Companies have a responsibility to find new ways of helping reduce youth unemployment
At a number of business and industry gatherings in Scotland in recent months, employers have been urged to increase their efforts to employ young people. The reason, looming for more than a year, was plain to everyone last week when the number in that group who are unemployed neared the one million mark.
The rise had been widely predicted. Unemployment had risen by 80,000 to reach 2.51m in the three months to July, 77,000 of which were 18-to-24-year-olds, lifting the youth joblessness total to 973,000. But over the summer their ranks were swollen by the number of graduates and school-leavers failing to find work – putting their number at its highest since 1994, in the wake of the recession of the early 1990s.
In response, the business charity Business in the Community (BITC) has called for a change in how British companies attract and employ young people by offering more non-graduate Cooperation and Development. That compares with 18.4 per cent in the US and an OECD average of 16.7 per cent. In Germany, the rate was 9.7 per cent. It stood at 32.9 per cent in Greece and 41.6 per cent in Spain, the highest in the OECD.
BITC’s Stephen Howard said: “Businesses must dramatically transform their talent and skills strategies to ensure they are attracting skilled young people into their workforces by prioritising young people; being flexible and innovative in their recruitment and employment methods; offering inspiring work experience placements; opening up recruitment to nongraduates and creating work places and roles that meet the needs of young recruits. We challenge our members, and all businesses to ensure the future prosperity of our talent pool and the UK by creating much needed jobs and apprenticeship places for young people.”
Steve Holiday, chief executive of the National Grid added his voice to the plea: “With youth unemployment rising to a million, and our talent pool drying up, responsible businesses have the capacity, if not a duty, to open up the avenues and create new opportunities to attract young talent. An important first step would be to make a radical change to how they approach the first introduction to the world of work by offering quality work experience that is both relevant and inspiring.”
While the low number of young people going into work directly from education partly reflects the ‘pull’ of further and higher education, it also reflects the ‘push’ effect of the lack of jobs for young people. The recession has also left around recruitment paths and jobs specifically designed for young people such as apprenticeships: “Young people represent a massive pool of untapped potential for UK businesses and their continued exclusion from the world of work has serious consequences to both business and society – with each picking up the bill,” said BITC’s chief executive, Stephen Howard.
A disproportionate number of new vacancies are currently being offered to young people; of the 453,000 jobs available during the period from June to August this year, only 7,950 were apprenticeship positions, not all of which are offered to young people. According to the UK Commission for Employment and Skills (UKCES), just one in five UK employers recruits 16-18 year olds directly from school.
Paul Brown, director of communications at the youth charity The Prince’s Trust, said: “Youth unemployment is like a dripping tap, costing tens of millions of pounds a week through benefits and lost productivity. And, just like a dripping tap, if we don’t do something to fix it, it’s likely to get much worse.” Young people not in employment, education or training cost the economy £11bn a year with additional costs incurred because they are more likely to become long-term unemployed. They also earn less over their lifetime, suffer harmful effects on their individual happiness and health and are more likely to have a criminal record than young people in employment.
In 2010, unemployment among 15-24 yearolds stood at 19.1 per cent in the UK, up from 14.4 per cent in 2007, before the recession, according to the Organization for Economic a tenth of the total employed workforce underemployed; wanting to work more hours than are currently available in their job. According to UKCES, the proportion of employees receiving work-related training is on the decline, and while young people still receive more training than other age groups, the number receiving training is declining faster. Young people are also twice as likely to be employed on temporary contracts.
UKCES believes that employers have a responsibility to open up work and training opportunities for young people, creating clear work-based training pathways and progression opportunities. The commission said this should open more doors, improve job quality and encourage young people to take a work-based route to qualification.
It added that there needs to be continued support for internships and work experience programmes; improved awareness of government support, especially in the private sector; easier access for employers to organisations supporting the workforce; improved awareness of support among small and medium-sized enterprises; targeted, rather than blanket campaigns; an expansion in the quality and quantity of apprenticeships; an expansion of preemployment training; and a benefits system that responds to changes in the labour market.
The latest unemployment figures will also increase the pressure on the UK Government to support the private sector. Kevin Green, chief executive of the Recruitment & Employment Confederation, said: “Employers are being very cautious about hiring at the moment. This has been exacerbated by weak consumer confidence which leads to people staying in their current role rather than changing jobs.
“The private sector is still producing new jobs but not in the quantity needed to offset the job losses in the public sector. These factors combined have resulted in the slowest increases in both permanent and temporary billings since August 2009. It’s vital that we look at ways to boost these numbers, particularly for young people who continue to be disproportionately affected by unemployment.
“To combat this, the REC is urging the Chancellor to introduce a National Insurance holiday for at least a year to encourage SMEs to take on young people. This is becoming even more critical because employers can no longer force older workers to retire at 65. While it is important that mature workers can continue to contribute to the workforce, it means even fewer roles will be available to younger candidates so efforts must be made to incentivise businesses to create jobs.”
According to Fred Turok, founder of the youth employment charity Transforming a Generation, success will rely on a partnership between the public and private sectors: “Government must show leadership and provide the funding, but employers must match this commitment. They must understand and acknowledge the role they have to play in helping to heal this deep societal wound – the eradication of hope and opportunities of our youth.
“After all, employers accept their responsibilities when it comes to the environment, equality and employee rights, so why not their role and responsibilities to future generations? They can make an immediate and very practical impact which would have huge benefits. This could be as simple as looking at the reality of youth unemployment, mentoring young people and helping them understand the reality of the world of work, or offering work experience and apprenticeships.”