Operational employability model: A case study of graduate employability in Croatia

Tecilazić, Ana Article Operational employability model: A case study of graduate employability in Croatia Business Systems Research (BSR) Provided in Cooperation with: IRENET - Society for Advancing Innovation and Research in Economy, Zagreb Suggested Citation: Tecilazić, Ana (2024) : Operational employability model: A case study of graduate employability in Croatia, Business Systems Research (BSR), ISSN 1847-9375, Sciendo, Warsaw, Vol. 15, Iss. 1, pp. 110-130, https://doi.org/10.2478/bsrj-2024-0006 This Version is available at: https://hdl.handle.net/10419/318834 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ 110 Business Systems Research | Vol. 15 No. 1 |2024 Operational Employability Model: A Case Study of Graduate Employability in Croatia Ana Tecilazić Algebra University, Zagreb, Croatia Abstract Background: The employability of graduates has become a central topic in higher education policy and research. However, the construct still needs to be clarified. Objectives: The objective of this paper is to demonstrate the applicability of an operational employability model in analysing the transition from study to work on a sample of graduates in Croatia as part of a larger Eurograduate pilot survey. The model has been rooted in the theories of human capital, cultural and social capital and constructivist educational theory. Methods/Approach: Factor analysis was applied to reduce the number of measured variables into factor scores that were used as predictors in multiple regression analysis. Cox regression, logistic regression and linear regression were applied to test the employability model. Results: The results showed that cultural capital, human capital, and bridging social capital, as well as high-impact practises during studies, such as volunteering and internships, have a positive impact on the likelihood of finding employment in less time after graduation in an occupation that vertically matches the qualification, and in a job with a higher monthly income. Conclusions: The results have shown that cultural capital, human capital, and bridging social capital influence the probability of finding employment in a job that matches the level of qualification in a shorter time after graduation and in a job with a higher monthly income. These findings have practical implications for educators, policymakers, and employers, providing insights into the factors that can enhance graduate employability. Keywords: employability operational model; graduate employability; human capital; social capital; cultural capital; constructivist theory JEL classification: A23, J00, J22, J24 Paper type: Research article Received: May 27, 2024 Accepted: June 21, 2024 Citation: Tecilazić, A. (2024). Operational Employability Model: A Case Study of Graduate Employability in Croatia. Business Systems Research, 15(1), 110-130. DOI: doi.org/10.2478/bsrj-2024-0006 111 Business Systems Research | Vol. 15 No. 1 |2024 Introduction Recent studies have highlighted significant trends in education and employment outcomes across Europe, particularly concerning the impact of education length on youth employment. Krpan et al. (2023) utilised a hierarchical clustering approach to examine how variations in the duration of education correlate with employment rates among European youth, revealing distinct patterns that suggest longer educational periods might lead to better employment prospects. Additionally, the role of cultural and international dimensions in shaping innovation and entrepreneurship within higher education institutions has been explored by Grèzes (2021), who proposed a typology of learning universities that integrate these aspects to foster entrepreneurial mindsets. Moreover, the shift to e-learning during the COVID-19 pandemic, as analysed by Pejić Bach et al. (2023), underscored how different countries' development levels and pandemic responses significantly influenced the effectiveness of online education, further impacting educational and employment outcomes. In recent years, there has been considerable concern about the effectiveness of institutional, national, and supranational policies and practices in equipping higher education students for the labour market. This has led to an increased interest in employability, which is usually understood as "the capability to obtain and maintain a job and ensure the supply of competence in the labour market” (Siivonen et al., 2023, p.1). Various employability models and frameworks have emerged with “narrow”, “broad”, or “holistic” theoretical foundations or with a specific focus (Eimer & Bohndick, 2023, p. 3). They reflect different perspectives on employability that are taken by a plurality of stakeholders, each with a “different approach and scope serving to highlight different issues and domains of action in which they work.”(Williams et al., 2016, p. 3). One of the first frameworks for analysing the concept of employability was developed by Hillage and Pollard (1998, p.2), who argued that employability depends on “the knowledge, skills and attitudes they possess, the way they use those assets and present them to employers and the context […] within which they seek work. Three of the four components in their framework focussed on graduates’ skills and knowledge and contain only one external factor that influences employability. McQuaid and Lindsay (2005) broadened the analytical framework of employability by placing greater emphasis on the external circumstances that influence employability, such as education and training, work experience, personal qualities and labour market conditions. They defined employability as a set of individual and organisational attributes that enable individuals to secure and maintain employment and to move within and between jobs. Another example of the balancing of labour supply and demand through sets of micro and macro factors on both sides is the Kleinman and West model (1998). Micro factors on the supply side include personal and social skills, occupational skills and qualifications, and key competencies such as literacy and numeracy. In contrast, macro factors include the availability and accessibility of transport and childcare, as well as the presence of various forms of discrimination based on age, race, and so on. On the demand side, micro factors include the number of jobs in the local economy, the type of employers, and formal and informal employment procedures. Macro factors include labour market demand at the economic level, macroeconomic policies, and confidence in the economic sector. Although the model attempts to consider and balance factors on the supply and demand side when looking at employability and to point out the importance of the context of current public policy, the situation in education, the labour market and the economy, it is still built on a one- 112 Business Systems Research | Vol. 15 No. 1 |2024 dimensional interpretation of employability as a function of the match between supply on the education system side and demand on the labour market. In an effort to consider internal and external factors of employability, Thijssen et al. (2008) have proposed a model in which they represent the construct of employability through three conceptual components that describe employability like concentric circles from the narrowest to the broadest definition. The first component, in the narrowest sense, refers to a person's ability to work at a particular job. The second component refers to the possession of various overarching skills that enable the individual to be employed in different jobs, and the third includes external, contextual factors such as personal and workplace circumstances that influence the individual's chances of success in the labour market. More recently, Tomlinson (2017) has outlined a graduate capital model that encompasses a range of human, social, cultural, identity and psycho-social dimensions acquired through graduates’ formal and informal experiences. The model demonstrates how the components of the different capitals overlap and relate to graduate employment by exploring how these forms might be developed in and around higher education. Based on the Graduate Capital Model, Tomlinson (Tomlinson et al., 2022) developed a psychometric instrument called the “Graduate Capital Scale” that seeks to operationalise this capital and help students to self-assess their confidence in transitioning to the labour market. From the overview of the development of employability analytical frameworks and the employability construct, it is clear that the early models largely focus on the characteristics of the individual, while more recent approaches emphasise the interaction between different interrelated factors and different forms of capital, such as human capital, social capital, cultural capital, identity capital and psychological capital (Nghia et al., 2020; Pham & Jackson, 2020), in addition to health capital, scholastic capital, market-value capital, career identity capital, and economic capital (Donald et al., 2024a) as well as to resources that influence graduates' prospects in the labour market (Nghia et al., 2020) and contextual determinants such as the local labour market opportunities and life circumstances (Forrier et al., 2018). The development of employability models that incorporate internal and external factors has enabled a "much broader thematic framework with a clearer focus on the individual and macro-economic dimensions of employability and a shift in focus from hard-to-employ groups to all labour contingents" (Rimac & Ogresta, 2018, p.14). However, researchers agree that more research is needed to capture the dynamic nature of employability development (Akkermans et al., 2024). The construct of employability is still vague because employability models and analytical frameworks often need a solid theoretical basis, tools and the availability of comparable data to test them systematically and across countries. One step forward in systematic data collection is the Eurograduate survey, which was initially piloted in 2018 with data sets from eight EU Member States (Meng et al., 2020) and then rolled out to seventeen EU Member States in 2022 (results yet to be available). The availability of data collected through the Eurograduate pilot survey enabled a more comprehensive approach to analysing the employability factors of graduates. The operational model presented in this paper has been developed based on the Eurograduate pilot survey (Rimac, 2020) , and it focuses on early career outcomes of employed higher education graduates. Three research propositions establish the employability predictors associated with three forms of capital and the learning environment during higher education. • RP1: Human, cultural, and social capital and the activating learning environment during higher education positively influence finding employment in an occupation that matches the level of the acquired qualification. 113 Business Systems Research | Vol. 15 No. 1 |2024 • RP2: Human, cultural, and social capital and the activating learning environment during higher education positively influence monthly incomes. • RP3: Human, cultural and social capital and the activating learning environment during higher education positively influence finding employment in a shorter time after obtaining the qualification. The objective of this paper is to elaborate on an operational employability model based on the theories of human capital, cultural and social capital, as well as on the constructivist educational theory and tested on a set of data collected with the pilot Eurograduate survey. The operational employability model presented in this paper is based on the model used to analyse the employability of graduates from higher education institutions in Croatia (Tecilazić, 2023). The first part of this paper, after the introduction, describes the theoretical framework, and the second part details the design of the operational employability model based on the given theoretical framework and adapts it to the Eurograduate instrument. The third part presents the methodology used to test the operational employability model on a sample from the Eurograduate pilot survey, and the fourth part contains the results of the analysis and the discussion. The conclusion summarises the relevance of the operational employability model and identifies opportunities for its further application as well as its limitations. Theoretical Framework The broad theoretical framework for understanding employability used in this study includes the economic theory of human capital developed in the 1960s by the economists Gary Becker and Theodore Schultz (Becker, 1962; Schultz, 1961), the theories of cultural and social capital advanced by the French sociologist Pierre Bourdieu (Bourdieu, 2018, 1986; Bourdieu & Passeron, 1990), and constructivist theories of education (Davis et al., 1993; Phillips, 1995). Drawing on the theories from multiple disciplines, this theoretical framework offers an interdisciplinary basis for understanding the complex employability construct. Human capital is generally and broadly defined as the skills and competencies of a person. De la Fuente and Ciccone describe it as “knowledge and skills embodied in people and accumulated through schooling, training and experience that are useful in the production of goods, services and further knowledge” (Fuente & Ciccone, 2003, p.10). Human capital in the mode of acquired knowledge is gained through formal high-level education and training and empowers students in the labour market (Tomlinson, 2017). Human capital theory emphasises the importance of education and training for the acquisition of skills and knowledge and, thus, for the improvement of an individual’s productive capacity (Becker, 1962). The research findings support the basic principles of human capital theory, according to which investment in education and training helps to improve individual and social outcomes, including the employability of individuals (Babić, 2019). According to the principles of human capital theory, individuals are responsible for the decisions on investment in their education as well as for their educational and career outcomes. However, critics of human capital theory argue that its neoliberal ideology and the neoclassical economic principles that underpin human capital theory narrow education to its economic purpose and focus on technical skills and knowledge necessary for finding employment (Edeji, 2024). In such a way, human capital theory as a profit-based neoliberal ideology “neglects the influence of social structure on educational inequality, which greatly contributes to educational inequity” (MacKenzie & Chiang, 2023, p. 8). 114 Business Systems Research | Vol. 15 No. 1 |2024 Moreover, to focus only on a person’s skills and knowledge in explaining career outcomes would mean ignoring the broader social context that plays an important role in creating educational and training opportunities for individuals (Badescu et al., 2011; Baranović et al., 2015; Black & Smith, 2006; Coleman, 1988; Ortiz-Gervasi, 2023; Zhang, 2005). The broader social context that determines a person’s opportunities (Loury, 1977, 1981) includes an individual's cultural and social capital which determines their educational choices (Becker & Hecken, 2009; Boudon, 1974; Erikson et al., 2005; Puzić & Košutić, 2015; Van De Werfhorst et al., 2003) thereby influencing different evaluation of the costs, benefits and risks associated with educational choices (Boudon, 1974), as well as academic achievement (Bourdieu, 2018; Bourdieu & Passeron, 1990) and facilitating access to social resources and employment strategies that are critical to securing quality employment (Breen & Goldthorpe, 1997; Collins, 1979; Halsey et al., 1980). The theory of cultural capital states that a person's cultural knowledge, family background and behaviour can have a significant impact on their life chances and influence their social mobility and economic success. Cultural capital is a form of knowledge acquired through socialisation and education that can be institutionalised in the form of parents' educational qualifications and used to gain access to certain social and economic opportunities (Bourdieu, 1986), who argued that cultural capital is often unequally distributed, with members of higher social classes having greater access to it than members of lower social classes. This inequality often manifests itself in early educational choices, later academic performance and later career paths, whereby educational institutions contribute to the reproduction of social inequalities. However, the educational experience and its formative potential can significantly alter educational and professional outcomes, as different educational practices and learning experiences have an impact on the development of human potential. According to constructivist educational theory, people construct their knowledge by building on their previous knowledge and experiences, developing their overall understanding of the world and matching their new ideas and experiences against existing knowledge (Carlile & Jordan, 2005). The constructivist learning paradigm emphasises that teachers should actively engage students in learning and create a learning environment (Barr & Tagg, 1995) and is the basic theory behind the student-centred learning approach (Matthews, 2020). Empirical research supports the constructivist approach and proves that students’ performance is improved when supported by activating learning environment (Ahmad et al., 2015) where teachers’ intentions are focused on developing, changing or transforming students’ conceptions instead of instructing them or conveying the content (Prosser et al., 2005). Such transformative learning brings about a change in the “assumptions through which we understand our experiences, and that selectively shape and delimit our expectations, perceptions, cognition, and feelings” (Mezirow & Taylor, 2009, p.20). In line with constructivist and transformative theories, knowledge and skills are more likely to be developed through student engagement and activating learning practises such as teamwork (Li & Guo, 2015), project-based learning and flipped classrooms (Schell & Mazur, 2015), research-based learning (Børte et al., 2023), problem-based learning, critical thinking, deep learning, case studies and research-based learning approaches. Research suggests that graduates are more satisfied with study programmes designed in a more problem-based learning and teaching manner and would choose the same study programme at the same institution rather than graduates who studied at programmes with a more traditional lecture-based approach applied to a greater 115 Business Systems Research | Vol. 15 No. 1 |2024 extent (Tecilazić, 2022). Therefore, some researchers argue that shifting from traditional lecture-based teaching to more student-centred, interdisciplinary learning supported by information and communication technologies and international collaboration is needed (Misseyanni et al., 2018). In addition to these activating pedagogical approaches, research shows that specific high-impact practises integrated into the curriculum or extracurricular activities such as study abroad (Adle, 2021), work-based learning and internships (Jackson et al., 2024; Rowe et al., 2023) paid or unpaid student jobs, volunteering, student research projects and community engagement activities have a proven impact on the employability of graduates (Wolniak & Engberg, 2019). Therefore, the role of higher education in supporting students to develop their employability skills, which is necessary to facilitate their transition to the labour market, is pivotal (Van der Baan et al., 2024). Finally, the choice of employment strategies of graduates is influenced by the social capital of the individual. According to Bourdieu, social capital is a resource made up of family and personal social connections and relationships. It is defined as “the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalised relationships of mutual acquaintance and recognition” (Bourdieu, 1986, p.26). Social networks are built on trust, which facilitates cooperation and the exchange of valuable information and resources (Putnam, 1995). They can, therefore, play a role in creating opportunities for educational and economic advancement (Coleman, 1988). Social capital, which manifests itself in the form of social networks, connections and relationships, can be used to gain access to valuable resources such as information and social support (Lin, 1999) and can also help to find better-paying jobs, thereby improving individual and societal outcomes (Granovetter, 1995). The theories of human, cultural and social capital supported by the constructivist theory formed the theoretical framework for the development of the operational employability model, which encompasses various factors that are assumed to influence the employability of higher education graduates. The construction of this operational employability model was built on previous research and a review of existing analytical frameworks that reveal its complexity and multidimensionality and that provide indicators for measuring employability. The model was finally adapted to the Eurograduate survey and then tested on a sample of graduates from Croatian higher education institutions to measure their early career outcomes. Operational Employability Model Various models and frameworks have been developed to analyse employability, and discussions have emerged about the factors influencing the transition of graduates into the labour market (Nghia et al., 2022). These employability models and studies usually aim to underpin the institutional developments and practise of higher education institutions, curricular or extra-curricular activities to develop student’s employability skills (Jackson et al., 2024), or they tend to support national or supranational employment and education policies looking at how higher education institutions effectively prepare students for the labour market (Bennett, 2019). Furthermore, these models often emphasise the factors that influence employability but place less emphasis on how employability can be measured due to the vagueness of the term. Finally, there are concerns that researchers work in their silos and that there is a lack of terminological consistency, so different terms are used for the same concepts (Donald et al., 2024b). 116 Business Systems Research | Vol. 15 No. 1 |2024 Based on the given theoretical framework and building on the existing models and analytical frameworks on employability, the operational employability model presented in this paper (Figure 1) includes cultural, social and human capital as predictors of employability, which is measured by three indicators of employability of employed individuals: vertical match of qualification to occupation, probability of finding a job within a short time after graduation, and income level. This operational model of employability is grounded in a robust theoretical foundation and aims to enhance understanding of the predictors of employability, as measured by a defined set of indicators. It originated from a pilot survey conducted among graduates in eight European countries in 2018, which was repeated in seventeen European countries in 2022. The use of a standardised questionnaire and comparable data sets ensures consistency across countries and over time. This model specifically targets initial employability and early career outcomes, analysing the transition from higher education to the labour market and distinguishing it from other employability models. Figure 1 Operational Employability Model Source: Author’s work based on Tecilazić (2023) 117 Business Systems Research | Vol. 15 No. 1 |2024 Methodology The operational employability model was empirically tested, and the analysis was conducted on a sample of Bachelor-level and Master-level graduates from university and non-university types of higher education institutions in Croatia who graduated in the academic year 2016/2017 and participated in the Eurograduate pilot survey from October 2018 to February 2019. Data were centrally collected and anonymised by the Deutsche Zentrum für Hochschul und Wissenschaftsforschung, which made the data available in accordance with the GDPR. The dataset was weighted based on population data and contained the sample of the total number of 4115 graduates grouped according to sex (59,3% female; 40,7% male), institution type (69,4% university; 30,6% non-university), qualification level (53,1% Bachelor; 46,9% Master); education fields (5,8% Education; 9,1% Arts and Humanities; 7,0% Social Sciences, Journalism and Information; 29,1% Business, Administration and Law; 5,0% Natural Sciences, Mathematics and Statistics; 5,7% Information and Communication Technologies; 16,6% Engineering, Manufacturing and Construction; 4,4% Agriculture, Forestry, Fisheries and Veterinary; 10,2% Health and Welfare; 7,1% Services). In order to test the research propositions and establish predictors of employability, the operational employability model was applied. Factor analysis was applied to reduce the number of measured variables indicative of the same constructs to create factor scores, which were used in multiple regression analysis as predictors. Logistic regression was applied to test predictors of vertical matching of qualification with occupation. The Cox regression was used to identify factors influencing the achievement of the first employment in a shorter time after graduation. Linear regression analysis was employed to establish factors that determine monthly income. The most significant and relevant results are presented and discussed in the following part of this paper. Results Factor analysis To develop an operational model of employability, three-factor analyses were first conducted to reduce the number of measured variables indicating the same constructs and to form factor scores, which were later used as predictors in a multiple regression analysis. The first-factor analysis included variables indicative of individual attributes and family socio-cultural background (Table 1). It resulted in three factors, two of which were included in the operational model of employability: sociocultural background and educational outcomes (knowledge, skills, and attitudes). The second-factor analysis referred to the learning and teaching modes predominantly used in the study programme and resulted in two factors, one indicating activating learning and teaching practises and the other passive learning and teaching modes (Table 2). The third-factor analysis included high-impact practices experienced by the graduates during their study programme (Table 3). 124 Business Systems Research | Vol. 15 No. 1 |2024 graduates without such experience. Similarly, graduates in the same group who have completed an internship during their studies will have salaries on average EUR 136 higher (B=136.034; S.E.=56.617) than those who have not completed an internship. These practises can, in turn, be attributed to the increased social capital that a person can build up during their studies by making connections with potential employers through various learning activities. Graduates who have completed a study period abroad are also more likely to find their first job with a lower income than their counterparts who stayed at their home higher education institution. This, in turn, can be attributed to a lack of social capital among those who did not build up their social networks sufficiently during their studies. Conclusion This paper provides new insights into the transition from higher education to the labour market. It makes a scientific contribution to the theoretical discussion and development of the construct of employability. Analysing the results of the original empirical research provides new insights into the predictors of employability. The aim was to test an operational model of employability developed based on human, cultural, and social capital theories and constructivist educational theory, which were adapted to the Eurograduate survey. Three research propositions were formulated to examine the impact of cultural, social and human capital, including the role of the learning and teaching environment, on the employability of graduates at an early stage of their career. Employability is measured here by the probability of finding a first job after graduation in an occupation corresponding to the level of qualification, in a position with a higher monthly income and in a shorter time after graduation. The model was tested in one country (Croatia) and proved to be applicable for analyses in other countries that participated in the survey in order to compare the results and measure the employability of people gaining qualifications and looking for work in different countries. The results largely support the second research proposition (RP2), which is that human, cultural, and social capital and the activating learning environment during higher education have a positive influence on higher monthly incomes. The third research proposition (RP3) was examined to test the impact of the employability predictors identified by the model on the probability of finding employment in a shorter time after graduation. The only significant result supporting the research propositions was found for the influence of social capital built up through internships during the studies. Graduates with a Master’s degree who have completed an internship during their studies are more likely to find a job in a shorter time after graduation than those who have not completed an internship. To better understand these results, it must be taken into account that more than 50 % of graduates with a bachelor’s degree continue their studies at the Master's level and were therefore not included in the analysis. However, these results call into question the indicator of finding a job shortly after graduation, as graduates may decide to postpone their employment for various reasons and possibly look for better opportunities instead of accepting the first job. This is obviously only possible for those who come from privileged families who can support them in their job search and career choice. Therefore, a more in-depth analysis would be necessary to understand better the reasons for postponing employment. Regarding the assumed positive effects of activating learning and teaching modes predominantly used by higher education institutions and specific high-impact practices that contribute to human capital formation and thus employability, the analyses provided limited support for the three research propositions, confirming only 125 Business Systems Research | Vol. 15 No. 1 |2024 volunteering and internships as practices with a significant impact on employability. However, further research is needed to investigate the different practices of higher education institutions that can lead to better employment outcomes. However, the model has some limitations. Despite the intention to capture the complexity of the employability construct in this study, the definition of employability has been adapted to the study of early career outcomes and the available data from the Eurograduate survey. The operational model of employability, therefore, does not include all elements that are theoretically considered important to the wider discussion of employability. External factors such as the local economy and economic development, which determine the demand for labour, as well as the skills profile of current job seekers in the labour market, which make graduate employment a more or less competitive process, and the family and personal circumstances of job seekers such as place of residence, transport infrastructure, availability of childcare, etc., undoubtedly have an impact on employability outcomes but have not been included in the model as they are not captured by the Eurograduate research instruments used and represent the limitations of this research. 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The Review of Higher Education, 28(4), 571-596. https://doi.org/10.1353/rhe.2005.0053 130 Business Systems Research | Vol. 15 No. 1 |2024 About the author Ana Tecilazić is a researcher with extensive expertise in higher education policy development. She holds an MA in Philosophy, Italian Language and Literature from the University of Zagreb, Croatia, an MA in European Studies from the University of Sussex, United Kingdom and a PhD in Social Sciences from the University of Zagreb, Croatia. She worked as the Head of Sector for Development of Higher Education at the Ministry of Science and Education in Croatia (2012–2021). She conducted several national and international projects on higher education policy developments. In 2021, she moved to Algebra University in Zagreb and was appointed Vice-Rector for Quality in 2023. Her research topics mainly include employability, skills development, education, and social factors that influence academic and labour market outcomes. The author can be contacted at [email protected].