Article by Katie Allen via The Guardian. Read the full version here

When Jade Hearsum graduated from the University of Sheffield she would have moved anywhere for a job. She considered London, but shuddered at the expense. She thought about Norwich, where she grew up.

“As with all graduates, you want a job anywhere,” says the 22-year-old.

The English literature graduate had also loved student life in the South Yorkshire city and, if she could find a graduate level job there, Hearsum relished the prospect of staying close to friends and to the rolling hills of the Peak District. So she signed up with a council scheme that matches graduates with jobs, part of the city’s attempt to transform itself into a high-skill, high productivity local economy.

That scheme is now being scrutinised by other cities as politicians of all parties recognise that solving the so-called “productivity puzzle” is vital to sustaining economic growth.

While official figures on Friday are again expected to show unemployment continues to fall and employment is around record highs, progress remains elusive on actually getting more value for the economy out of all the hours we work.

Increasing output per worker, which had helped drive rising living standards in the entire postwar period, came to an end with the great recession – in the past seven years productivity growth has all but vanished.

Similarly, for all the good news in those headline employment figures, graduates continue to bemoan the lack of graduate-level opportunities, with many turning to more insecure work on leaving university.

Sheffield council’s groundbreaking two-year-old jobs scheme has kept graduates in the city, ensuring more than 100 have ended up in high-skilled jobs with smaller employers.

Hearsum herself got a fundraising job with a homeless day centre at the city’s cathedral. It is a small charity and she was set tough targets from the start. But she is glad she did not become part of the brain drain of graduates moving south to big employers in London.

“I am working for a local charity and I can see the impact it has,” said Hearsum, sitting in the cramped offices of the Cathedral Archer Project.

“I go to the project all the time. People who use it, I know on a first-name basis.”

The homeless centre was born out of Sheffield’s industrial decline in the 1980s when growing numbers of people who had been left destitute turned to the cathedral for shelter and food. Today, it offers training, drug treatment and other services.

Tracy Viner, who runs the charity, said it was a contact at the council who first suggested she hire a graduate. Like many people running small charities and businesses, she had been put off by the thought of spending precious time on recruiting.

Employers like Viner are being told by politicians in Westminster to invest in skills and become more efficient. But for the cash-strapped charity or manufacturer depleted by the downturn, staying afloat often takes precedence over taking risks.

That is where Sheffield council hopes to step in by doing the legwork for prospective graduate employers. It wants to encourage more small and medium-sized enterprises (SMEs) to hire graduates by offering to sift through CVs, interview a longlist of candidates and then send through a shortlist for the company to meet. The employer provides the successful graduate with a paid internship of around six months – the hope is a permanent job will follow.

After a pilot launched with 50 internships in 2013, more than 40 went on to permanent jobs. “RISE Sheffield” became a fully-fledged scheme last year and so far, 130 graduates have won placements.

Diana Buckley, economic policy officer at the council, emphasised this is not a graduate employment programme.

“It’s about helping SMEs get the talent they need to grow,” she said.

“We asked: ‘Are we connecting the great resource of graduates in the city, people who want to stay here, and all the SMEs?’ And the answer was ‘no’.”

By emulating large corporate recruitment schemes but working on behalf of small local employers, Sheffield hopes to get ahead in an increasingly fierce skills race.

“What is driving competitiveness for cities now is people. Before it was things like coal and transport,” said Buckley.

Early indications suggest boosting graduate employment is paying off for Sheffield. For every £1 invested in RISE there was a return on investment of £5.71, according to an evaluation of the pilot.

Gradcore, the social enterprise that runs the scheme, is talking to other cities around the UK about launching similar programmes for them. Its chief executive Martin Edmondson fears, however, that many Westminster politicians are not so interested in graduates and whether they get suitable jobs.

“At the moment all the noise is about apprenticeships and not about the value of graduates. There’s a reverse snobbishness about graduates and about apprentices being the salt of the earth. It’s not one or the other but it’s starting to feel a bit like it is from national government,” said Edmondson.

“If government wants to improve productivity, there’s a proven link between productivity and graduates being in graduate work.”

At the Cathedral Archer Project, Viner feels her experience reflects Sheffield’s push for higher productivity. Having been reluctant to take on anyone, she ended up hiring two graduates through the council scheme.

“It made me put my head above the parapet and think about it,” said Viner. Her new graduates are raising the charity’s profile and on track to more than pay for themselves by pulling in new funds.

Yorkshire as a region is faring well in the battle for graduates. While most areas suffer from the brain drain that is an effect of Britain’s persistently London-centric economy, Yorkshire stands apart as the only region other than the capital to be a net importer of graduates.

Charlie Ball, who analyses data on where graduates end up for the Higher Education Careers Services Unit (Hecsu), notes the Yorkshire exception but describes a disappointing general trend for those who want to see regional rebalancing in the UK.

“Graduates are now a little less likely to stay close to the university where they studied and a little more likely to go to London,” said Ball.

The thinktank Centre for Cities has also highlighted the gravitational pull of London. On average between 2009 and 2012, 35% of all jobs in London were graduate jobs, compared with 26% for the large cities, it noted in a report last year.

The thinktanks’s senior economist Paul Swinney said cities should be asking themselves how they could provide the economic opportunity that would retain their graduates.

He expects competition for graduates to rise as the UK economy focuses increasingly on “ideas rather than goods”.

Overlooking Sheffield’s botanical gardens is a business with exactly that model. Software developer Lightworks has hired three graduates through the RISE scheme.

“The only thing we have here are the people. We don’t make anything. We make software that you download off the internet. So our people are our most important asset,” said managing director David Forrester.

“Our thing is to try and attract them to Sheffield, retain them. If you can get them here they love it.”

Find out more about City Graduate Schemes here.