What Happens When You Put a Student Inside an SME?
In 2006, researchers studied 15 SMEs that hosted student placements through the Shell Step scheme. This summary explains what changed for those businesses, and what it means for any SME considering a placement today.
TL;DR: A 2006 academic study of 15 SMEs hosting Shell Step student placements found that the most common effect companies reported was a greater willingness to access external expertise, followed by a better understanding of how to recruit graduates. Most of these businesses had few formally qualified staff, but they applied with a specific project in mind.
What Was This Research Actually Studying?
Researchers interviewed 15 small and medium-sized businesses hosting an 8-week undergraduate placement through the Shell Step scheme, both at the start and four months after the placement ended. The aim was to measure “absorptive capacity,” a company’s ability to take in and use new knowledge and skills from outside the business.
Key takeaway: This wasn’t a satisfaction survey. It was an attempt to measure a genuine, if hard to quantify, business capability before and after hosting a student.
Did These SMEs Already Employ Graduates?
Few of their staff held formal qualifications: across the 15 firms, 92 of 624.5 staff (14.7%) had relevant qualifications, concentrated in seven of the companies. Employing people with higher degrees was not a priority for most of them. Yet the firms were innovative, with high levels of mostly informal R&D, and applied for a placement specifically to access skills they didn’t have in-house.
Key takeaway: A business doesn’t need an existing graduate workforce to meaningfully benefit from bringing in student talent on a placement basis.
What Changed as a Result of Hosting a Placement?
The most commonly reported effect was a greater willingness to access external expertise, cited by 10 companies. Nine reported a better understanding of how to recruit graduates and eight improved technical understanding or know-how. The follow-up came only four months after the placements, so the authors noted it was too early to measure economic impact, and few companies would give a definite yes to changes so far.
Key takeaway: The single biggest shift wasn’t a specific skill transferred, it was a change in the company’s openness to bringing in outside knowledge at all.
Why Did These Businesses Approach the Scheme in the First Place?
The clearest motivation across the companies studied was wanting access to the skills and expertise of the undergraduate specifically, rather than a general desire to “take part in a scheme” or access funding. Most considered the commercial risk of the placement to be low, even though they rated the risk of achieving the project’s specific objectives as moderate to high.
Key takeaway: These businesses understood exactly what gap they wanted filled before applying, which is a useful discipline for any SME considering a similar placement today.
FAQs
Q: Is this research still relevant almost 20 years later? The specific figures are historical (this study is from 2006, examining placements run through SEEDA funding in South East England), but the underlying finding, that student placements can meaningfully shift an SME’s openness to external knowledge, is a theme that has recurred in Step’s more recent research too.
Q: Does a business need a formal R&D department to benefit from a placement? No. The paper found high levels of R&D and entrepreneurial activity in these firms, but much of it was informal, with few set mechanisms for bringing in outside knowledge. A placement gave them a practical route for that.
Q: What made these businesses apply for a placement? The main reason companies approached the scheme was that they already had a specific project in mind, which the authors saw as a sign they understood what they needed.
Article produced by Step Recruitment Limited | www.step.org.uk
