Real hope for young people

More job opportunities and better skills are needed to ensure that young people benefit from the gathering upturn in the economy.

Young people have suffered a disproportionate share of job losses and reduced openings for work in recent years. With around 14% of people aged 16–24 not in work, training or full-time education, young people are nearly three times more likely to be unemployed than the rest of the population.

For low-skilled young people, and especially those who have left school without qualifications, failure to find a first job or keep it for long can have negative long-term consequences on confidence and career prospects – a phenomenon that some experts refer to as “scarring”.

Skills mismatches are adding to the problems as many well-educated young people come to accept jobs for which they are over-qualified. According to research carried out by the Local Government Association, around 40% of 16–24-year-olds are failing to make the most of their abilities and qualifications in their current employment. This can be demoralising. It also risks forfeiting the stronger productivity growth that would have been achieved had these young people been employed in jobs that reflect their educational attainment.

Investing in the future

It’s therefore vital that businesses invest in young workers and look beyond their lack of experience. Indeed, their lack of experience is likely to be offset by the value of their well-developed skills in technology, networking and collaboration.

Apprenticeships are a vital element of this drive for job creation and training. There are now around 850,000 people participating in such schemes. A survey of employers carried out by Skills Training UK found that nearly 60% who have set up apprentice schemes report that they are more cost-effective than hiring skilled staff and lead to lower overall training costs. Qualification can boost lifetime earnings by up to £150,000 and given the shortages in many of the areas they cover, pay can often exceed graduates.

While engineering, manufacturing and construction still provide the bulk of apprenticeships, the schemes are now reaching into mored iverse fields such as HR, finance and accountancy. Businesses now also have more freedom in devising their own qualifications and standards for apprenticeships, which gives them more opportunity to tailor the programmes to their specific needs. Examples of this new generation of apprenticeships include a two-year programme set up by PwC to train school leavers towards accountancy and tax qualifications. The firm believes that one of the key benefits is in enabling it to broaden the diversity of its talent pool.

Good training pays

But the quality of the schemes varies, with the gold standard higher apprenticeships making up less than 10% of the total. The number of young people taking up lower level intermediate apprenticeships is falling and drop-out rates are rising, highlighting concerns over the value of some of the programmes. The biggest rise in uptake is coming from people aged over 25, more than 90% of whom already work for the companies involved. This suggests that many apprenticeships are a rebadging of training schemes that would have existed anyway, rather than an important part of the drive to boost employment opportunities for young people. The more a business invests in the quality of the programme, the more motivated trainees will be and the more value employers will realise in meeting their skills’ needs. It would also seem sensible to ensure that funding for apprenticeships is targeted at helping to bring young people into the workforce, rather than subsidising training for existing employees.

Moreover, apprenticeships are only part of the answer. Jobs for Youth, a study carried out by Randstad, highlighted the importance of job search assistance programmes in preparing young people to enter work. This includes guidance on applications and interviews and advising them on the skills and qualifications they need to pursue their chosen career. Yet a survey carried out by Careers England reveals that eight out of ten schools have cut funding for careers advice over the past year.

Randstad’s research also highlights the importance of a broader benefits safety net, which would include help with rents and other costs while young people are training or looking for work away from their hometown.

Supporting the young people at risk of never entering formal employment is also likely to require early identification and intervention, either during their school years or through outreach thereafter.