Like many people, I often use a one-finger-per fret approach for 'position playing'. I have large hands, but in the lower (headstock end) positions it is too much of a stretch to do this without moving my hand around, so that's what I do. Your student with smaller hands will have to start doing this further up the neck.
I would also say thumb-behind-neck, not thumb-over-neck, to avoid 'flying fingers'.
Scott Devine covers both these points somewhere in his massive range of video clips1