The behaviour of graduates in the SME labour market: Evidence and perceptions

This paper uses three surveys of graduates' and undergraduates' evaluations and perceptions of the conditions of work in small and medium-sized enterp rises (SMEs) in the U.K. The first survey addresses the relationship betwee n the actual career profiles of graduates and their perceptions of work in small vis-a-vis large companies. The second survey is a large-scale nationa l study of U.K. graduates' employment patterns. The third survey asked unde rgraduates how they expected working conditions might differ across firm si ze. The distribution of graduates across firm size is presented; this shows graduates to be disproportionately employed in larger firms. The work of g raduates across firm size is then described in terms of earnings; work barg aining and fringe benefits; training and the internal labour market; and th e work environment. For each facet, perceptions about work conditions are a lso explored. The evidence shows the working conditions for graduates are l ower quality in SMEs and that graduates broadly perceive this to be the cas e. The implications for policies which overlook these conclusions are discu ssed.