ABSTRACT Degree courses are increasingly being designed to develop students' competences as well as their subject-specific knowledge. What competences do students perceive as being developed, and to what extent? Do work placements and academic studies have different patterns of competence development, and how well do these patterns match employers' priorities in selecting graduates? The study reported in this article addresses these issues, using data from a total of 269 second and final year students on retail and financial management degrees at five English universities, and 45 representatives of employers in the retail and financial sectors. Results indicate quite positive perceptions of development of a range of competences in academic work and even more positive perceptions of placement work. However, of the competences developed, most were not necessarily those that employers value most in selecting graduates, and this was true of placement work as well as academic work. It is suggested that current teaching methods and goals offer much scope for the development of a range of competences, but that attention could usefully focus on the further development of students' teamworking skills and on clearer distinctions between second and final year academic work in terms of competence development.