rates become an institutional performance indicator (HEFCE, 2001), there is a pernicious backwash as institutions seek to ‘improve their scores’ since they know that these scores will end up in the so-called ‘league tables’ published in the press.
Consequently:
there is a danger that maximising the score will command more institutional attention than fulfilling the educational aim of enhancing employability.
Higher Education in the UK has gone through considerable change during the last two decades. The move from an elitist system to one of mass participation has been highly significant. Shelley (2005) indicates that the number of 18-30 year olds in HE rose from 12 per cent in the 1980s to 43 per cent by 2002. This he points out has not been matched with commensurate levels of funding and between 1977 and 1997 government expenditure per student fell by 40 per cent. In recent years however funding levels have improved with HEFCE announcing a figure of £6,706 million in recurrent funding for 2006-07 to universities and colleges in England (HEFCE, 2006).
Increased funding levels have led to systems of accountability being put in place. These in turn have led to the development of managerial practices intended to promote new efficiency and customer-focused, customer-led policy frameworks which should ensure success in a new competitive market. In the eyes of commentators such as Bekhradnia (2005) the last decade has seen a mixture of successes and failures of managerial initiatives.
For some commentators (e.g. Brown and Lauder, 1999; Green, 1993) these policy directives coupled with the emphasis placed on the contribution of HE to the global economy has led to the ‘marketisation’ and the ‘commodification’ of HE and its teaching. Brown and Lauder (1999) contend that there has been a movement towards a ‘neo-Fordist’ approach to HE in which teaching and learning is now emulating the Fordist manufacturing processes of the early twentieth century. This concept was characterised by the production assembly line ‘just-in-time’ unitisation production methods of manufacturing industries. For HE this manifests itself in several ways which Brown and Lauder describe as: learner organisations with emphasis on ‘numerical’ flexibility (i.e. outcome-related education and cost-driven agendas), mass production of standardised products (i.e. modularisation/unitisation of curricula), and emphasis on quality systems to ensure standardisation which result in a bland mechanistic experience of learning. [p9]
Given the apparent consensus among the key stakeholders about which skills are important and on the need to address employability in HE, it seems strange that there is so little commonality in approaches taken by universities to enhance employability. There remains considerable debate on how best enhancement of employability can be achieved, and indeed the extent to which HE can influence this aspect of student development. In an extensive review of HE provision, Little (2004: 4) concludes that while there is:
international concern that higher education should enhance graduate employability, there is little evidence of systematic thinking about how best to do it, let alone any model that can be badged as ‘best practice’ and adopted wholesale.
Developing a common understanding of how to enhance employability is a highly complex issue, although Knight (2001) believes government and others persist in treating it in much the same way as ‘innovation’, as ‘something simple, to be planned, delivered and evaluated’ (Knight, 2001 cited in Lees, 2002: 1).
Attempting to form a coordinated and holistic approach to skill development, government has introduced many programmes and initiatives to promote skill development and these seem to have had some impact. The DfEE Higher Education Projects Fund 1998-2000, for example, included projects to develop key and transferable skills and Harvey, Locke and Morey (2002) have reviewed the trends in institutions’ approaches to embedding employability. They note that there has been a shift in HE from developing the specific employability skills within specialist modules to a more holistic approach where institutions are embedding employability and skills throughout the curriculum. They present examples of employability initiatives from different HEIs which were highly varied and based on differing philosophies.
Perhaps it is inevitable that institutions and even individual departments and academics will vary widely in their approaches to developing employability as they will be operating in the context of their own frame of reference about education, and will be dealing with students who will vary hugely in their ability and ambitions. However, it is clear from the research on employability skills that the attributes which employers value and educators recognise as important are very similar, and there is hope that such consensus in thinking can contribute to a more coherent approach to curriculum development.