Skills for sustainable employment Strategies to tackle youth unemployment Dr Melanie Simms University of Warwick Dr Ben Hopkins University of Aberystwyth Dr Sophie Gamwell University of Warwick
Research paper 18 June 2013
About the authors Melanie Simms is an associate professor in the Industrial Relations Research Unit at the University of Warwick. She researches the future of trade unionism as well as youth labour market transitions. She is currently researching employer experiences of recruiting and managing young workers. Benjamin Hopkins is a lecturer in Human Resource Management in the School of Management and Business at Aberystwyth University. His recent research investigates precarious and vulnerable workers and encompasses two main themes â€“ migrant and temporary workers, and younger workers. Sophie Gamwell is a research fellow in the Industrial Relations Research Unit at the University of Warwick. Her research interests cover flexible work, equality and diversity, the future of trade unionism, and comparative employment relations.
Youth labour market transitions in international context
UK policy with regard to helping young workers during the crisis
Trade union initiatives to increase opportunities for young people
Employersâ€™ experiences hiring and training young people
The experiences of young people
Opportunities to include youth employment provisions in procurement agreements
The scope to improve entrepreneurial activity among young people
Other research papers in the series
Youth unemployment is a long-standing, major problem in the UK. TUC research has revealed that since 2000 the number of young people who have been unemployed for more than a year has increased by a massive 874 per cent. Youth unemployment has a detrimental impact on society and the young person who can’t find work. It has been estimated that the net present value of the cost to the Treasury, even looking only a decade ahead, is approximately £28bn. The recent research report by ACEVO recognised the far-reaching economic impact of youth unemployment. A sustained period of unemployment can result in an average wage penalty of between 13 and 21 per cent by the time that person reaches 42. Youth unemployment is such a long-standing problem that the wider economy will already be suffering from the scarring effects of earlier recessions. Alongside the negative economic impact, youth unemployment has other serious implications for those young people who can’t find work, including, depression, low self-esteem and self-worth. Tackling youth unemployment is an important issue for trade unions. Many of our members will have relatives who are unable to get a job. Trade unions have always been at the forefront of tackling social injustice. Making sure that young people are not exploited and helping them to secure quality employment is central to our core principles. Improving skills and qualifications are the best way to secure that that employment. The recent BIS Trade Union Membership statistics report shows that over the last 17 years the proportion of trade union members aged 34 or below has dropped significantly. What better way for unions to re-engage with young people than by negotiating with employers to provide high quality learning and hence employment opportunities? For these reasons unionlearn commissioned the Industrial Relations Research Unit at the University of Warwick to explore some of the obstacles that prevent young people gaining the skills they need to make the transition to high quality employment.
I have picked out three key proposals from the report findings: 1. We need real “social partnership”. By this I mean forums for trade unions, employers and the government to discuss and agree on skills policies for young people. This is the norm across Europe and mature partnership working like this can bring about real benefits for young people. We should learn from our European neighbours and take a look at some of their excellent Apprenticeship frameworks. 2. Young people need high quality work experience to help them find work. The new Traineeships programme could be a useful tool to help young people receive high quality work experience that meets their aims and needs. Unions will play an important role in ensuring work placements don’t lead to the exploitation of young people and do deliver real training in a high quality work experience. 3. When public money is used to procure services we can make better use of social clauses to increase high quality skills opportunities for young people. The government has piloted this idea with great success in contracts managed by the Department for Work and Pensions, creating an additional 20,000 Apprenticeships. We will support unions, helping them to negotiate with both private and public sector employers to roll out this concept across the UK. I hope you enjoy reading the report. Trade unions, employers and government can develop these proposals to provide the long-term help that young people need as a matter of urgency.
Tom Wilson Director, unionlearn
Introduction There is a crisis in youth employment in the UK and beyond. For at least a decade, transitions into good work have been getting harder, more extended and more precarious for young people. Since the crisis of 2008 it has become clear that the worst effects of labour market changes have been felt by young people. In particular, youth unemployment in the UK and beyond has jumped dramatically and remains stubbornly high. The reasons are complex and extended periods of unemployment at the start of someone’s working life can have a “scarring” effect which can lead to a range of worse outcomes across that person’s life. Youth unemployment presents us with a problem as a society that is likely to affect us for decades to come. This report explores the challenges facing young people in today’s labour market. It has a particular focus on young unemployed people and the policies and initiatives to help them find work. A further concern relates not only to the quantity of jobs available to young people, but also the quality. This is important because poor-quality jobs can often act as “poverty traps” pushing young people into cycles of employment and unemployment rather than acting as “stepping stones” into decent work.
Youth labour market transitions in international context We cannot transfer simple solutions from other countries, but many countries have responded to the crisis by strengthening mechanisms to help young workers, with a particular focus on apprenticeships and initial vocational education and training. In countries such as Germany, Denmark and the Netherlands there are examples of effective systems that have protected young workers from the crisis and helped keep youth unemployment low. Those countries also have strong regulations about the quality of work and training provided to young people.
Three main points need to be considered in the UK context: ❚❚ These systems all have strong mechanisms to
balance the interests of employers, unions and the state. This collective regulation helps ensure that as the economy changes there is strategic planning for workforce development both in terms of numbers and changing skills requirements. They also ensure that there is agreement on the quality of work and training provided. ❚❚ All of these systems place some obligation on employers to part-fund skills training, and there are often mechanisms to off-set part of these contributions through tax reliefs and subsidies. ❚❚ Vocational routes into employment are generally regarded as prestigious in these systems because the opportunities are jointly regulated by the social partners.
UK policy with regard to helping young workers during the crisis In the UK, it is clear is that there is comparatively little influence of social partners (employers and unions) as compared to other EU member states and this can create complexity and confusion for employers, unions and young people. We support the recommendations of the TUC Generation Lost report (Bivand 2012) that aggregate employment opportunities for young people can be improved by: ❚❚ boosting overall economic activity to improve
job opportunities for all workers, including young people ❚❚ a job guarantee to provide employment to all longterm unemployed young people ❚❚ prioritising young people without work rather than only those claiming Jobseekers’ Allowance through effective active labour market policies that provide good quality training and work experience ❚❚ providing wage subsidies to incentivise employers to recruit young people.
❚❚ expanding education and apprenticeship
In addition: ❚❚ There is an important role for involving social
partners (employers and unions) in the development and implementation of policies in this area. Of particular concern is the quality and quantity of apprenticeships available and trade unions and other stakeholders are well placed to input into local, sectoral and national design and implementation of apprenticeships. There is also scope to provide incentives to training providers (schools and colleges) to work with employers to provide learners with quality work experience and job placements while they are in education and training. All stakeholders should continue to monitor and evaluate the impact of changes to funding for both further and higher education on participation rates. The government should be prepared to review these changes and act swiftly if there is any evidence of a negative impact on participation. Bursaries that replaced the Education Maintenance Allowance (EMA) are complex to deliver, difficult for learners to understand. The EMA should be restored. This is particularly important to cover transport costs of continuing education and training. The 16-hour rule limiting job seekers to part-time study is extremely problematic and can act as a disincentive to job seekers to improve their skills and further their education. We recommend removing this rule. Proposals for traineeships clearly provide opportunity for young people to develop skills and experience which is welcomed. However, attention needs to be paid to the mechanisms for including social partners in designing and monitoring their quantity and quality. Given the costs of continuing education and training, and the impending raising of the
participation age, we recommend that free school meal entitlements should be reformed so that students aged 16–18 and studying in further education colleges and sixth form colleges are able to benefit from this provision.
Trade union initiatives to increase opportunities for young people We looked for examples of innovation where unions have been successful in improving the quantity and quality of opportunities for young people and identified a good range of case studies that are detailed in the report. The cases highlight the role of unions in improving terms and conditions for young workers, ensuring progression from training into quality jobs, bargaining around issues of particular concern for young workers, and improving the number and quality of apprenticeships. There is clearly a role for unions and union learning representatives to engage with this agenda in workplaces where they are established. One particularly innovative example is of the trade union, Community, which has established a semi-independent training arm, called Communitas, to design and deliver apprenticeships in negotiation with employers. This is particularly innovative as it allows Communitas to draw down funding which can be used to help young people gain the skills they need in the local labour market. In short, we found considerable evidence that unions are doing innovative things in this area and examples that could be rolled out more widely. Specifically our recommendations are: ❚❚ Examples of innovative bargaining outcomes that
create good-quality training and job opportunities for young workers in the UK and beyond should be shared between unions. ❚❚ Unions and their representatives can have a valuable role in negotiating more and better quality apprenticeships, training opportunities, traineeships and work placements. They can also help ensure that any work placement schemes, apprenticeship programmes and other routes for
young people into employment offer good-quality, paid opportunities to develop skills. ❚❚ Mimicking the Communitas example, unions could seek to become training providers themselves. ❚❚ Unions in low-paid sectors should consider prioritising negotiations to agree that all workers should be paid at least the full adult rate of the national minimum wage. ❚❚ Local union networks (including but not limited to trades councils) are well placed to understand local labour markets and to work with colleges, employers and young people to explore opportunities for employment and to negotiate with employers to provide good-quality opportunities.
Trade union initiatives to increase opportunities for young people Employers are often forgotten in research about unemployment and this is a mistake. We asked 11 employers who are particularly active in the area of recruiting and managing young people about their experiences. What is striking is that even these employers experience considerable challenges in developing and delivering these opportunities. A frustration of many employers is the complexity of funding and evaluation of apprenticeships and similar schemes. The rationale behind this complexity is understandable given that it involves the distribution of considerable amounts of public money. But in practice, it means that even very large employers need to work with partners to understand the system and this can act as a barrier to participation. As a result, the picture is one of complexity and variation in provision of opportunities to young people. A further frustration of employers is how little they are consulted on changes to policy. There is an assumption that employers will simply respond and adapt as policy changes and develops. In practice, however, this can have the effect of forcing employers to disengage. A clear example of this is the raising of the participation age where the lack of systematic employer involvement may well mean that there are
fewer work-based opportunities for young people than might otherwise be the case. It is our view that without the engagement of social partners, the effectiveness of policy initiatives will be limited. A central message from employers is that many of them do want to engage in initiatives to help young people find work, but there are considerable barriers to achieving this: ❚❚ Employers should be engaged and consulted
in policy change. For example, the raising of participation age may well prove problematic as a result of the fact that relatively little effort has been invested in engaging employers. There is a risk that young people may be offered inappropriate training or education as a result of the lack of employer engagement. A further concern is the view of employers that policy in the broad area of training and apprenticeships is too complex. It is particularly difficult for many of them to understand funding and evaluation requirements. As a result many decide to work with partner organisations, but there is a lack of information regarding the experience and background of these organisations. There seems to be an important role for an agency to provide guidance to employers. Employers report that they often face other problems understanding how to support young people into their transitions into work. Particular areas raised with us include understanding wage rates and thinking about how to manage young people as they make their transitions into work. Employers sometimes screen potential apprentices by employing young people before offering an apprenticeship. Trade unions and employers should ensure that there is fair access to apprenticeships and other employment to effectively safeguard young people from exploitation. Because at least some employers only recruit to apprenticeship programmes from the existing staff pool, it is important that employers and unions work to ensure that there are appropriate entry
routes for young people. These can take a variety of forms and might include traineeship positions, work experience and other mechanisms for giving young people an opportunity to gain employment and skills prior to apprenticeship training. ❚❚ In light of evidence of the significant challenges facing large employers in supporting young people into work, it is clear that these barriers are almost certainly more significant for smaller employers. Support to develop apprenticeships, to find appropriate training providers and mechanisms to provide a quality assurance process for organisations involved in the delivery of such programmes would all help all employers and SMEs in particular.
any concerted effort at job-matching either as young people made choices about education and training, or when they found themselves unemployed.
The experiences of young people
❚❚ With more and more jobs only advertised online, it
We were keen to involve young people in our research. We interviewed two main groups: young people who have experienced at least six months of unemployment, and young people approaching decisions about what to do when they leave college. One persistent concern related to the lack of sources of advice and guidance. We therefore also extended our interviews to a group of professional careers guidance advisers who regularly work with young people in making choices about education, training and employment. Our interviews gave us a strong sense of how frustrating the process of seeking work is and how difficult it is to improve the jobs search process in the absence of feedback on applications. The young people we spoke to all expressed a clear understanding that education and qualifications were important to improving their chances of securing the work they were looking for and generally they were keen to stay in education and/or training as long as they could. But there was little sense that the decisions they were making were informed by an understanding of how jobs and the economy more widely have changed. In other words, there was little evidence of
When they find themselves unemployed, young people face frustrating experiences with seeking work. These include a lack of openings advertised in the local labour markets, a lack of feedback on applications, jobs being advertised that are not all they seem, and geographic limitations such as a lack of access to transport. We also had feedback from careers advisers and HR specialists that young people need more help to present themselves well in competency-based selection processes. Our policy recommendations are:
is essential that disadvantaged young people have public points of access to the internet. Attention needs to be paid to how employers are advertising and presenting jobs. Commissionbased jobs frequently involve targets that are extremely difficult to achieve. Bogus selfemployment is a concern for some young workers and it is not always clear when jobs are advertised through an agency. More work could be done to provide advice and mentoring for young people to identify their skills and competencies in order that they can then present themselves effectively in contemporary recruitment and selection processes. Careers advisers used to do link work between employers and young people, partly to find job opportunities and also to promote the interests of young people themselves. No one does this any more and there is a clear need for this kind of provision to improve job-matching. Provision of advice and guidance at school is now very patchy and is a serious problem for the future. More work needs to be done to ensure advice and guidance are provided to young people on a one-toone basis.
❚❚ A scheme to provide coaching and mentoring
to young unemployed people in addition to the work done through job centres would provide additional support. ❚❚ There are opportunities for employers and unions to develop structured work experience programmes and to help young people identify the skills they have developed during work experience.
Opportunities to include youth employment provisions in procurement agreements A review of evidence shows that EU regulation on procurement does not prohibit the use of social clauses and they are widely used in many other member states. There are good reasons to look at using social clauses in procurement processes to promote youth employment and training opportunities in the UK. Along with low wages, youth unemployment is one of the most serious issues facing the UK labour market and this is a strong argument for prioritising this in negotiations. ❚❚ There is scope for both public sector and private
sector employers to consider developing procurement policies that place responsibility on managing contractors to include social clauses on youth employment and training. ❚❚ Where they are recognised, trade unions should learn from the Living Wage campaigns to explore opportunities to influence procurement processes and campaign for the introduction and monitoring of social clauses providing youth employment and training opportunities. ❚❚ Trade unions and other interested actors should consider exploring the opportunities presented by the equality duty in the Equalities Act 2010 with regard to young people’s employment and training opportunities. ❚❚ Trade unions should support reform of procurement processes to promote employment and training similar to the Procurement Reform Bill that will shortly be enacted in Scotland.
The scope to improve entrepreneurial activity among young people This section reviewed the literature regarding entrepreneurship as an alternative to employment for young people. There is clearly a desire among many young people to run their own businesses. However, it has been shown that many of these businesses are replicative self-employment, rather than true innovative entrepreneurship. Although some of these businesses can be successful, there is a higher rate of failure among new firms set up by young people, and less chance that they will provide employment opportunities for others. Although there is evidence of some successful schemes to promote entrepreneurship across the EU, it is important that these schemes address the self-efficacy issue by ensuring that young people have the belief that they can create a successful business. It is also crucial that these schemes do not force young people with poorquality business ideas into entrepreneurship or selfemployment out of necessity, simply because there are limited other employment opportunities. It is clear that initiatives to promote self-employment and entrepreneurship are attractive to young people, but we caution against seeing this as a panacea to the problems of youth unemployment. Such initiatives should be supported where possible but should not be regarded as the primary mechanism for resolving youth unemployment. Specifically: ❚❚ There is scope for targeting initiatives to promote
entrepreneurship at young, unemployed people but attention needs to be paid to ensuring that this is not promoting bogus self-employment. ❚❚ Mentoring and guidance for young people in becoming entrepreneurs is particularly valuable. ❚❚ Schemes to promote entrepreneurship must focus on the issue of self-efficacy to build self-confidence and self-belief among young (potential) entrepreneurs.
â?šâ?š An effective way to build self-efficacy is to give
young (potential) entrepreneurs opportunities for quality work experience with existing entrepreneurial companies.
It is important to target support on businesses with the potential to grow and create employment opportunities. The evidence reviewed suggests that these are most likely to be businesses that serve regional, national and international markets rather than focusing only on local markets.
There is a crisis in youth employment in the UK and beyond. For at least a decade, transitions into good work have been getting harder for young people across a broad range of skills and qualifications levels. Transitions for young people into the labour market have become longer and more insecure (Keep 2012). At the same time, there are questions about the quality of jobs available to young people. It has always been the case that there are some young people who are at risk of failing to make secure pathways into work, and even before the crisis there was growing policy concern about the group labelled ‘NEET’, i.e. those not in employment, education or training. Since the crisis of 2008, it is clear that the worst effects of changes in the labour market have been felt by young people. Youth unemployment in the UK and beyond has jumped dramatically and is remaining stubbornly high (see Chart Two in the following chapter). What is also clear is that this is a phenomenon now affecting young people across the spectrum of skills and qualifications, although the most important factor in predicting whether or not a young person is likely to find themselves in the NEET category is their educational achievement, with those with fewest qualifications most likely to struggle. This is still the case, but since 2008, considerable numbers of more qualified young people are also finding it hard to access good jobs. It is relatively well-established that extended periods of unemployment at the start of someone’s working life have a “scarring” effect (Gregg and Tominey 2005, Bell and Blanchflower 2011) which can lead to a range of worse outcomes across that person’s life. In short, youth unemployment presents us with a problem as a society that is likely to affect us for decades to come. A further concern relates not only to the quantity of jobs available to young people, but also the quality. This is important because poor-quality jobs can often act as “poverty traps” (Shildrick et al 2012) trapping young people into cycles of employment and unemployment rather than acting as “stepping stones” into decent work.
This report explores the challenges facing young people in today’s labour market. It has a particular focus on young unemployed people who have not experienced higher education and the skills policies intended to help them find work. The report starts by looking at the UK in broader context. Youth unemployment is a challenge for many European Union member states and has jumped since the 2008 crisis. Youth unemployment rates in Spain and Greece are shockingly high and there is increasing talk of a “lost generation” in many countries. However, other EU member states such as Germany, the Netherlands and Denmark have had far lower rates of youth unemployment both before and since the crisis. In large part, this seems to be explained by more effective systems of Apprenticeships and initial vocational training. These dynamics are therefore presented and explored in the next section. The report then outlines changing UK government policy in this area with a particular focus on recent changes. The following three chapters look at the main actors: trade unions, employers and young people themselves. Where they are recognised, trade unions have an important role in improving the number and quality of opportunities available to young people. We have therefore identified examples of innovation where unions have negotiated with employers to improve opportunities and working conditions to help young workers. Employers are central to the dynamics of youth employment although they are often overlooked in research and policy making in this area. We know that most employers are not particularly engaged with initiatives to help young people into work and that only around one quarter of employers surveyed in the 2011 National Employer Skills Survey for England had recruited a worker aged 16–24 in the preceding two to three years (UKCES, 2012a). We therefore made contact with a group of employers who are engaged with these initiatives in an effort to understand better the challenges and barriers that face employers more widely.
Finally, we spoke to young people themselves. We particularly focused on young people who have extended experiences of unemployment (six months or more) as we know these are the most vulnerable. We also spoke to young people at college who are facing choices about their future education and employment in the next six months in order to get a view of how the current labour market challenges are affecting those choices. They told us how little guidance they felt they had when making choices about work and training. So we also spoke to careers advisers about changes in this area. Finally, the report considers two particular areas of policy initiative that might be used to boost the quantity and quality of jobs available to young people: the inclusion of ‘social clauses’ in procurement contracts, and promoting entrepreneurship among young people. The first relates to the idea that it is possible to include clauses requiring contractors to, for example, provide good-quality Apprenticeships as part of (public sector) procurement processes. This has long been an area of discussion around the European Union where such clauses are usually referred to as “social clauses”. They have attracted more attention in the UK since the success of a number of Living Wage campaigns. We therefore consider the opportunities and limitations for using similar
approaches to help tackle youth unemployment. Finally, we also consider initiatives to help young people to set up in self-employment as a way of avoiding unemployment and evaluate whether there is scope to roll out this kind of policy more widely. However, before we move on to present the main research findings, it is important to clarify who we are talking about when we talk about “young people” and “young workers”.
Who is young? Internationally agreed definitions of “youth” typically refer to those in the age group 15–24 years. This is the definition adopted by the International Labour Organisation (ILO 2010) and will be the primary focus of this report and the data presented within it. However, in some cases policies or specific initiatives may define “youth” differently. This is particularly relevant within the EU because young people are increasingly delaying their transitions into the labour market, often through the extension of participation in further and higher education. This trend is particularly notable in developed economies and is a strong feature of the experiences of young people across the EU. This report therefore makes clear where the targeted age range is other than 15–24.
Youth labour market transitions in international context It is not the objective of this report to suggest that we copy the initiatives of other countries in any simplistic way. It will never work and we should never fall into the trap of thinking it will. Nonetheless, when we look around the European Union it is clear that youth unemployment is an issue of serious concern in many countries. Some countries have had stubbornly high levels of youth unemployment that have long been a focus of policy attention. In France and Italy, for example, there is widespread public debate focused on the difficulties young people have found in finding secure employment that allows them sufficient income to establish life as independent adults. In many new member states, the challenges for young people in finding good-quality work helped explain the pre2008 trend of young people migrating to find work and opportunities overseas. In other countries, notably Germany, Denmark and the Netherlands, there are mechanisms within their employment systems that have the effect of protecting young people from the effects of external shocks such as the global financial crisis. Thus, it is important that we understand what those mechanisms are and what lessons we could take away when we look at the UK. The European Labour Force Survey (ELFS 2013) provides reliable comparative information about how the crisis has introduced new dynamics into these trends, and in all member states except two (Austria and Germany) youth unemployment has jumped since 2008 and remains stubbornly high. In some countries such as Greece and Spain, youth unemployment rates are now at strikingly high levels: 53% and 44% respectively in 2011, and preliminary data suggests further rises in 2012. Only Germany, the Netherlands, Austria and Norway have youth unemployment rates below 10%. The crisis has exacerbated concerns that emerged across the 2000s about evidence that young people are struggling to make secure labour market transitions. It is clear that some of the developments we have experienced in the UK have been seen much more widely. This chapter therefore serves two
purposes; first to compare developments in the UK with what has been happening in other EU member states, and second to illustrate the widespread nature of these changes and to begin to make the argument that the problems being experienced by young people are, in part, a consequence of fundamental changes in labour markets. To do that, we present information about what the main actors (governments, employers and trade unions) have been doing to help young workers since the financial and economic crisis of 2008. This shows the variety and extent of initiatives to help create good-quality employment opportunities and to help to ensure that young people are well placed to make secure labour market transitions where possible.
The extent of the problem facing young workers As shown in Chart One, the total unemployment rate across the EU27 is currently 10.5%. However, youth unemployment is 22.9%, a difference of 12.4 percentage points. In the United Kingdom the gap is slightly larger, with a youth unemployment rate of 21.1%, that is 13.1 percentage points higher than the overall unemployment rate of 8.0%. In Spain the gap is particularly pronounced, with 53.2% of young people unemployed as compared to 25% of the whole population. There are similar problems in Greece, with a youth unemployment rate of 44.4% and an overall unemployment rate of 17.7%. The smallest gap is in Germany, with 5.5% of the population unemployed, but 8.2% of young people unemployed. Youth unemployment has also risen faster than the general unemployment rate. Chart Two presents the unemployment rate for under-25s in 2007 (the last full year before the crisis of 2008) as compared to 2012. Across the EU 27, the rate of youth unemployment has increased from 15.7% in 2007 to 22.9% in 2012. In the United Kingdom, the rate has risen by 6.8 percentage points from 14.3% to 21.1%. There have been large increases in the youth unemployment rate in a number of countries, particularly those with weak economies. For example, in Spain the youth unemployment rate
Chart One: Unemployment rates for those of all working age and unemployment rates for under-25s. Source: Eurostat, European Labour Force Survey
Chart Two: Unemployment rates for under-25s in EU member states 2007 and 2012. Source: Eurostat, European Labour Force Survey.
has risen from 18.2% in 2007 to 53.2% in 2012. In Greece this figure has increased from 22.9% to 44.4% in the same period, while Ireland has also seen a rapid increase from 9.1% to 31.0%. Only in Austria and Germany has youth unemployment fallen, with Germany having the only sizeable decrease from 11.9% to 8.2%, although this is largely accounted for by a shrinking cohort of school leavers. It is not stretching the point, therefore, to say that young people are in crisis with regard to employment around the European Union. Responses to the crisis have varied, although there are some common themes. Our attention now turns to initiatives by government, employers’ associations and unions to helping young workers in order to locate recent UK policy developments in a broader comparative context.
Government policies to help young workers during the crisis Given the extent of the challenges facing young people, it is unsurprising that governments around the EU have launched a range of initiatives to help young people find work. Active labour market policies (ALMPs) have been popular responses and tend to address both supply side (training etc.), demand side (e.g. incentives for employers to recruit particular workers) and job matching (e.g. careers guidance). An example from the Netherlands illustrates this kind of approach. In 2009 came agreement on an Action Plan on Youth Unemployment which consists of a range of measures including: initiatives to keep young people in education with a particular emphasis on vocational training, funding for regional unemployment programmes, job matching services, initiatives to promote Apprenticeships, and funding to help particularly vulnerable young people. For the period 2009 to 2011, the Dutch government allocated €250m to deal with the immediate impact of the crisis. Although the funding for the programme was cancelled in 2012, it seems to have provided many positive opportunities for young people in the
immediate aftermath of the crisis. And it is notable that youth unemployment in the Netherlands is among the lowest in the EU. Many other governments have adopted less comprehensive programmes and there are three particularly common responses: ❚❚ promotion of Apprenticeships, typically with a
significant subsidy for employers ❚❚ development of education systems and curricula that ensure that young people leave education with work-appropriate skills ❚❚ financial incentives such as subsidies and reduction of employer taxes to provide incentives to hire and train young people. When discussing youth employment, the vocational training and Apprenticeship system in Germany is often held up as an example of a strong and coordinated mechanism that supports young people’s transitions into the labour market. Importantly, in Germany, the development and funding of the system is strongly supported by social partners (trade unions and employers associations) and is addressed through collective bargaining at sectoral, regional and national level. This “tripartite” approach (i.e. involving trade unions, employers’ associations and the state) means that the system is designed to balance the needs and interests of all relevant parties and it can adapt as, for example, demand for work and skills in particular sectors and areas changes. Immediately after the crisis, the German government facilitated the extension of Apprenticeship placements through the provision of a training bonus of up to €6,000 to employers offering an additional placement to a disadvantaged young person who has been seeking training for 12 months or more. Although there was concern over the initial fall in the number of Apprenticeship places available in 2008– 09, this period corresponded with a larger fall in the number of school leavers and so the impact was not as severe as feared.
The German system is not without problems, however. Two main concerns are expressed by social partners. The first is that there are still many young people who do not achieve the educational levels required to access Apprenticeships. These young people typically find low-skill work, often in retail and hospitality in what are termed “mini-jobs”. Minijobs are part-time, often insecure jobs paid €400 per month or less. Mini-job employees are exempt from paying tax and social security and employers pay significantly less than for other forms of work. Unsurprisingly, mini-jobs can become poverty traps for many young, low-skilled workers and there is growing concern about their use. One consequence of this is a growing call for a national minimum wage to protect people on these forms of contracts.
A particularly important response has been to lobby and negotiate for more and better Apprenticeship training. In Denmark, for example, the Confederation of Danish Industries has been campaigning to ensure that vocational routes into work are regarded with equal prestige and status to more academic routes. In Germany, the peak-level employers’ association, the Confederation of German Employers’ Associations, has expressed concern about a shortage of skilled labour and has committed significant resources to expanding Apprenticeship provision. Indeed, it is clear that provision of good-quality Apprenticeships is a policy area on which all social partners can agree as an important response to youth unemployment, even where there are some challenges ensuring that the system works appropriately.
A second major concern about the German vocational training system relates to what happens to young people when they complete their Apprenticeships. There is evidence that some employers do not have sufficient job opportunities for apprentices at the end of their training and opt to take another apprentice at lower rates of pay than taking on the trained workers. Although these young people are in a stronger position within the labour market than those with little work experience and few skills, this is a different approach to Apprenticeship provision than intended. Unions and works councils are working with individual employers to ensure that such transitions are planned for and managed, but there are inevitably challenges in the kind of extended period of economic difficulty that we have experienced around the EU in recent years.
The most prevalent concern of employers is the perception that education systems are not always equipping young people with appropriate work skills. This is evident at all levels from immediately post-compulsory education to those leaving higher education. Employers’ Associations in countries as varied as Bulgaria, Estonia, France, Poland, Germany and Sweden have all issued policy documents in recent years campaigning for reforms to education systems to provide more appropriate vocational skills. Similarly, employers in many countries have consistently raised concerns about how to make more vocational routes into work attractive to young people.
Employer responses to helping young people
Trade unions around the EU have also been responsive to this issue. This has taken three main forms:
Unlike in the UK, in most European Union countries, collective employers’ associations are the main bodies through which employers negotiate and lobby about work and employment. It is clear that employers’ associations around the EU have acknowledged the crisis of youth employment that has developed since 2008.
Trade union initiatives to help young workers
❚❚ campaigning to recruit more young workers ❚❚ promoting more extensive use of Apprenticeships
and training to integrate young workers and promoting reform of education systems ❚❚ campaigning to improve the transition from education to the labour market and to secure job opportunities for young workers.
Many unions have been active in this area and there are examples where unions have either participated in mechanisms of social partnership, or have successfully negotiated collective agreements on issues specifically affecting young workers. It is notable that in countries such as France that have had a long-term challenge of high levels of youth unemployment, there are examples of innovative bargaining in this area. There are a number of examples of company-level collective agreements in companies including the motor manufacturer PSA Peugeot Citroen, the publisher Bayard and the postal service La Poste, which have agreed specific measures to help young people in the recruitment process. These have sometimes taken the form of specific targets for recruiting workers under a certain age, or a commitment to replace retiring older workers with young workers. Union involvement in bipartite (union-employers) and tripartite (union-employers-government) negotiations have also been extremely important. The case given above of the Netherlands is a good example of how involved many unions have been in social partnership negotiations to develop support for young workers. In Austria, for example, tripartite negotiations have successfully agreed a re-employment scheme to target young workers who have been made redundant from smaller companies or agency work where it is less common that the employer will facilitate retraining and job searching. This scheme requires the employers who make young people redundant to make a financial contribution of â‚Ź1,000 to a social fund to facilitate retraining and job searching. Similar processes in other countries have also focused on encouraging young people made unemployed to return to education and training, typically with access to funds to facilitate this. In some countries, the age range targeted by these initiatives is extended considerably beyond 25. In Hungary, for example, it includes people up to the age of 35. In short, unions have been very active in this area both before and since the crisis. However, in countries
with weak social partnership arrangements unions will always be, to some degree, â€˜secondary actorsâ€™ and initiatives are much more likely to be driven by governments and employers. Where sectoral, regional and national institutions of bipartite and tripartite negotiation exist, unions are an integral part of the response to the challenges of youth unemployment. In these countries, we see more proactive approaches that are agreed by all the parties involved. This helps explain why countries such as the Netherlands, Austria and the Scandinavian countries have been able to respond more strategically with planning about the numbers and levels of Apprenticeships, provision for retraining when companies have had to make redundancies, etc. In many other countries, unions have to campaign and mobilise in order to influence policy and practice.
School to labour market transitions Many competitor EU member states have strong systems of initial vocational education and training (initial VET). Typically, this is provided by Apprenticeship programmes which involve periods of workplace training, combined with periods of time spent in special, vocational schools, often from as
early as 14 years old. Where they work particularly effectively, such programmes also offer opportunities for young people to move to different routes through education and training if they change their mind about their intended direction. In these cases, social partners have a strong voice in the design, delivery and implementation of these programmes which helps ensure their relevance for the participants and for society more widely. Three countries have particularly strong systems of initial VET and are therefore worth highlighting in more detail: Germany, the Netherlands and Denmark. In these countries, there is strong evidence that these robust systems of initial VET have helped keep youth unemployment lower than member states with lower levels of labour market regulation, such as the UK.
1) Initial VET in Germany Germany has a very well-developed and sophisticated system of VET which is negotiated and planned through a system of social partnership involving all relevant stakeholders including the state, local government, employersâ€™ associations, employers and trade unions. It is also underpinned by a Federal-level legislative framework regulating the employment of Apprenticeships. Around 1.8 million young people are engaged in these schemes, which represents approximately half of young people paying social security contributions. The system is based on individual Apprenticeship contracts that require compulsory attendance at a vocational school. The cost is shared between employers and the state: companies pay their own training costs and the government funds schools. Despite this, since the early 2000s, employers have been pushing for greater pay flexibility with regard to Apprenticeship pay. National and sectoral tripartite (employersâ€™ associations, unions and the state) agreements determine the definition and regulation of both new and existing occupations. Qualification profiles, VET standards, exam requirements, the duration
and content of training programmes, the level of qualifications and the criteria for quality assurance are all agreed through this process. Social partners are also tasked with agreeing details of working conditions for apprentices. Funding of the system is shared by the state, companies and sometimes a contribution from individuals themselves. The state contribution is made at both federal and state levels as well as through agencies such as the federal employment service. Companies have a number of mechanisms through which to access funds to pay their contribution to initial VET, so not all comes directly from profits or sales. Importantly, companies can also access a number of tax reliefs, subsidies and state-funded bonuses for training which may off-set a significant part of the cost of training. In general, econometric analyses strongly indicate that the VET system is an effective mechanism to address some of the challenges of youth unemployment. Youth unemployment in Germany has been persistently lower than competitor EU countries throughout the 2000s and since the crisis, which is largely attributed to VET provisions but also accounted for by a declining youth population. Despite these successes, challenges were evident prior to the financial crisis. One problem is the required competence at age 15 for entry into Apprenticeship systems. An OECD study undertaken in the mid2000s showed that 20% of 15-year-olds did not have the basic competences to join a typical initial VET programme (OECD 2010). Particular disadvantaged groups such as children of migrant workers are more likely than other groups to find themselves in that 20% and therefore face challenging labour market transitions. Gender equality issues are also presented by the fact that higher-paid Apprenticeships tend to be in sectors that have historically been dominated by male employment (particularly manufacturing). And questions are currently being posed about whether VET systems make sufficient provision for employers to retain staff after the end of the Apprenticeship.
These challenges are dealt with through the system of social partnership. To this end, a new national-level pact was signed in 2011 committing social partners to expand Apprenticeships, to bring in new employers and to focus on providing additional support to young people with particular challenges entering the labour market. Some sectoral collective agreements have also specifically addressed the problems of postApprenticeship transitions to permanent employment. An example is in the Bavarian metalworking sector where the employers’ association and the Metalworkers’ Union agreed to a job transfer agency to operate as a temporary work agency. Young workers who are not employed on a permanent contract after completion of initial vocational training (IVT) can transfer to this agency and return to their former employer as temporary agency worker. The agreement stipulates that they are then employed on a standard contract as soon as possible. The agreement is cofunded by the employment agency and the Bavarian Labour Ministry. General agreement among national and international observers is that this is a system that works extremely effectively in ensuring provision of appropriately skilled workers within the German economy. But it should be noted that it works because of strong commitment from all social partners to a system that enables national, sectoral and company-level bargaining to interact effectively.
2) Initial VET in the Netherlands As described below, the system of VET in the Netherlands also brings together sectoral and company-level collective agreements and is underpinned by a national legislative framework. In common with Germany, there is an emphasis on the involvement of all social partners in tripartite agreement on the design and implementation of VET programmes. However, some commentators note that the way the initial VET system developed in the 1980s – and in particular the legacy of the previous dominance of school-based VET – meant that the links between different levels of collective agreements
never had an opportunity to be developed and strengthened in the way seen in Germany. The Dutch initial VET system clearly differentiates between vocational and academic (general) routes and public debate differs from that in many countries in that there is little enthusiasm to integrate these routes. Importantly, this is largely explained by the fact that there are numerous stages at which an individual can swap between the routes. Public debate has largely focused on strengthening the vocational route by ensuring that the provision of workplacebased learning is effective and of good quality. To this end, recent policy developments have sought to ensure that the compulsory workplace activity required in the vocational route is of high quality and attractive to participants. Despite these efforts, most commentators agree that the school-based route is regarded as more prestigious than the Apprenticeship route through IVT. Another feature of VET in the Netherlands is that the system is largely funded and regulated by the state. This is underpinned by a right to not only school education but also education up to intermediate vocational level. As a consequence, most vocational education is provided by public training organisations (state funded schools, colleges, etc.) but private provision has been allowed for since 1996. Participants over the age of 16 pay a fee to participate in VET programmes but this is largely off-set by the fact that they (and/or their families) also qualify for financial support through child support (for those under 18) or education grants (for over 18s). Companies can benefit from tax incentives to provide workplace training for this age group and more widely, although this is under pressure in the current financial context. Importantly, companies receive a tax incentive to provide Apprenticeships and VET for young people. A particular feature of many VET systems, including in the Netherlands, is the existence of a training levy on employers. The precise mechanism for agreeing the levy varies but the most prominent are
In response to the crisis, the Dutch government and social partners signed an agreement in 2009 addressing issues of youth unemployment. Specifically of interest here is a commitment to expand the provision of Apprenticeships, a provision for the state and company to provide training opportunities where workersâ€™ hours are reduced, and efforts to improve the proportion of young people staying on in education. Overall, unemployment in the Netherlands is low and has not been hit by the crisis as badly as many member states. Young workers, however, remain a considerable concern and these mechanisms are intended to promote education and training opportunities in the period when employers are hiring fewer workers.
3) Initial VET in Denmark sectoral training and development funds. The cost to employers varies, but it is negotiated as part of the sectoral collective agreement and typically is between about 0.1% and 0.6% of the company wage bill depending on the nature of skills in the sector and the complexity and cost of training provision. The funds were established to ensure that VET is embedded within sectoral and company provisions. But research indicates that ensuring the implementation of agreed sector collective agreements on training is difficult at company level, especially in SMEs. As a result, around 40% of Dutch firms are associated with a training fund and this is skewed towards larger employers. The agriculture, manufacturing and catering sectors make particular use of these systems and in some sectors there are particular efforts to use these funds to target training at groups that may be more vulnerable: women workers, low-skill workers, migrants, etc. For Apprenticeships, the state pays for the schoolbased provision of training while the employer pays for on-the-job training. Sectoral collective agreements also regulate the terms and conditions (including wages) of apprentices.
The first striking feature of the Danish labour market is that education attainment is among the highest in the world: 80% of the population has an upper secondary education. Since the early 2000s, the policy of the government has been to raise this to 95%. Social policy in Denmark places a significant emphasis on training and education at all levels and public funds are channelled to these ends. Participation rates are very high and there are clear systems for ensuring quality oversight by the Ministry of Education. In particular, there is a clear framework of guidance, agreed through tripartite mechanisms, which encourages participation in education and training until at least the age of 21. The Danish initial vocational training system focuses on the provision of Apprenticeships that alternate periods in classroom-based training and periods of training in the workplace with the time being split approximately one-third, two-thirds respectively. It is a popular system with around 35% of all companies employing apprentices as compared to around 5% for the UK (UKCES 2011). Despite the relative popularity of the system, new alternative routes into the labour market along with declining youth cohorts mean that numbers participating in Apprenticeships have declined in recent decades.
The state funds vocational schools although they have a high degree of autonomy over the content and delivery of programmes. Participation in the programmes is free and apprentices receive a salary both for the time at work and the time at schools. Companies are then compensated for the periods when the participant is engaged in school-based activities. Compensation comes from a national, statutory fund into which all employers contribute. As with both the German and Dutch system, active participation by social partners is central to the design, delivery and monitoring of the system. A tripartite system is in place at national, sectoral and local levels to ensure appropriate content and delivery of the training. There are, nonetheless, some weaknesses. Specifically there is concern about whether enough Apprenticeships are being offered. Where insufficient Apprenticeships are offered, vocational schools offer workplace simulations and there is some concern that this is not an effective alternative to real workplace experience. There is also a high drop-out rate from the first year of upper secondary education which is insufficiently understood, although it should be noted that most participants who drop out of one programme stay in education and training, but on a different programme. There is also concern about the cost of providing such wide-ranging financial support for VET â€“ and education more widely. The development and regulation of initial vocational training is an extremely important area in helping young workers make secure transitions into good work and usually works most effectively when there are mechanisms to balance the interests of unions, employers and the state. This illustrates why it is so important that we consider not only the numbers of jobs available to young people but also the quality of jobs available when examining the transitions young people make into employment.
Concluding comments Three points of comparison with the UK situation are particularly noteworthy with regard to the international policy context: systems of involvement of social partners, funding arrangements for initiatives to promote youth employment, and the content of Apprenticeships. 1) The countries that have particularly good records of providing systems to help young people into goodquality employment generally have strong systems of involvement of social partners in the process of designing, implementing and monitoring the delivery of those systems which is largely lacking in the UK context. This is important because it ensures that future skills requirements at company, sectoral and national levels are anticipated and planned. It also ensures that terms and conditions of employment of young people entering VET systems are regulated through collective agreements at the relevant level. It should be noted that the nature of the collective agreements means that all parties have had to make compromises as the systems have adjusted to recent pressures including, but not limited to, the effects of the financial crisis. Specifically, unions in some sectors have had to make concessions about working hours and lifting wage rates for apprentices. Employers have made some concessions around retaining employees and providing opportunities after initial VET. As a consequence there are good examples of companylevel agreements that prioritise the recruitment and training of young workers. 2) The second point is the funding of Apprenticeship and training systems. In all cases, there is strong support for a significant contribution from the state, but there is also a requirement on employers to part-fund initial VET. The UK lacks any widespread requirement for employers to contribute to the cost of training, although there are compulsory levies in industries such as construction
and engineering, and there are voluntary levies in some sectors such as film production. It is inevitably difficult to generalise, but a study by the Institute for Fiscal Studies (Greenhalgh 2002) showed strong international evidence that training levies help secure higher participation in training for adult learners. This seems to support the general direction of research evidence which is supportive of the effects of an employer training levy in most national and sectoral settings. For young workers the picture is more mixed, largely because of the methodological difficulties of separating this group from other groups of workers, and because of the interaction with state funding for education routes. These make it difficult to see the effects of employer-funded training on this group as a separate factor from, say, school-based vocational training funded by the state. Nonetheless, the general direction of academic and policy research in most countries studied for this report seems to indicate a positive effect of a mechanism to compel employers to make some contribution to training in general and training for young workers specifically. 3) A further issue raised by a recent Institute for Public Policy Research (IPPR) report (Dolphin and Lanning 2011) looking at Apprenticeship training in different EU member states pointed out that Apprenticeships in countries such as Germany, thw Netherlands and Denmark involve much wider content than UK equivalents. They are also, by and large, regarded as highly prestigious. Both issues are related to the first point about social partnership. One of the primary reasons why Apprenticeships are so well respected in the competitor countries is that stakeholders are involved in their design and delivery which helps ensure that they are relevant and appropriate to young people, employers and the demands of society and the economy more widely. There are often also mechanisms for young people to move between vocational and academic routes. Without a national forum providing this kind of systematic overview and strategic leadership, it will always be difficult for the UK system to ensure that there are appropriate
opportunities for young people to make secure transitions into high-quality employment. Systems of school to work transitions are nationally specific and reflect particular institutional trajectories established early in the development of universal and compulsory schooling. As a result, there cannot be any simple policy transfer from one national context to another. Nonetheless, it is clear that these institutions and processes matter in explaining issues such as the higher rate of youth employment in some countries.
UK policy with regard to helping young workers during the crisis This section lays out the UK policy context with regard to young people’s transitions into work. Importantly, there is substantial evidence that, for many young people, these transitions are not simply about a series of “stepping stones” from education to work, or from unemployment to a full-time job, but instead also include periods of further unemployment or time in education and training. As such, this section first investigates the transitions that young people make between work, unemployment and education, often churning between the three rather than taking a linear path. Our focus here is on young people who do not participate in higher education. Changes to higher education policy and, in particular, the shift of payment of fees from the state onto individual students and their families have had a considerable influence on young people’s decisions about education, training and work. Where this is relevant – especially in the later interviews with young people themselves – we highlight this, but here our attention is on young people who choose not to pursue higher education.
Transitions into jobs – and transitions out of jobs Young people are much more likely than others to work in sectors of the economy where insecure work is common (UKCES 2012b). MacDonald and Shildrick (2011) note that most insecure work is to be found among younger and less qualified workers. They note that the temporary and insecure nature of the jobs taken by younger people do not automatically lead to labour market exclusion, but to a long term churn of “underemployment and economic marginality”. In particular, they suggest that those aged 16–18 may make the transition from school to youth training to unemployment to a job. Those aged 18–26 may take a different route, from a job to unemployment to further education to unemployment to a government-funded scheme to help unemployed people. The jobs that they get are often low skilled, low paid, low quality and on a temporary basis, with little opportunity to develop skills to move into permanent roles. MacDonald and
Shildrick also find that when people leave these jobs, it is typically on an involuntary basis, whether through dismissal, redundancy (particularly under a last in first out scheme) or because a temporary role had come to an end. Given this churn between unemployment, work and welfare to work programmes, the role and interaction of the social security system, educational policy and work programmes requires investigation. The aim of this chapter is to summarise recent policy developments in the UK and to highlight how these policies may facilitate young people’s transitions into work, and in particular higher-quality jobs.
Active labour market policies In April 2012, the government launched its Youth Contract as the flagship initiative to tackle youth unemployment. In brief, it provides employer incentives to recruit young people, to develop Apprenticeships and to provide work experience to claimants of Jobseekers’ Allowance (JSA) aged 16 to 25. Every JSA claimant in that age group will be offered a work-experience placement or a place on a sector-based work academy after three months. This runs in addition to various forms of support to employers to provide work opportunities through the Work Programme. Last year, the TUC published a report entitled Generation Lost evaluating these initiatives and raised a number of criticisms (Bivand 2012). Our objective here is not to replicate that research and its findings, but to use those to inform our focus on skills and education policy. A number of points and recommendations from that report are particularly relevant. In particular, that report was critical of the focus only on those claiming JSA and argued that policy interventions must acknowledge that not all young people without work claim JSA. Further important points from that report include criticism of the quality of training provided on work-experience placements and in sector-based work academies. The author also makes the important point that previous schemes, and in particular the Future Jobs Fund, had
involved trade unions and therefore helped ensure that active labour market policies did not simply displace existing jobs. We are in agreement with the policy recommendations included in that report which focus on: ❚❚ boosting overall economic activity to improve
job opportunities for all workers, including young people providing long-term unemployed young people with a job guarantee rioritising young people without work rather than only those claiming JSA through effective active labour market policies that provide good-quality training and work experience providing wage subsidies to incentivise employers to recruit young people expanding education and Apprenticeship opportunities.
Education policies One of the most important forthcoming changes is the raising of the participation age. Currently in England education is compulsory up to the age of 16 and the participation age will be raised to 17 in 2013 and 18 in 2015. This will require young people to remain in education or training (including employment involving some form of accredited training) until that point. A variety of options exist so that, for example, a young person could be engaged in setting up their own business or volunteering as long as they are also engaged in some part-time training towards an accredited qualification. In general, the view of policy makers is that these changes will not present a significant shift of requirements as already the vast majority of 17- and 18-year-olds do participate in some form of education, employment or training, although recent census data from the Department for Education indicated that there is some uncertainty about the exact figures. However, the risk according to our interviewees, especially careers guidance professionals, relates to
the danger that without engagement with employers to provide opportunities to young people who do not want to continue in education, there will be young people who opt for training programmes that are not necessarily appropriate to the skills needed in the local labour market. A later section of this report considers the lack of strategic attention to processes of “job matching” and this is an important area of possible future policy development.
1) Funding post-16 education A crucial change affecting the decisions facing young people about education, training and employment relates to the overall policy direction to shift to a system of loan financing for much post-16 education. The full effects of these changes are still unclear, but it is certainly evident from our interviews and focus groups with young people that the requirement to take on loans for higher education participation (and in the near future for further education for adults aged 24 and above) is influencing their decisions about education and training. The Generation Lost report (Bivand 2012) strongly recommended that government and policy makers keep an eye on data relating to participation in post-16 education and be prepared to act swiftly if there is any evidence that funding policy may have a detrimental effect on participation rates. We wholeheartedly agree with this recommendation.
2) Replacement of Education Maintenance Allowance The Education Maintenance Allowance (EMA) was fully introduced in 2004. Dependent upon household income, young people on eligible courses, including A-levels, BTECs and NVQs, could claim up to £30 per week assistance paid directly to them. Under the scheme, 650,000 young people from low-income families in England, or 45% of 16- to 18-year-olds in full-time education, received grants. The scheme was scrapped in England in 2010 and replaced with a bursary fund administered by schools and colleges and targeted at the most vulnerable young people.
Proponents of the bursary fund suggested that it would provide a more targeted system, with the largest amounts of £1200 a year going to 12,000 young people considered to be of greatest need, such as those in care. From the remaining £165 million, schools and colleges can give discretionary payments to help low-income students with expenses such as books and transport. Critics of the bursary fund argued that the new policy has made the system more complex and less attractive to young people. The policy was also criticised by trade unions with, for example, the UCU claiming that “thousands of poorer students [are] being priced out of studying”. While there is little data to analyse the effects of this withdrawal in England, a report by Alan Milburn, the government’s adviser on social mobility and child poverty, stated: “Research into those in receipt of the new bursary fund has found that, while it is too soon to quantify the long-term impact on student numbers, many young people are not receiving the financial backup they need to support their everyday living expenses” (Cabinet Office 2012). In our interviews with careers guidance professionals, it was strongly felt that the removal of widespread support for further study had a significant and negative impact on the opportunities for some young people to continue their studies. One important point related to the message that EMA sent to the parents of young people. “It [EMA] clearly gave a message that it was worth carrying on studying. For some of those young people it made the difference in the household income between them needing to work and them being able to study” (careers adviser, Liverpool). Another commented, “If I had a magic wand one of the first things I’d do is bring back EMA. It made such a difference. It went to them [young people] and it was easy to understand. The bursaries are so varied that they can make a difference, but they aren’t easy” (careers adviser, Nuneaton). These were typical comments. Careers guidance professionals were clear that they had seen considerable negative effects on participation and
attitudes towards further study among young people from poorer backgrounds as a result of moving to the more complex system of allocating bursaries and they felt it was hard to advise about the advantages of continuing in education as a result.
3) The 16-hour rule A further link between social security policy and young people’s decisions regarding education can be seen in what has become known as the 16-hour rule. The 16-hour rule refers to the maximum number of hours per week an individual can study at college without being classed as a full-time student. It also refers to the maximum number of hours a person can work while also being able to claim Jobseeker’s Allowance or Income Support. With regard to education, this is particularly important because, if an individual is undertaking more than 16 “guided learning hours” per week, a programme is considered to be full-time and the student is regarded as being unavailable to work, and therefore unable to claim Jobseeker’s Allowance. In a report entitled Back to Work (Lee 2010), Scotland’s colleges have been critical of this rule, arguing that it is an arbitrarily imposed limit that encourages people to study part-time, whether or not it is in their interests. The Association of Colleges has also regularly raised concerns about the rule and has supported calls for it to be abolished. The rationale for abolition is that it is unwise to penalise young people for taking on additional study hours to improve their skills while they are in receipt of JSA and it may act as a disincentive for learning and skills development. However, the rules are complex and the way in which a programme of study is classified varies because of the precise meaning of the term “guided learning hours” and there is some evidence that there is variation in practice between colleges and other training providers. In practice, a decision on whether a programme falls into the category of full-time or part-time is informed largely by how it is described in
research in this area (but not from our case-study employers), it seems that some employers are building labour flexibility by restructuring full-time jobs into two or even three smaller part-time jobs. Inevitably, these smaller jobs fall under the 16 hours, but this seems to be driven by a desire for workforce planning flexibility rather than any concerted effort to respond to government policy in this area.
Apprenticeships The development and provision of Apprenticeships is central to improving training and employment opportunities for young people. An essential concern relates not only to the quantity of Apprenticeship opportunities but also to the quality, and this has been highlighted in previous TUC analyses (see, for example, Grindrod and Murray 2011). Specific concerns relate to equality of access to and recruitment onto Apprenticeship programmes, and the quality of training provided. As we shall see, these themes recur throughout the new research evidence presented in this report. a prospectus. This can result in considerable variation in practice between providers and programmes, which adds to confusion and variation in interpreting rules. A further potential disadvantage to young people developing their skills is that they have to be prepared to give up a programme of study classified as parttime (i.e. less than 16 guided learning hours) if they are successful in finding employment. A recent IPPR report (Delorenzi 2007) highlighted that there is considerable scope for improving the transition between training and employment in this kind of situation and that there should be flexibility for the student to continue the programme in their own time. Similarly, the rule can act as a disincentive for some people to take on more than 16 hours of work. Despite probing participants we did not come across specific examples of this in our research, but there is anecdotal evidence that some employers may be responding to requests from staff to design short-time jobs in order not to fall foul of this rule. From reviewing previous
Echoing the points made in the previous section of this report, one important point highlighted by Grindrod and Murray (2011) is the scope for social partners to be involved in regulating Apprenticeships at all levels. Not only does this help ensure that Apprenticeships do not displace existing jobs, it also helps ensure that training and skills development are of an appropriate quality, that wages, benefits and health and safety are appropriate and that equal opportunities policies are developed and applied. There is an important role for trade unions in negotiating and monitoring quality Apprenticeships with employers. One crucial debate highlighted by previous research and the new evidence presented later is the potential for new regulatory measures at sector level. As is shown in subsequent sections of this report, employers find the current complexity in policy in this area very frustrating. It seems that there is potentially an important role for bodies such as the UK Commission for Employment and Skills and Sector Skills Councils to involve social partners and
provide some form of regulation and planning for Apprenticeships at sector and national levels. The recent Richard Review of Apprenticeships (Richard 2012) is one of many reports and reviews that makes robust points about the need for quality assurance in Apprenticeship provision as well as expanding the numbers of Apprenticeships. It is clear to us that one of the most effective ways of achieving this is to secure the involvement of a wide group of stakeholders, especially trade unions who are uniquely placed to inform the design and delivery of Apprenticeships at local, sectoral and national levels.
Traineeships The government is currently consulting on proposals for a programme of Traineeships of around six months for young people between the ages of 16 and 24 to develop skills and experience necessary to secure an Apprenticeship. The proposals were put out to consultation in January 2013 with the intention of launching in September 2013. Although questions remain about the form and delivery of these Traineeships, it is clear that they have the potential to fill an important gap in the transition from education to employment and are welcomed as long as there are mechanisms in place to ensure quality provision.
Concluding comments MacDonald and Shildrick (2011) have shown that, rather than insecure or temporary work providing a natural stepping stone into permanent work, young people are likely to churn through several stages of work, unemployment, education and training. As such, policies towards social security and education are fundamentally interlinked. There is considerable policy complexity in this area, with different government departments taking the lead on specific areas. As a result, there is scope to criticise the lack of joined-up policy making which results in difficulties in measuring the aggregate effectiveness of policy across the board. What is clear, though, is that there is comparatively little influence of social partners
(employers and unions) compared to other EU member states. We will see in subsequent chapters that this creates complexity and confusion when employers, unions and young people engage with these systems. There are important limitations on the extent to which a focus on developing “soft skills” will help young people find work when the numbers of opportunities are so limited. Nonetheless, young people are disadvantaged by their lack of experience, so these initiatives should not be dismissed. What is more important on an aggregate level, however, is ensuring that good-quality opportunities for work and training are available to young people. Apprenticeships, training subsidies and other incentives for employers to recruit young unemployed people all provide important opportunities of this kind. However, as we shall see in the subsequent chapters, there are questions about how many employers are able to engage with this complex area. And it is clear that, in some cases at least, the qualities of opportunities open to young people can be improved. It also seems contradictory that at a time of crisis for young people, policies to shift the cost of education and training onto them have continued to be pursued.
Policy implications We support the recommendations of the Generation Lost report (Bivand 2012) to improve the aggregate employment opportunities for young people. In addition we suggest that: ❚❚ All stakeholders should continue to monitor
and evaluate the impact of changes to funding for both further and higher education on participation rates. The government should be prepared to review these changes and act swiftly if there is any evidence of a negative impact on participation both on the aggregate level and for disadvantaged groups. ❚❚ Bursaries that replaced the Education Maintenance Allowance are complex to deliver and difficult for learners to understand and should be reconsidered.
❚❚ The 16-hour rule is problematic and can act as a
disincentive to jobseekers to improve their skills and further their education. We recommend removing this rule. There is an important role for involving social partners (employers and unions) in the development and implementation of policies in this area. Of particular concern is the quality and quantity of Apprenticeships available and trade unions and other stakeholders are well placed to input into local, sectoral and national design and implementation of Apprenticeships. There is scope for a co-ordination role by bodies such as Sector Skills Councils and the UKCES to provide clearer guidance to all social partners. There is also scope to provide incentives to training providers (schools and colleges) to work with employers to provide learners with quality work experience and job placements while they are in education and training. Proposals for Traineeships clearly provide an opportunity for young people to develop skills and experience which is welcomed. However, attention needs to be paid to the mechanisms for designing and monitoring their quantity and quality.
Trade union initiatives to increase opportunities for young people A recurring theme in previous investigations of youth unemployment has been the focus on the supply side and, in particular, a focus on ensuring the ‘employability’ of young people. Studies investigating the employability of younger people, and in particular an apparent gap between the skills held by young people and the skills that businesses are reported to require, have often led to policy recommendations aimed at increasing the levels of qualifications of young people. This is necessary but not sufficient to address the challenges of youth unemployment. There is also a clear need to focus on the demand side of the problem by looking at the quantity and quality of jobs and training opportunities available to young people. The following two chapters investigate the demand side and the potential role of trade unions and employers in increasing the numbers and quality of opportunities available to young people. This chapter shows that while trade unions in the UK have faced a wide range of campaign issues, including pay freezes and pension reforms, there have been relatively few collective bargaining agreements specifically addressing the interests of young people during the period following the financial crisis. However, despite this difficult climate, there have been some successes in bargaining for young people, notably on wage rates for younger workers, and also around Apprenticeships. For this chapter, we interviewed 31 trade union officers and organisers from 12 different unions covering a wide range of sectors. We also interviewed organisers and policy makers from the TUC and those involved in specific campaigns around youth employment. We were particularly keen to identify examples where unions had either launched a successful initiative to improve the quality and quantity of opportunities for young workers, or where they had bargained for a collective agreement with an employer that specifically addressed issues of relevance. By focusing on examples of success, we can see how unions more widely can respond to the challenges of youth employment.
Transitions into employment 1) Issues facing young people Unsurprisingly, interviewees from trade unions reported that the main challenge facing young people making the transition from education to the workplace is the lack of availability of jobs in the current economic climate. In addition to supporting employers to offer Apprenticeships, some respondents noted that their unions were particularly concerned with labour market integration post-qualification. These respondents identified the challenges for workers in workplace-based Apprenticeships who were not offered employment following completion of the Apprenticeship. There was concern that such Apprenticeships were being used to offer employers cheap labour rather than as an investment in the skills of their workforce. These interviewees noted that provision of even a relatively short period of employment following training was likely to improve young workers’ chances of securing future employment. Echoing later comments from employers, when roles are advertised, union interviewees reported that they felt younger workers were disadvantaged in the recruitment and selection process because young people were comparatively poor at selling themselves on CVs and application forms. Young people were also reported to struggle with competency-based interviews used in the selection process. In particular, young people were felt to be poor at recognising when their experiences had demonstrated a competency; for example, participation in sport demonstrating teamwork. This may be a contributory factor in the common perception of employers that there is a skills gap among younger applicants. It may be that young people do have the “soft skills” that employers say they require but are poor at recognising/ displaying them.
2) How can unions aid with transitions into work? Given that one of the challenges facing young people is the transition from education to the workplace, we found good examples of unions negotiating around this issue, but it was not universal. Part of this may be explained by the fact that these young people are not yet working and are not members so unions may feel that their primary responsibility is to current members paying subscriptions. That said, it is common in occupation-based education, such as for teaching, nursing, social work, physiotherapy or naval trades, that unions recruit and engage with young people while they train. We did find examples of unions engaging with employers around how young workers move from workplace-based training schemes into employment, typically by focusing on ensuring the provision of stable employment after training. Nautilus noted that most cadets who were employed during their training remained in stable employment on graduation (see Box 4). However, those cadets who were not employees during their training found it more challenging to access employment upon graduation. The successful negotiation of employment with major employers during training is an important way in which the union has supported transitions into the labour market and represented the interests of their young members. BECTU is also able to connect with young people and support them in transitions to work, partly because of the nature of the industries they cover, such as TV, film, computer games, and theatre. Because of the projectbased nature of work in these industries, short-term work is common and experience and networks are crucial in securing employment. This is why many young people are prepared to take unpaid work to gain experience and skills. As a result, BECTU has created forums for young people working in the creative industries to help them avoid the worst excesses of unpaid internships. For those who are working freelance on projects, BECTU has worked with Sector
Skills Councils to create training schemes. The union also has a new entrance membership that is heavily subsidised, and offers young people not yet in work advice on interview techniques and access to forums to discuss transitions into work (see Box 2). Unions such as the CWU and Usdaw have also been involved in negotiating to ensure high-quality work experience schemes with employers (see Box 1 for an example of Usdaw’s work in Tesco supermarkets). These typically have a structured training programme and clear development of work-relevant skills. These kinds of programmes can help young people build experience, skills and confidence in work. A further example of wider efforts to help address young people’s challenges finding work is found with Unite’s community unionism project. For a subscription of 50 pence a week, young people and unemployed people are able to join the community section of the trade union. In addition to some servicing benefits, young unemployed people are offered help writing CVs and application forms, as well as interview practice – areas noted by employers as those in which young people were found to be particularly weak.
3) Workplace concerns When young people are successful in making transitions into work, our interviewees highlighted a wide variety of workplace concerns among younger workers. Some of these are similar to the concerns of the wider workforce while others were experienced mostly or entirely by younger workers. An example of this was that two unions we spoke to had developed policies on bullying and harassment and included them as part of their bargaining agenda because they were raised as particular concerns by young members. Younger workers are also concerned about job security, particularly where they were working on a temporary basis, or in roles with a probationary period. A particularly important issue is that younger people were reported to want more training as they felt that it was linked to job security. Given the importance
of pension issues within some unions, it is relevant to note that respondents reported that this was rarely an issue that enthused younger workers.
4) Negotiating pay rates for young workers We found a number of examples of unions negotiating to help young people with regard to their core terms and conditions of work, and particularly focusing on areas where young people can face unequal treatment. A particularly good example is the work done by Usdaw in negotiating adult wage rates for all workers (see Box 1). Usdaw has long been involved in campaigns for a national minimum wage (NMW) and, in particular, for this to apply to all workers regardless of age. Further involvement of Usdaw in working for a higher youth wage rate in supermarkets is described in Box 1.
Negotiating Apprenticeships and future directions Despite the challenges facing unions in the contemporary labour market, there is evidence of innovative work being undertaken to help young people and the most promising is the negotiation of training opportunities, particularly Apprenticeships, with employers. Echoing other evidence, some union interviewees expressed concern that Apprenticeships are often targeted towards older workers, and that there are not enough under-25s involved. In some areas there is also a concentration on providing structured training schemes mainly to graduates, for example engineers in the telecommunications sector. By comparison, Apprenticeships for college leavers were found to be rather more haphazard, although there have been improvements in quality when unions have been involved in developing programmes and ensuring that structures are in place to monitor quality. This approach of working with employers to structure and develop Apprenticeships is particularly important in areas where trade unions are currently strong and might be an important tactic to address the comparatively lower level of Apprenticeships offered in
the public sector. There are already examples of some developments in this area and one is the extension of the number of civil service Apprenticeships negotiated by the PCS since an agreement signed in 2009. This agreement particularly emphasises the importance of expanding participation among under-25s. In the Scottish civil service, for example, employers and unions are already working together to make sure that there are good-quality Apprenticeship opportunities for young people. Unionlearn are also working in this area and provide a number of training programmes for workplace representatives to develop an understanding of Apprenticeships and how unions can put the quantity and quality of opportunities available on the bargaining agenda. An innovative example in this area is the idea that unions might become accredited training and skills providers themselves, as noted in the Communitas example (see Box 3). Community highlights that unions are particularly well positioned to support the implementation of high-quality Apprenticeships because of their ability to understand the skills needs of their sectors and employers. As such, unions can either provide Apprenticeships to meet these needs or support external training providers in designing appropriate Apprenticeships. They are also well positioned to ensure that young workers are offered suitable employment after completing their Apprenticeship. This strategy has several benefits. First, it provides young workers with access to highquality Apprenticeships and post-Apprenticeship employment. Second, it gives unions very good access to young workers during their Apprenticeships and enables unions to recruit and engage these workers. Third, it offers a funding opportunity that could be financially beneficial to the union. Finally, by offering an Apprenticeship into a skilled occupation the union may retain the young worker in membership even if their attachment is to a specific employer workplace. It is clear that providing good-quality schemes with secure employment post-qualification would disproportionately advantage young workers.
It is clear that where they are recognised there is much that unions can do to help young workers make transitions into employment and we found numerous examples of innovation and good practice that could be rolled out more widely. Ensuring that there are good-quality and decently paid work opportunities is also vital. Unions have acted innovatively around Apprenticeship provision. Negotiating wider development of good-quality Apprenticeships in both the private and public sectors presents an ideal opportunity for trade unions to help young workers in the current economic climate. And there is scope to engage more actively by becoming training providers in their own right. Some unions have also been very pro-active in extending adult pay rates to all workers which impacts large numbers of young workers whether or not they are union members.
❚❚ Unions and their representatives have a valuable
role in negotiating better quality and more Apprenticeships, training opportunities and work placements. They also help to ensure that any work placement schemes, Apprenticeship programmes and other routes for young people into employment offer good-quality, paid opportunities to develop skills. Negotiating such routes to training and high quality job opportunities should also include agreement for unions to have access to young employees to help organise them into their relevant trade union. Mimicking the Communitas example, unions could seek to become training providers in their own right. Unions in low-paid sectors should consider prioritising negotiations to agree that all workers should be paid the full adult rate of the National Minimum Wage. Local union networks (including, but not limited to trades councils and initiatives such as Unite’s community unionism membership) are well placed to understand local labour markets and to work with colleges, employers and young people to explore opportunities for employment and to negotiate with employers to provide good-quality opportunities.
1 | Usdaw, supermarkets, the minimum wage and Apprenticeships
The retail sector in the UK has experienced a significant downturn in fortunes since the financial crisis of 2008 with significant closures and redundancies. Given the high numbers of young people working in retail, this has affected them to a disproportionate extent. Despite the prevalence of low-paid jobs in the sector, opportunities to negotiate for young workers exist. Supermarkets are the more profitable sector and employ large numbers of young workers. Tesco, for example, has around 70,000 under the age of 25. As a result, successful collective bargaining is proportionately more likely to affect them. Usdaw has agreements with Tesco, the Co-op and Morrisons, and the union is part of a consultative forum with Sainsbury’s. Usdaw’s work on youth wage rates, and also Apprenticeships, at Tesco and Sainsbury’s are outlined below.
Tesco An increasingly global and diversified organisation, Tesco employs more than 519,000 people. Usdaw negotiated with Tesco in 2010 to abolish young workers’ pay rates, with the
adult rate being paid from age 16. In addition, Tesco offer a 12-month on-the-job Level 2 retail Apprenticeship. The apprentices gain experience and complete training in different departments, gaining an NVQ in Retail Skills and Technical Certificates in Retail and Communication/ Numeracy. Open to all store staff regardless of age, the largest uptake is among 16- to 24-year-olds. Importantly, retail apprentices are paid the rate they were receiving before their Apprenticeship began, and on completion they are encouraged to apply for various positions on higher grades. In addition, Tesco is currently in discussion with Usdaw as to how to improve the take-up of the Apprenticeship scheme within the company including the use of promotional days. Usdaw will have an input in these with a session aimed at dealing with any concerns people might have about the schemes, as well as advice regarding the application process, from both learning reps and current and recent Tesco apprentices. In addition, Tesco runs its own work experience scheme for unemployed 18–24-year-olds which Usdaw now supports after Tesco considered the union’s
Image: Jess Hurd/reportdigital.co.uk
comments. The Tesco work experience scheme now provides four weeks’ pay at the appropriate rate and a guaranteed permanent position if the individual successfully completes their placement. The Tesco paid work experience scheme applies to individuals referred to Tesco from Jobcentre Plus who choose to come off benefits for their four-week placement. The Jobcentre Plus Work Trial Scheme also exists for those who choose to remain on benefit rather than being paid for their four-week placement. Finally, Tesco also has a store-opening scheme dedicated to help in wider regeneration of run-down areas which Usdaw actively supports, welcoming that the vast majority of the jobs go to the longterm unemployed, including many young long-term unemployed. Usdaw, along with many other local community groups, positively support the planning process. Tesco deal with the initial pre-opening training using local training providers in areas like
Image: Jess Hurd/reportdigital.co.uk
basic numeracy and literacy. Once the store is open, this has led to a culture of training being developed that ensures that Usdaw’s learning reps have a high demand for access to Level 2 courses. This can help in career development of younger people.
Sainsbury’s Sainsbury’s employs around 150,000 people in the UK. Usdaw’s agreement with Sainsbury’s abolished young workers’ pay rates in 2011, and the adult rate is paid from 16. Sainsbury’s have a 15-month, onthe-job Level 2 Apprenticeship in either the bakery, meat or fish counters. The programmes develop a range of skills as well as health and safety, and training in selling techniques and communication. As with Tesco, the apprentices receive the rates they were being paid before the Apprenticeship began, and on completion of the programme are promoted to the relevant skills payment rate, currently beginning at 75 pence per hour extra.
2 | Bectuâ€™s engagement with young freelancers
Bectu is the trade union representing people working in media and entertainment industries such as broadcasting, entertainment, film and theatre. With the exception of the BBC, these industries are characterised by a high proportion of small employers. These industries are also characterised by project work, for example working on the production of a film, or the theatre run of a play. As a result, many people work on short-term contracts or on a freelance basis. The structure of these industries presents a considerable risk of potential exploitation, particularly for young people. Experience and professional networks are crucially important for young people entering the creative industries and internships and work experience are therefore vital. As a result, many young people take unpaid roles, working long hours sometimes in unsafe conditions, and are concerned that if they complain they will damage their career prospects. To help provide advice to young people entering these roles, Bectu launched the Creative Toolkit website which provides information on rights to young people related to pay, health and safety, and training. The website also offers advice on getting experience and finding work placements. The union also provides reduced rates of membership for those who do get jobs.
In addition, Bectu has been a long-term provider of skills training, particularly where individuals may not be able to access alternative training because of the size of their employer, or because of the projectbased nature of the work. Bectu also supports and is involved in industry initiatives such as FT2 (Film and Television Freelance Training). Funded by the film and TV industries through Skillset Investment Funds, Channel 4 and the European Social Fund, the programmes offered include setcrafts Apprenticeships, an advanced-level Apprenticeship that trains people in set production for theatre, film and television.
Given the number of small enterprises in media and entertainment, and also the short-term project nature of much of the work, this may seem one of the most difficult areas in which to develop Apprenticeships. However, in response to these challenges, Bectu has helped in the development of the Advanced Apprenticeship in Creative and Digital Media. This recognises that both freelancers and the smaller companies found in creative industries can find it difficult to invest in skills development.
3 | Communityâ€™s engagement with Apprenticeships
Community has set up a semi-independent training organisation called Communitas. The focus of this organisation is to provide members, their families and the wider community with training and education. It has recently begun to extend its remit to include the provision of Apprenticeships. Currently the union is working with employers with which it has existing links to connect them with Apprenticeship providers. Communitas identified issues with the variable quality of Apprenticeships, and the need to assist providers in creating Apprenticeships that give young workers the skills needed. They are able to vet training providers and have created good links with a number of high-quality training organisations through their engagement with unionlearn and the skills agenda. They are working closely with training providers to ensure high-quality programmes are designed. They also have strong links with some employers, generally with union representatives on site. Their ability to understand the needs of employers, coupled with their experience of working with training providers, allows them to negotiate effectively with both. Communitas has identified that high-quality post-Apprenticeship jobs are also important to the union. Community and Communitas work together to agree with employers on both the provision of quality Apprenticeships and also secure employment with quick progression to a living wage and access to promotion within the organisation. Communitas gave an example of one employer where Apprenticeships had been negotiated. The employer had been using a large number of agency workers to carry out core jobs. Community was unhappy about the use of long-term agency workers, and the terms and conditions under which they were employed. As part of the strategy to engage with employers around Apprenticeships, Communitas became involved and suggested
Apprenticeship programmes to the employer who had not previously considered this training option. Communitas and Community were able to put together a proposal, which the employer accepted, to replace agency labour with an Apprenticeship programme including a commitment to direct employment if it was successfully completed. In so doing they were able to create a pathway to quality and secure employment for young workers.
4 | Nautilus engagement with trainees Nautilus is the main UK union for the seafaring industry. The union has a long history of engagement with young workers and apprentices because of its place within the national body that regulates training and education in the shipping industry. There have been longstanding tripartite arrangements within the shipping industry to oversee education, training and Apprenticeships in the form of the Merchant Navy Training Board (MNTB). The board includes representatives from shipping companies, maritime colleges, Nautilus and the RMT and government bodies. Tripartite negotiations resulted in highquality training provision and tax advantages for companies that provided Apprenticeships and, for successful trainees, the provision of employment at the end of training. The union uses its role within the MNTB to represent the interests of its young members. In particular it has sought to negotiate conditions for trainees, to encourage direct employment rather than cadetships for trainees,
Image: Harald Joergens/www.haraldjoergens.com
and to increase the number of cadets offered employment for at least one voyage to ensure postqualification experience.
5 | Negotiating Apprenticeships for disadvantaged young people: Community at RSBi
Community is recognised at the Royal Strathclyde Blindcraft Industries (RSBi) which is a social enterprise that specialises in producing a wide range of furniture, kitchens, etc. for both public and private sector clients. It is a commercial organisation that competes for contracts like any other. At the same time, it is committed to providing support for workers with disabilities and supporting the regeneration of the local community. It employs around 250 workers in total. Community has successfully negotiated training opportunities for young people with disabilities. These take one of two main forms: a Schools Vocational Programme and a programme for apprentices. The Schools Vocational Programme provides students with disabilities who are aged 15â€“17 with an opportunity to gain work experience
in a manufacturing environment. The programme allows these young people to undertake two units of the Scottish Vocational Qualification in Performing Manufacturing Operations. The Apprenticeship programme currently has around 430 apprentices undertaking a wide range of skills training. These Apprenticeships are delivered through a skills academy and recruitment is particularly targeted at young people who have some form of disadvantage including, but not limited to, those with disabilities, long-term unemployed and NEETs. The objective of the union and the organisation is to work in partnership to improve the employment opportunities for young people with disabilities. The programmes have a high success rate and have resulted in a number of young people finding employment in the RSBi factory in recent years.
Employersâ€™ experiences hiring and training young people Remarkably little research has been done about the demand side of the labour market with regard to initiatives to help young people and we are in agreement with other commentators (Keep 2012) that this is a major omission in policy development. Most explanations of higher levels of youth unemployment rest to some extent on explaining the preferences of employers during recruitment processes. The most common explanations include: low levels of work-appropriate qualifications, a perceived lack of experience of younger workers especially with regard to their work-relevant skills, and potential disincentives for employers in providing training for young workers. Developing policy responses to address this complex range of reasons why young people are finding labour market transitions to be more complex, less secure and more extended in the contemporary labour market requires an understanding of how and why employers recruit young people. It should be noted at the outset that only around a quarter of UK employers hire young people directly from education (Davies et al. 2012), so we know that the majority of employers are not engaged in this area. Our research shows that even where employers are keen to engage in initiatives to recruit young people, they still experience significant problems and barriers to extending these initiatives more widely. This research has focused on employers who are engaged to some degree in addressing the challenges of youth unemployment because it allows us to understand the problems and barriers they face. This allows us to understand quite how complex it is to engage in, for example, establishing Apprenticeships and other training opportunities for young people. To find these employers, we identified an innovative non-governmental organisation that links schools and employers around issues to do with employability and youth employment more widely. The work of b-live is explained in Box 6 but, in short, they work closely with large employers in a range of sectors to develop curriculum materials for schools and to offer work
placement opportunities for students of compulsory school age. Employers are typically involved because they want to promote their profession and sector, as well as being driven by concerns about corporate social responsibility. Using b-live as a point of commonality, we contacted 11 major employers who are engaged with this agenda. We focused particularly on employers in sectors that recruit large numbers of young people and, in particular, hospitality, retail, hotels and construction where 8 of the 11 employers are based. Because we know that young people at all levels of the labour market are struggling to find secure pathways into work, we were also keen to include professional organisations, so added in three accountancy and law firms. Finally, we wanted an opportunity to ask a public sector employer about these issues too, so included one fire authority. We interviewed 33 senior managers with responsibility for hiring and training young people (often those with responsibility for developing Apprenticeship programmes) and, where relevant, operational managers. Employing organisations are not named in this report. Clearly, these are not representative of all employers in the UK, but their experiences of some of the barriers to recruiting and managing young people, and in particular of engaging with policy in this area, are striking. And they tell us a great deal about how even the most engaged employers face considerable challenges in providing training for young people. When we put these experiences together with the experiences of young people and careers advisers discussed in the following chapter, we build up a clear picture of some of the areas requiring policy attention.
Employer experiences of hiring young workers Outside the three professional organisations and the public sector, the employers we spoke to were all sufficiently large recruiters of young and unemployed people that they had national-level named account managers at the JobCentre Plus (JCP) to supplement
their usual avenues for recruitment. The employers we spoke to were extremely positive about the work that JCP did to understand their requirements and to target recruitment opportunities. In particular, they were extremely positive about the work that national account managers did in advising them about changes of government policy in this area; for example, the changes with regard to job subsidies as part of the Youth Contract. This highlights an issue that was a persistent theme of the interview: the complexity and constantly changing nature of government policy in this area. The managers with responsibility for developing organisational policies on, for example, recruitment, provision of Apprenticeships etc. all expressed gratitude about the fact that they had an extended network of professionals outside the organisation who helped alert them to and understand the consequences of changing policy. JCP account managers were only one group within these networks, and were regarded as achieving this objective very successfully. This raises an issue that smaller employers may not have this level of support, but where it is available it is welcomed.
to competence-based interviewing in recruitment processes. This is widely seen as best practice in HR and is now standard across many interview situations. But the danger of a competence-based system is that those with less experience (typically younger applicants) have fewer examples to draw on. In a recent Chartered Institute of Personnel and Development (CIPD) study, NestlĂŠ reported that it has moved to strengths-based interviewing for young people for exactly this reason (CIPD 2013). It would be interesting to explore further how these two developments together present particular opportunities and barriers to certain groups of young people in their efforts to access employment.
Overall, the mechanisms by which the employers we spoke to hired young people were similar to the mechanisms for other groups: direct advertising on jobs websites and in other media. However, two issues emerged about general recruitment processes that were raised as potentially impacting on young peopleâ€™s experiences of applying for work. The first is the move towards online application processes. One large retailer who has previously been particularly known for their recruitment of older workers noted that an inadvertent consequence of their decision to move all of their recruitment activity online meant that they were receiving larger numbers of applications from young people. We asked if they felt that this presented barriers to some groups (e.g. both younger and older without regular access to the internet). They agreed that it might and they were currently monitoring the situation. A further issue highlighted previously relates to the widespread move
Employer experiences of managing young workers It is a widely held view that employers find young people difficult to manage in their early transitions into work. Commonly held perceptions include the idea that young people lack work-relevant skills, that they can find it difficult to keep routine hours and that they do not have an appropriate understanding of the workplace. The UKCES (2011) did not find evidence of this. The majority of employers reported that they were happy with the skills and attitudes of the young people they hired. Our findings reflect this. The employers we interviewed were, without exception, extremely positive about the young people that they had recruited onto specific programmes such as Apprenticeships. This is important because it counters a widespread view that employers have negative experiences when they recruit young people. At the same time, however, many did note that young people typically require closer management than their older counterparts. Specific issues that were raised included the need to develop some of the â€œsoftâ€? skills such as co-operating with managers, time keeping, anticipating requests of managers etc. Generally, however, employers did not place any blame for this at the door of young people themselves. Where they did express a view, it was generally seen as inherently part of the process of managing young people of all levels of qualifications, especially when they were recruited directly from education or unemployment. What was noted was that there was very little concerted effort to help line managers in providing additional support to young people as they made their transitions into work for the first time. Overall, the nature and quality of any specific guidance offered to young people varied depending on individual line managers. It was recognised that in the kinds of large organisations involved in this research there could be a role for providing line managers with support in this area, but generally this was seen as part of the overall HR responsibility of line managers.
All the employers to whom we spoke were involved with the b-live Foundation which works with schools and employers to develop studentsâ€™ soft skills and to prepare them for employment. Box 6 explains more about the role of b-live and it is notable that all the employers to whom we spoke regarded it as important for young people to develop work-relevant skills during compulsory education.
Developing Apprenticeship training Given the emphasis in current employment and skills policy on developing Apprenticeship opportunities and targeting them at under-25s, it is unsurprising that all the employers we spoke to outside the professions understood this to be the main approach they were using to provide employment opportunities to young people. All those employers had revised their Apprenticeship provision in the past two to three years, in part because of changing government policy. One way in which provision had changed was to target younger recruits aged 16 and 17, which is discussed in a later section of this chapter. Alongside this, a number of the employers had been engaged in internal debates about whether to continue to recruit workers over the age of 25 onto Apprenticeship training and all had decided to continue to do so. This was, in part, informed by the view that the age of 25 was a rather arbitrary cut-off point and that, for some workers, an Apprenticeship at an older age would be an appropriate development opportunity. But it was also informed by the fact that some of these employers recruit fairly large numbers of women returning to work after a period caring for children. For these workers, they are frequently starting a career for a second time, so blocking an important route into management development and training could be both discriminatory and a waste of talent. In general, it is important to note there has been a clear enthusiasm among the employers we spoke to about the emphasis on Apprenticeship training as a route into employment. It should be noted that we spoke to large employers with rigorous human
resource policies and we did not find evidence of the kind of exploitation of Apprenticeship positions that we know exists in some areas of the labour market (Ofsted 2012a). The programmes we explored are well structured, well designed, delivered by professional training organisations and the progress of apprentices through the programme is systematically monitored. Nonetheless, we know that there have been concerns about the quality of Apprenticeships when we look across the board. The Richard Review of Apprenticeships (2012) highlighted a number of concerns about the consistency of content and provision of training. The Holt Review (Holt 2012) also highlighted challenges to extending Apprenticeship provision to small and medium-sized companies. Criticisms tend to focus on the complexity of accreditation, the risk that the state funds employerspecific training, the low pay of many apprentices and the danger that there may be few job opportunities at the end of the training. There is good evidence of all these issues. In addition, Ofsted (2012a) raises concerns about the consistency of the content of programmes and highlights that there is wide variability in what is provided and expected of an Apprenticeship at a given level. In short, then, the quality of an Apprenticeship and the extent to which it provides young workers with skills and opportunities rest strongly on whether it is provided by a reputable employer. It is certainly the case that there are examples of poor practice, as there are in all areas of the labour market. But what is evident from our research is that where Apprenticeships are well designed and integrated into business-level HR strategies, they can be an extremely positive experience for employers and apprentices alike. Although most of the employers we spoke to do not recognise unions, it is clear that there is overlap here with the case studies identified in the section of this report looking at unions and there is clear scope for unions and employers to work together to ensure that Apprenticeships are well designed and implemented.
Recruiting and managing apprentices Almost all the employers interviewed had some experience of recruiting and managing apprentices, including the professional law and accountancy firms, although it should be noted that Apprenticeships there are currently mainly offered for jobs such as administrative roles. Again, experiences of dealing with apprentices were widely reported to be extremely positive. All the organisations using Apprenticeships had monitoring systems in place and reported high levels of completion and retention. However, this research identified an important issue that has rarely been identified in previous studies of Apprenticeships. Many employers reported that they recruit to existing posts and only once an employee had been in post for a given length of time (typically six months to a year) were they identified as potential applicants to the Apprenticeship training. It is impossible to know from this research how widespread this approach is, but three of the employers interviewed here use it. This is important because there is a widespread view among career advisers and young people themselves that Apprenticeships are advertised openly. While this is clearly the case for some Apprenticeships, it is not the case for all of them, even with large employers. The rationale for this from the perspective of employers was clear. Level 2 Apprenticeships are extremely sought after training opportunities and open competition would lead to a very wide field of applicants that would be difficult to sort. By selecting to offer Apprenticeship opportunities only to existing employees, employers can identify employees with the potential to move on to Level 3 management roles and who have already demonstrated a degree of commitment to the organisation. This almost certainly partly explains the very positive experiences these companies had with their apprentices. One senior HR manager commented that, â€œIt [launching the Apprenticeship programme] has been great. Initially some managers were sceptical and
thought they’d be a whole load of hassle. But they’ve sold themselves. We want to roll it out more now because it’s been so successful.” He went on to note: “Probably part of that is because we know them before they start. That helps us pick the good ones.” All the employers we spoke to expressed a degree of surprise about how sought after Apprenticeship opportunities had been, especially when they had been advertised externally. The National Apprenticeship Service was viewed as providing a very helpful service in advertising Apprenticeship opportunities, although some employers outsourced the liaison role to their partner training provider, so had no direct experience of working with the service. In general, however, when required to sort applicants, they expressed pleasant surprise at the quality and quantity of candidates. One important point should be highlighted here as it was raised by both employers and careers advisers. Level 2 Apprenticeships were reported to be misunderstood by some schools and jobseekers. Specifically, one careers adviser noted: “Sometimes there’s a view that an Apprenticeship is something to do if you’re not very good at school. ‘Ah well, he can go do an Apprenticeship’. But really employers want good GCSEs to get onto a Level 2 Apprenticeship, even though they are Level 2 too. That can be a problem. They want good students” (careers adviser, Tyneside). It is certainly the case in our interviews with young people themselves that this point is misunderstood. A good number of the interviewees had relatively low levels of qualifications and few good GCSEs. Nonetheless, their “dream job” was often a Level 2 Apprenticeship in a sector that interested them. In light of the demand for these roles, especially with larger employers, it seems unlikely that, in practice, this is a route that would easily be open to them. As a result, we suggest that it is important for employers and, where relevant, unions to work to ensure that there are appropriate entry routes for these young people. These can take a variety
of forms that might include Traineeship positions, work experience and other mechanisms for giving young people an opportunity to gain employment and skills prior to Apprenticeship training.
Higher Apprenticeships Driven by the development of funding initiatives to promote higher-level Apprenticeships, we asked the professional organisations about the development of higher Apprenticeships as alternative routes into the respective professions. Interviewees were extremely positive about this as a route and the accounting firms have already been actively developing these alternative routes. These initiatives have largely been driven by a concern that many capable A-level students are being discouraged from applying to universities because of the raising of tuition fees and the fear of debt. In particular, these firms have been keen to emphasise that a higher Apprenticeship can be a risk-free route to a professional career with no obligation to take on debt and a clear route into a good job from the age of around 18. These employers have been keen to develop alternative routes into accountancy that do not require a degree. Interviewees stressed that these routes are as demanding as a degree and the only substantive difference is that the training is extended over a longer period (typically five years rather than three) to accommodate the fact that younger and less experienced employees will need longer to learn the basic principles of accounting that would normally be taught at university. Importantly, the entry requirements are exactly the same as would be required to apply to the type of universities from which these employers have historically recruited. Two issues were particularly striking about these interviews. The first is that these employers have been developing these routes even prior to the introduction of higher Apprenticeships. For them, the allocation of funding is an attractive addition to what was an already established training pathway. The second, and related point, is that the driver for the
development of this route into training has not been the funding offered by government, but relates to the impact of higher education fees and the potential that they might systematically discourage some groups of young people from applying to university. These programmes need to be understood as a response to concerns about the employee profile within the profession over coming decades, rather than as a simple response to government policy to providing some additional funding in this area.
Provision of Apprenticeships to 16and 17-year-olds, Ofsted and the raising of the participation age One of the criticisms about recent experiences of Apprenticeships was the evidence last year (Evans 2013) that in 2011â€“12, 44% of Apprenticeships were taken up by workers over the age of 25. In response to this, and as explained in the section of this report that overviews policy development, funding of Apprenticeship training has been targeted at the under-25s and a new stream of funding has opened up to encourage employers to develop Apprenticeship opportunities for 16- and 17-year-olds. Few of the employers in our research had specifically taken advantage of this, although the retailers did note that they had always recruited 16- and 17-year-olds and this had prompted them to consider the opportunities to accredit training pathways. In the hospitality sector, recruitment of under-18s into licensed establishments presents particular challenges because of the large range of activities under-18s cannot undertake in a licensed environment. However, one of the hospitality employers did report that the change of policy had prompted them to consider what they could offer to under-18s and had decided to extend their recruitment of back-of-house apprentices to that age group. This is an interesting example of how employer behaviour can be influenced by government policy. And it opened up an opportunity to discuss with this employer whether they had been engaged in the
agenda around the raising of the participation age. It was striking that they had not considered this as part of their development of training and experience opportunities for this age group. While it is inherently difficult to extrapolate from a small number of cases, one of the advantages about our approach to the research is that we know that these employers are extremely engaged in issues around youth employment. It is therefore remarkable that there has been such little effort to engage them in issues about the raising of the participation age. A further issue raised by employers who had extended the provision of Apprenticeship training to 16- and 17-year-olds was that, under certain circumstances, this had opened them up to scrutiny from Ofsted. These employers all work with external training organisations to deliver training, including Apprenticeships, and the role of these organisations is discussed further in the following section of this report. Typically, though, the role involves taking the lead on accrediting training programmes and drawing down relevant funding. They also, therefore, take the lead on dealing with Ofsted. Nonetheless, the realisation that training provision might lead to engagement with Ofsted was a shock to the employers involved. This is an interesting area of policy development. Ofsted has published a number of reports in recent years about how employers and training providers can improve the quality of Apprenticeship training and the quality of outcomes for all parties (Ofsted 2012a, 2012b). Their reports are based on extensive research and a deep understanding of the issues involved and they have raised many issues of concern including: the quality of training provision, the management fees charged by training providers, the opportunities available to apprentices at the end of their training, variability in requirements of Apprenticeships at the same level and the emphasis on online learning rather than face-to-face training. It is unclear, however, that there has been a concerted effort to address many of these points of concern in policy making circles.
prompted providers either to join together into consortia or to work with a lead contractor who then sub-contracts some aspects of the training provision. Ofsted explored these sub-contracting arrangements in considerable detail in a report in October 2012 and raised a number of concerns that were echoed in our evidence. Although they found a large number of good arrangements where employers and training providers shared a clear vision and partnership, they also highlighted examples where lead contractors had subcontracted some training provision to organisations that “saw it as a way of generating income for doing little work” (Ofsted 2012b: 1).
Accrediting, funding and delivering Apprenticeship training As noted previously, most of the organisations we interviewed work with partner organisations in the provision, accreditation and funding of training, including Apprenticeship training. One major area of concern for employers is how to identify appropriate partners in this area. Our approach to selecting interviewees meant that we spoke to the lead person with strategic responsibility for training provision in all of the organisations involved in the research. They all reported being inundated by approaches from training organisations seeking to pitch to them as potential partners. A commonly heard complaint related to the fact that most of these organisations had little understanding of the business they were pitching to. Some managers reported that there had been problematic experiences with some providers. In general, there was a widespread view that some kind of accreditation or “kitemark” process was needed in this area as it had become clear that there was considerable variability in the quality, experience and style of providers in this area. This is particularly the case since changes to funding arrangements in 2011 mean that contractors have to have minimum contract levels, which have
They also raised concerns about the management fees charged by lead contractors and highlighted that these were often above the level anticipated by the Skills Funding Agency and it was not always clear what these fees were charged for, with some of the most expensive fees being charged by providers who did not have effective systems of monitoring and support in place. Echoing the points made by the employers interviewed for this research, Ofsted raised a further point of significant concern about the quality of lead contractors. The October 2012 report concluded that: “Data show that too many lead contractors do not have a history of high success rates in their own Apprenticeship provision. Several of the lead contractors interviewed did not have sufficient expertise internally in work-based learning to lead others on monitoring and improving subcontracted provision.” Nonetheless, they noted that there were some very successful examples of provision and these tended to be where contractors and sub-contractors shared a vision of training provision with the employers and used contracting relationships to deliver expertise that was not available either within the employer or in the lead contractor. This was more commonly the experience of the large employers we spoke to for our own study. However, several noted that they had problems with previous contractors and this had prompted them to seek new partnerships. In general,
the view was that the range of organisations providing services in this area was far too complex to navigate easily and, as a result, making decisions about which organisations to work with inevitably required considerable research where answers were not always easily available. This is a further example of an area where the collapse of institutions of regulation in the labour market has caused problems for employers. In principle, an organisation such as a Sector Skills Council could provide this kind of central guidance to employers. SSCs are potentially well placed to have an overview of the skills developments needs of employers in the relevant sector and the training providers who have the capacity and expertise to deliver such training. But it is unlikely that SSCs would have the capacity to take on such a rule as they are currently constituted. What is important here is that we only spoke to very large employers who are engaged in initiatives such as the provision of Apprenticeship training. Even they struggle to establish effective partnership arrangements with appropriate training providers. This raises very serious questions about how a smaller or more reluctant employer might experience these systems and suggests there is considerable scope to make it easier for employers to develop such programmes.
Concluding comments The advantage of our design of this research is that we have spoken to employers who are particularly involved in initiatives to help young people develop work-relevant skills and who have done a lot of work developing routes into employment from education. In other words, these are employers who had demonstrated a significant degree of commitment to providing opportunities to young people. What is striking, therefore, is that even these employers experience considerable barriers and challenges in developing and delivering these opportunities. A frustration of many employers is the complexity of funding and evaluation of Apprenticeships and similar
schemes. The rationale behind this complexity is understandable given that it involves the distribution of considerable amounts of public money. But in practice, it means that even large employers need to work with partners to understand the system, and this could well act as a barrier to wider participation of other employers. As a result, the picture is one of complexity and variation in provision of opportunities to young people. A further complaint of employers is how little they are consulted on changes to policy. There is an assumption that employers will simply respond and adapt as policy changes and develops. In practice, however, this can have the effect of forcing employers to disengage. A clear example of this is the raising of the participation age where the lack of systematic employer involvement may well mean that there are fewer opportunities for young people than might otherwise be the case. A central message of our research with employers is that many of them do want to engage in initiatives to help young people find work, but there are considerable barriers to achieving this.
Policy recommendations ❚❚ Engaging and consulting employers in processes
and consequences of policy change is essential. ❚❚ Work should be done to inform and support employers through the process of introducing new Apprenticeship programmes. This could focus on: helping employers make effective links with training organisations and helping them understand the role of accreditation and inspection requirements. ❚❚ Employers report that they often face other problems in understanding how to support young people into their transitions into work. Particular areas raised with us include understanding wage rates, thinking about how line managers can help manage young people as they make their transitions into work. There seems to be an important role for an agency to provide guidance to them.
❚❚ Employers sometimes screen potential apprentices
by employing young people before offering an Apprenticeship. Trade unions and employers should ensure that there is fair access to Apprenticeships and other employment to effectively safeguard young people from exploitation. Because at least some employers only recruit to Apprenticeship programmes from the existing staff pool, it is important that employers, and where relevant unions, work to ensure that there are appropriate entry routes for young people. These can take a variety of forms and might include Traineeships, work experience and other mechanisms for giving young people an opportunity to gain employment and skills prior to Apprenticeship training. In light of evidence of the significant challenges facing large employers in supporting young people into work, it is clear that these barriers are almost certainly more significant for smaller employers. Support to develop Apprenticeships, to find appropriate training providers and mechanisms to provide a quality-assurance process for organisations involved in the delivery of such programmes would all help all employers and SMEs in particular. Work should be done to ensure that stakeholders are aware of the expectations that young people achieve good GCSE results even when they apply for many Level 2 Apprenticeships. Employers should be urged to consider moving towards strengths-based interviewing rather than competency-based interviewing where appropriate.
6 | Developing work-relevant skills at school: the b-live Foundation
The b-live Foundation is a community interest company that brings together a range of stakeholders – including teachers and employers – to inspire, develop and provide work-related opportunities to young people through an integrated curriculum programme. It currently supports 330,000 young people through 1000 schools. There are several key aspects of the work of the programme: personalised careers information, teaching materials that develop work-relevant skills, work placements during compulsory education, and workshops. All of these help the young people to become employable and work ready. Each intervention is developed in partnership with employers and teachers and is measured through the student’s learning and development, supporting school attainment and the development of a quality and sustainable workforce pipeline for employers.
The employers we spoke to as part of this project all felt that the most important part of this process was an effective mechanism for delivering workrelevant skills education in the classroom. The benefits to them were not only an opportunity to access large numbers of school leavers as potential employees, but to be a key part of each student’s development throughout their education to help increase their employability, influence their future quality workforce and hence potentially reduce future youth unemployment by recruiting a more skilled workforce into initiatives such as Traineeships or Apprenticeships. The programme is now supported by the UKCES via the Employer Ownership Pilot with support from a series of National Employers including: Mitchells and Butlers, Compass, Spirit and Whitbread PLC and secondary schools across England.
The experiences of young people
An important part of this research was to hear the voices of young people themselves. We identified two main groups: those who already had experiences of unemployment and those who were in areas of high unemployment but had not yet made the transition from education. With the first group, we wanted to ask about their experiences and we wanted to capture a range of different young people with different experiences of the labour market. We made contact with 14 young people classified as longterm unemployed, i.e. who had been registered for Jobseekersâ€™ Allowance for 6 months or more. These people were geographically dispersed, although most were based in the West Midlands because we used pre-existing networks to contact them. In addition, our local area (Coventry) has experienced a jump in youth unemployment. Through a local youth centre, we therefore established a link with the support group for those not in education, employment or training. We held a focus group with six people in this group who had also been unemployed for six months or more. A final group of interviewees was a small group of four young activists who have been involved in the Youth Fight for Jobs campaign in the Black Country. They have also experienced unemployment, although one now has a temporary job, one has a place at university and one is currently working on a workexperience placement at Jobcentre Plus. Between them, these young people gave us invaluable insight into experiences of unemployment at different levels of skills and qualifications. At the same time, we wanted to know what young people felt about their moves into the labour market while they were in education. So we set up a focus group at Dudley College to explore with a group of 16 young peopletheir thoughts about the transitions ahead of them. Dudley was chosen because it is an area of high youth unemployment and because we had existing contacts with the college. Again, these discussions provided us with valuable information about who young people talk to about these decisions, what advice they have had, and how they have chosen their paths through education and, hopefully, into employment.
One of the issues that was persistently raised was the feeling that there was a lack of advice and guidance given to young people. We therefore extended our interviews and spoke to 23 careers advice professionals who were very well placed to comment on the changes in provision of careers guidance and how it had affected the young people with whom they work.
Planning labour market transitions It was clear from talking to the young people still in education that they often had strong views about the kind of work that they wanted to do, but that their choices had generally not consciously been guided by input from specialists such as careers advisers. Unsurprisingly, parents had an influence on a lot of young people in both positive and negative ways. So while some reported that they were pursuing particular education choices with encouragement and support from parents, some had actively rejected their parentsâ€™ preferences in order to study what they wanted. It is striking, but unsurprising, that most had not had any one-to-one meetings with careers advisers during their time at school. Interestingly, lecturers and teachers were also reported as rarely raising issues of future career opportunities. Of course, we cannot know whether this is actually the case, but it was certainly the perception of these young people that the role of their teachers and lecturers was to provide help with regard to the curriculum and that they would not expect educators to take on a guidance role. This left them, however, with few avenues for exploring post-education work opportunities. Dudley College itself does offer strong support around planning future employment, education and training and this was noted to be very different from the experiences of guidance at school. One aspect of the discussion was an assumption that students would seek work in the specialism for which they were training. Almost no one talked about being prepared to work in other areas in order to build skills. Indeed, the opposite. Overall, their view was that their college training can and
should provide the necessary training needed to work in their chosen area. One participant training to be a childcare specialist noted: “Why should I do something different. I’m training for childcare!” This is notably different from the views of employers and careers advisers who tended to emphasise the need to be flexible about career choices and pathways in the contemporary labour market. Clearly there is some degree of mismatch between the expectations of young people themselves and the labour markets into which they are graduating. This was also echoed by the young people who had experienced unemployment. Even after an extended period of not finding work in their chosen areas of interest, few were actively exploring alternatives. One young man had tried and failed to find work in information technology and had instead decided to enrol at university rather than continuing his job search. When asked about whether his experiences had made him consider alternative options, he was quite shocked by the question. “No, why? I want to be a [computer] games designer. So I’m going to do that [at university].” A further issue that emerged with regard to planning future careers and finding work was how limited the sources of advice were, not only in relation to professional guidance but beyond. Many of the young people we spoke to had not discussed their choices with family members, mainly because they felt that they had little information to add. As a result, it was clear that the choices made by these young people were generally not particularly well informed and certainly did not include much consideration of the likelihood of finding work in the chosen area. Childcare was a good example here as one of our interviewees was, at 24, significantly older than the others in the group who were mainly teenagers. The older participant had children of her own and motherhood had interrupted her original career plans. After having her own children, she had become interested in childcare, but had realised that there
were relatively few employment opportunities in her area. As a direct result of realising this, she had decided to train as a lecturer in childcare rather than as a childcare provider herself. Part of this choice was informed by the fact that she felt there were more job opportunities in teaching and lecturing and the skills she would learn training to be a lecturer would be more transferable, offering her greater employment opportunities. Others in the group were noticeably taken aback by her assertion that she had found it difficult to find work as a childcare provider in the local area and it prompted a discussion about whether they had done any work to establish demand for these skills either before choosing the course or while at college. The general answer was that they had not. This illustrates the challenges of providing advice and guidance to young people to inform their choices of education, training and careers. A further notable issue about choices of careers and training was the gendered nature of the decisions made by young people. Without exception those on the childcare programme were all young women, while those that we interviewed on the programmes for mechanics and IT specialisms were all young men. We did not address this specifically with the young people themselves but it was raised in interviews with careers advisers. By and large, careers guidance professionals regarded this as an inherent aspect of the socialisation of young people and their career preferences. Some of them explicitly noted that where they felt there was scope to push a young person to consider roles that were outside the usual gender roles, they did, but that usually there was little opportunity to challenge the young people they work with on this matter. This is important because there remain considerable pay differentials between many historically maledominated jobs and those that are traditionally female-dominated. We also know that early choices and preferences matter in labour market outcomes, including pay levels and pay differences.
Choosing to stay in education Four of the young people in education and training to whom we spoke in our focus groups had made active decisions to try to secure access to university and one had already been offered a place. For them, the decision had largely been driven by a desire to gain an advantage in the labour market and it is important to note that we were not interviewing A-level students, so these were students who had already chosen a more vocational route through their earlier education. It is probably therefore unsurprising that the four students had all chosen to apply for highly vocational courses within higher education and had done so because they wanted to increase their chances of finding work in those specific roles. By and large, these were extensions of the courses they had already been doing and were mainly in the field of business and management. Comments made by these students indicated that they were very aware that these courses offered generic and transferable skills. One noted: “I chose it [the business degree] because I’m already doing it [business subjects] and I think it will help me get a job. I can work anywhere with that.” This comment was supported by the others. This provided an opportunity to talk to these young people in education and training about their views of
fees for higher education. In general, this was not as high a priority in their decision making as we might have anticipated. The ones who had decided to apply to university were aware of the loan arrangements in some detail and knew a fair amount about when and under what conditions they would start to repay any money they borrowed. None of them was in a position for their parents to contribute to their fees or living expenses, so all of them understood that they would be taking on significant and long-term debt. However, they saw it as an investment in a plan to move beyond their local environment while building skills that they hoped would mean it was easier to find work. “It’s my future, isn’t it? I’m not going to pay back the money straight away. And if I don’t get a job, I don’t start paying. So that’s fair enough.” Others, though, did talk about the fact that taking on debt was part of their consideration of whether or not to apply to university. A further concern was the proposed introduction of further education tuition fees in late 2013. This change means that anyone aged 24 or over, and anyone who wants to study at Level 3 and above, will no longer have access to free courses. For anyone in these categories there will be a loan system called the 24+ Advanced Learning Loans. Although most of the participants in the focus groups were much younger than 24, they were aware of these changes and regarded them as an incentive to try to complete their education and training before they were 24. Two of the slightly older participants, one in their early 20s and one a little older and both mothers, noted that this could be a real disincentive for women to return to education and training. They noted that one of the most common reasons for slightly older people to return to college was because earlier education and training had been interrupted by parenthood. They clearly understood this to be a gendered issue and argued that it was likely to have a disproportionate impact on young women. Obviously, the effects of the introduction of this policy will have to be evaluated by the government departments responsible, but this is a serious issue and one that will have to be monitored.
Experiences of unemployment
We asked all the young people about their experiences of work both while they were still in education and since they had been unemployed. All of them remembered their work experience while they were at school, although they had varying recollections of how useful it had been. What was more important was work experience they had sought out themselves, both paid and unpaid. Most of our interviewees had sought some form of work experience either by securing a paid part-time job or by working for family members, sometimes on an unpaid basis (although none had any experience of unpaid work for an organisation of the kind that might be described as an internship). None of the unemployed young people had been required to undertake mandatory work experience as a requirement to continue payment of their Jobseekers’ Allowance.
All the young people who had left education that we spoke to for this project had some experience of unemployment and their voices are particularly informative in understanding the pressures within the labour market. As emphasised previously, the reasons why young people are finding it harder to find jobs are complex and intersecting, and this is evident in the stories of the young people we interviewed.
In general, they reported to us that they found these experiences very helpful and were acutely aware that they were developing the skills that future employers would require, although they were often quite vague about what those skills were. They were very positive about these experiences even where they had concluded that they did not wish to pursue a career in that area. Although some had found the work they did hard or unrewarding, they were generally grateful for an opportunity to find out more about the world of work and to gain some experience. Some had actively tried to gain work experience in the career they had decided to pursue, but generally they reported that this was quite difficult and had led them to understand how important it was to gain relevant qualifications. However, few had any experience of structured training programmes to develop their skills and this is a clear area where there is scope for employers and unions to improve work experience. It is evident that there is considerable opportunity to help young people develop work-relevant skills in a structured way and to help them recognise the skills they have gained through undertaking work experience.
1) Living arrangements Only one of our interviewees was living independently and he had been doing so for some time as a result of a family breakdown. Almost all the rest were living with one or both of their parents, including the interviewees who were parents themselves. Most spoke very positively about the patience and support they had received from their parents and, generally, little had changed since they had been at school. They were resigned to this. Some expressed a hope of moving out of the family home in the near future, but all recognised that this would require a job and until that was secured, it would be impossible to consider moving. Two interviewees expressed frustration at this and one commented: “I’d love to move out. But I can’t see how that’s going to happen. Even when I get a job, it’s going to be hard to pay rent.”
2) Geographic location Living with parents introduced a major issue related to their geographic location in that it meant they had little choice about the area on which they focused their job search activity. Jobcentre Plus expects people to be willing to travel for up to 90 minutes to a job, although it does not specify what kind of transport might reasonably be expected. In practice, advisers have considerable discretion as to how to interpret that rule and there were examples of variable practice. One young jobseeker was expected to travel from a suburban location in Birmingham to a suburban location in Coventry when she was offered seven weeks of work as a call centre operative. She was willing to do that but noted that it required taking a
bus to Birmingham station, then a train, then a bus to the workplace at a cost of nearly £10 per day. Not only did this require the full 90 minutes – and sometimes longer – but it also ate into her take-home wages.
state of the current labour market, there is scope to help young people present the skills that they have obtained in non-work settings as the kinds of skills that employers are frequently seeking.
Other young people reported serious limitations presented by the absence of public transport in more rural areas. One who lived in a village near Rugby commented that he was dependent on his father for lifts to job interviews and would be dependent on other family members if he was successful in finding work. However, even in urban locations transport was often a limitation, particularly when work was not offered during standard working time.
Often Jobcentre Plus advisers recommended or required that our interviewees attended CV advice training. Generally, where they attended those sessions they were reasonably positive about them. However, a persistent issue was related to the fact that the advice was fairly generic rather than specifically tailored to them and their own CVs. Mentors, by contrast, worked individually with young people to establish what skills they had and to decide how to present that appropriately. The interviewees who were in a position to compare the two commented much more positively on the mentoring than the generic training. “It was just about me. And she [the mentor] asked me about what I do in my spare time. She spotted things [skills] I didn’t know I had. I was surprised!”
3) Difficulty getting interviews Many of the younger unemployed people we spoke to had not been successful in securing any work experience or any interview since becoming unemployed. This was not because of a lack of effort on their part, although it is, of course, possible that their job-search approach was not always appropriately focused. Typically, however, they do not even receive an acknowledgement of receipt of the application, let alone confirmation that they have not been shortlisted and any explanation as to why. This lack of feedback is hugely frustrating to the interviewees at all levels of skills and qualifications and was persistently identified as one of the most disheartening things about being unemployed. One noted: “I know that I’ve not got much experience. But when you don’t hear anything back, what am I supposed to think? It’s pointless.” Interestingly, one of the points made by the Steps Ahead mentors (see Box 7) was that very often the young people they worked with were not always presenting their skills and experience in an appropriate manner. One of the most common and basic practical interventions made by the mentors was to restructure the CV of the applicant so that it emphasised their skills. This suggests that although there are challenges with the idea of simply trying to increase the employability of young people given the
4) The kinds of jobs on offer If young people are able to overcome the limitations of having relatively little experience on their CV and they are able to secure an interview, one persistent complaint of interviewees was that many of the jobs advertised on job websites are not quite what they seem. Commission-based jobs are common, and it is also not uncommon to find yourself applying to an agency rather than for what appeared to be an application directly for the job itself. In response to hearing many stories about jobs that turned out to be not quite what they initially presented themselves as being, we specifically asked interviewees whether they had experiences like this. Two interviewees had taken commission-based jobs after a previous period of unemployment and both commented on them very negatively. One had been trying to get subscriptions to a magazine company and the other had worked going door-to-door trying to get people to sign a direct debit for a charity. Both involved knocking on the doors of people’s homes, so involved working mainly in the evening. In both cases,
a job agency. This was not regarded as inherently problematic and many of the interviewees said that they were registered with agencies. The problem was the sense of deception and the fact that being invited to an interview at an agency was very different from being invited to an interview directly with an employer. The biggest problem was that the agencies cannot guarantee work and many keep these jobseekers on their books for extended periods of time without offering any work.
5) Competency-based interviewing
they talked about the promises that had been made about salaries being unrealistic. They quickly realised that the income would be extremely variable because, as one of them put it, “You need to get 10 people a day [to sign up]. But you might knock on 100 doors one day and get no one. And then the next day you get 10 pretty easily. But to get more you have to work long hours. And no one wants to answer the door after a certain time. So it’s really limited what you can do.” In both cases, the interviewees had decided that it was very difficult to achieve a reliable income doing this kind of work and had left to seek other employment. It was also reported to us that these kinds of jobs were sometimes offered as a form of bogus selfemployment where they had to sign contracts as self-employed workers rather than directly employed workers. It is, clearly, impossible to know how widespread this practice is, but it is important to understand that there seems to be evidence that some employers are targeting young people for these kinds of jobs. Agency jobs were also a bugbear of many interviewees because that was often not made clear in the application process. Almost all our interviewees talked about applying for jobs that appeared to be direct applications to the company involved, only to realise later that they had made an application to
Although this was a point raised by employers rather than young people themselves, it is important to introduce here as it relates to the final stage of job searching: the interview. As discussed in the section looking at employers’ experiences, one of the senior HR managers noted that, in her experience, young people tend to do less well in competency-based interviews than people with more experience. In part, she argued, this was simply a function of the fact that young people tend to have fewer life experiences from which to draw examples of particular skills. Once this issue had been raised, we explored it with mentors and young people we interviewed. It is clear that there are some issues about how jobseekers present themselves on their CVs and in interviews that do suggest that at least some are not aware of the move towards competency-based recruitment. Indeed, this seems to be a factor that helps explain what is happening when young people are rejected for having too little experience. It may well be that part of the challenge is understanding how to present the experience they do have in a way that is appropriate for this form of recruitment and selection. It seems unlikely that the move to competency-based interviewing will wane in the near future and it has many advantages in selecting the candidates with appropriate skills for roles. What is clear, though, is that there is a role for those working with, mentoring and advising young people to help them identify the skills and competencies they have and to present them appropriately in their job search.
This highlights a broader issue relating to the availability and quality of information, advice and guidance to young people both as they prepare to enter the labour market and if they find themselves unemployed. It is evident that recent changes in the provision of careers services have caused reductions in the amount of guidance available to many young people at all stages of their decision-making about work, and it is to this that we now turn our attention.
Information, advice and guidance available to young people Job matching refers to mechanisms for guiding and advising both (prospective) employees and (prospective) employers. Here, it mainly refers to information, advice and guidance (IAG) services offered to young people during their education and if they find themselves in periods of unemployment. For this research, we interviewed 23 IAG specialists in a range of different roles in order to understand better how their work helps young people and employers make decisions. We also asked the young people themselves about their experiences of IAG services in compulsory education, in post-compulsory education (where appropriate) and since they had been unemployed. The overall picture is extremely worrying with large, and growing, gaps in provision.
Devolving careers services to schools The policy context with regard to the provision of IAG services has changed since the election of the government in 2010. Prior to that, IAG was mainly offered through the Connexions service. Connexions was a government-funded service offering advice and support to 13- to 19-year-olds about a wide range of issues affecting them, including but not limited to careers support. In 2010, it was announced that the responsibility for the careers guidance aspects of Connexions would be devolved to individual schools. Schools have a statutory requirement to provide access to advice, but are free to choose how they provide it. Funding to support the provision of IAG
services at school level is not ring-fenced and schools are free to decide the level of support they buy in. Some of the weaknesses of these reforms have already been highlighted in policy circles. In January 2013, the Education Select Committee published a very critical report highlighting the decline of provision of IAG services and the fact that many schools have opted to reduce the provision, in many cases dramatically. As a result, provision of IAG is extremely patchy. The careers advisers we interviewed all emphasised what they felt to be the catastrophic effects of these changes on young people and were particularly concerned about the amount of guidance offered to them. One important resource that was intended to provide support for schools and young people is the National Careers Service website. This gives a great deal of information about different careers, training opportunities and routes through education and qualifications. However, it does not – and cannot – provide the face-to-face individual support and guidance for young people. It is the reduction of this provision that most concerned our interviewees. Further, the move to provide these services in schools raised the serious challenge that when young people leave education, the responsibility for provision of guidance shifts to the local authority. Local authorities have responsibility for providing support to young people who are particularly vulnerable including those not in education, employment or training. But the devolution of provision means that it is more difficult to keep reliable records on the status of individual young people, meaning that it can be difficult to make contact with them to ensure that they are receiving the support they require. The problematic aspects of these policy developments raised by the Education Select Committee were strongly echoed in our interviews. One typical comment was that: “This isn’t about me and my job. I don’t mind whether I work for the authority, for Connexions or for a third sector organisation. What I care about is that the kids aren’t getting the
support they used to... it’s fallen apart” (careers adviser, Cumbria). Another commented that: “It’s not the schools’ fault. They have too much to juggle and it slips through the net... But they haven’t realised that the website [the National Careers’ Service] isn’t enough. Especially for the difficult ones” (careers adviser, Merseyside).
generic (e.g. hospitality, warehouse work, office work) and are then agreed between the adviser and the jobseeker. Several interviewees explained that in these initial interviews they had been informed that their selection of jobs was not sufficiently wide and had been encouraged to agree the inclusion of several additional sectors and kinds of jobs.
These experiences were also echoed in the interviews with young people. We specifically probed them about what had informed their decisions about education and job searches, including asking them about any careers guidance they had and who they had discussed their decision making with. Very few of them could explicitly remember any individual careers guidance, although some of them did discuss sessions they had as part of a group while at school or college. Unsurprisingly given the more extensive nature of careers guidance within further and higher education, those who had continued their education had accessed a greater range of IAG and had more input from IAG professionals into their choices. It is clear, then, that there could be considerable scope to improve the provision of IAG services during education. However, it is clear that there is also a gap in provision when people find themselves in unemployment and it is to this that we now turn.
The role of Jobcentre Plus in job matching
The agreement reached in these initial interviews is important because this is the expectation by which jobseekers’ activities are then monitored and target sectors can be reviewed later at the discretion of advisers. Several of the more highly qualified jobseekers explained that while their advisers had initially been happy to agree a relatively narrow set of jobs and occupations to target, the pressure to apply for less qualification-relevant work had increased significantly the longer the applicant was unemployed. This is explicitly part of the approach to encourage jobseekers to widen their job search criteria if initial efforts to find work in their chosen area have not been successful. However, it is often difficult for highly qualified jobseekers to accept this approach, especially now that they have often invested their own money in gaining qualifications. It is evident that although there can be situations in which jobseekers can be encouraged to think more widely about how their skills and qualifications can be used, this requires a degree of mentoring which is not frequently available through Jobcentre Plus.
Another potential source of job matching advice and guidance could be Jobcentre Plus. However, it was clear in interviews with young unemployed people that those services were only provided at a basic level and that the experiences of the service users were quite variable. All the young people we spoke to explained that they felt the role of Jobcentre Plus advisers was not to give guidance, but to monitor the job application activities in order to establish that the claimants of Jobseekers’ Allowance were actively seeking employment. Typically, in the initial interview with Jobcentre Plus, staff jobseekers have to identify three or four areas of prospective employment where they will target their job search. These are often very
It is notable, for example, that our interviewees reported that after the first interview with their advisers, many of the subsequent interactions relied on reporting their job search activity. Occasionally there are efforts to review either the target job areas, or to suggest additional training that may be of help, but the experiences of our interviewees was that there was little prompting to reflect on what had gone well or what had gone less well in these processes. For example, many of our younger interviewees reported that they had failed to secure any interviews in the six to eight months that they had been unemployed. When asked whether advisers were keen to talk to them about, for example, how they presented
themselves in applications, they reported that this was not something they had come across. For those who had secured an interview or interviews, there was little encouragement to reflect on what they might have done better. Jobcentre Plus advisers also have discretion to recommend particular training opportunities to some jobseekers. There seemed to be relatively little consistency with regard to what kind of training was offered and how appropriate it was to the skills and experiences of the jobseekers. The reasons for this are clear. The primary role of Jobcentre Plus advisers is to identify areas for possible job applications and to monitor the process of job seeking. Where necessary, they refer jobseekers to courses to improve their job seeking through, for example, developing their CVs or interview skills. But individual meetings with claimants are short and there is little time to provide mentoring and coaching. As a result, the outcome was that many of our interviewees felt that there was nothing that could be done to help them. Because of our approach of selecting interviewees, 14 of our interviewees are also enrolled on an initiative launched by the CIPD which provides mentoring by Human Resource professionals to young people who have been unemployed for six months or more. The scheme is outlined in Box 7. The Steps Ahead programme illustrates how a coaching approach to helping young unemployed people can, at very least, boost their morale and re-energise their job search activities. Although no evaluation-level data is publically available, the fact that the young people who were part of that programme all spoke positively about the experience suggests that there are qualitative effects at the least and illustrate the importance of effective job matching processes. It is therefore noteworthy that the provision of this kind of guidance is through an organisation such as the CIPD where their members volunteer for this activity. Although there are certainly opportunities for other organisations to provide similar kinds of support, there is also a clear role for the state to intervene as well. Improving advice, guidance and
support to young unemployed people must surely be a key focus of future policy.
Concluding comments Speaking to young people about their decisions and experiences relating to work, qualifications and job searching was an important part of this research. It gives us a strong sense of how frustrating the process of seeking work is and how difficult it is to improve the jobs search process in the absence of feedback on applications. The young people we spoke to all expressed a clear understanding that education and qualifications were important to improving their chances of securing whatever kind of work they were looking for. And generally they were keen to stay in education and/or training as long as they could. But there was little sense that the decisions they were making were informed by an understanding of how jobs and the economy more widely have changed in recent years. In other words, there was little evidence of any concerted effort at job matching either as young people made choices about education and training or when they found themselves unemployed. When they find themselves unemployed, young people face frustrating experiences with seeking work. These include a lack of openings advertised in the local labour markets, a lack of feedback on applications, jobs being advertised that are not all they seem and geographic limitations such as a lack of access to transport.
Policy recommendations ❚❚ With more and more jobs only advertised online, it
is essential that disadvantaged young people have public points of access to the internet. ❚❚ Attention needs to be paid to how employers are advertising and presenting jobs. Commissionbased jobs frequently involve targets that are extremely difficult to achieve. Bogus selfemployment is a concern for some young workers and it is not always clear when jobs are advertised through an agency.
❚❚ Lack of access to public transport is a serious
constraint for many young people in the job searches. Travel assistance schemes should be implemented which smooth the transition into work by helping young people with transport costs. The Mayor of London recently introduced a scheme for London Apprentices (London Assembly 2013). More work could be done to provide advice and mentoring for young people to identify their skills and competencies in order that they can then present themselves effectively in contemporary recruitment and selection processes. Careers advisers used to do link work between employers and young people, partly to find job opportunities and also to promote the interests of young people themselves. No one does this any more and there is a clear need for this kind of provision to improve job-matching. Provision of IAG during schooling is now very patchy and is a serious problem for the future. More work needs to be done to ensure advice and guidance are provided to young people on a one-on-one basis. A coaching and mentoring approach, similar to that provided on the Steps Ahead programme might be more appropriate for supporting young unemployed people in their job search. Greater attention needs to be paid to explaining different routes to young people even if they seem to be on track for an academic route. This is particularly important in the context of HE fees as there is a danger of regretting picking less vocational degree routes that do not provide clear opportunities for employment. Obviously, not all students will choose a more vocational route, but the implications of early decisions need to be explained to young people and their parents. There are opportunities for employers and unions to develop structured work experience programmes and to help young people identify the skills they have developed during work experience.
❚❚ There is scope to develop mentoring schemes
similar to the Steps Ahead initiative co-ordinated by the CIPD to build on the work undertaken by Jobcentre Plus advisers. ❚❚ Jobcentre Plus advisers might find less resistance to discussions about widening and re-focusing job searches if those conversations were undertaken in a mentoring relationship rather than with a threat of punishment.
7 | The Chartered Institute for Personnel and Development (CIPD) Steps Ahead mentoring scheme
One example of innovation that we identified was the CIPDâ€™s Steps Ahead mentoring system. It started as a regional initiative in the West Midlands and has been rolled out this year. In brief, members of the CIPD are invited to act as mentors to long-term unemployed young people in their area. The CIPD represents human resource professionals so all mentors have some experience in HR. Mentees are recruited through Jobcentre Plus either because an adviser has recommended making contact with the project or because the young person has found a leaflet in their local job centre. Registered mentors do not receive any specific training, but they are given advice by the CIPD about how they might run the sessions. A regional list of prospective mentees is distributed to registered mentors approximately every week and mentors then identify particular mentees they might like to work with. At that point they only have information about age, gender, level of qualification, sector where the mentee is seeking work and geographic location. Because of the network of mentors in the West Midlands, we were able to speak to 14 young people who were either being mentored or who had recently been mentored. The results are striking. Although some mentors talked about the challenges they had faced in getting mentees to respond to their contact emails, most reported extremely positive experiences. And the young people themselves talked about their own experiences as being transformative. Two aspects in particular were discussed as being particularly different from other forms of advice and guidance. The first was the coaching and mentoring approach adopted by mentors. In other words, the emphasis on reflecting on what had gone well and less well in previous job search activities, as well as reflecting on the individual strengths and weaknesses of the mentees. The mentees all expressed gratitude to the mentors for providing insight not just into the process of applying for jobs, but also in reflecting on what might be more or less appropriate for the individual at that moment in
time. It was evident that this was often the first time these young people had been encouraged to think in this way and that it had provided even the least confident of them with insight into what they were seeking and how they might achieve it. A second aspect of the programme that was universally reported as being innovative and helpful was the idea of job matching. Mentors were very keen to help mentees think about what kinds of jobs they might be seeking and how to get into those positions. A good example was of a law graduate who was struggling to find work as a trainee barrister. The mentor discussed alternative careers that might be suitable for someone trained in law that would allow them to use their skills and interest in the law while broadening their horizons about the kind of work available. This is an important role because it quickly became clear talking to mentees that they had not previously been offered this kind of guidance. So, for example, the law graduate had previously worked on an assumption that relevant careers were all in the field of law rather than thinking more broadly about roles involving legal knowledge and expertise but which were not working as a lawyer. Many mentors reported that they kept in touch with their mentees beyond the initial six-week intervention and that many had found work experience and/or jobs as a direct result of the programme. Sometimes this had been through the networks provided by the mentor and sometimes it had been because of a slight change of focus as a result of the intervention. Overall, what was particularly impressive was the extremely positive ratings given by interviewees. Mentors reported very positively about feeling that they could do something small to alleviate the problems of youth unemployment in their area. Meanwhile, young people themselves often spontaneously contrasted the approach of Jobcentre Plus with the personcentred mentoring they received on the Steps Ahead programme.
Opportunities to include youth employment provisions in procurement agreements Recent successful initiatives to promote the efforts to implement Living Wage clauses in public sector procurement have reignited interest among trade unions and other campaigning organisations to place responsibilities on organisations through the contracting process. The idea has also secured wider cross-party political support. It is therefore appropriate to explore the opportunities for extending the possible use of “social clauses” in procurement activity to cover youth employment opportunities. Such clauses are widely used around the European Union (Schulten et al. 2012) and do sometimes include provisions relating to youth employment such as the development of Apprenticeship opportunities, opportunities for unemployed workers and provision of training. Any discussion of procurement activities will, inevitably, tend to focus on the public sector because this is where there is the greatest degree of regulation and visibility. It is also relevant that the comparative strength and influence of trade unions is higher in the public sector. However, it is not the intention of this section only to focus on the public sector. It is more than possible for recognised trade unions to make efforts to expand their influence where they are already established negotiating partners.
Legal position The use of social clauses is not always legally clear. Burgess (2012: 101) argues that the legal position of social clauses is “complex and not always transparent” and he notes the legally informed policy recommendation recently given to a local authority seeking to include Living Wage provisions in a contracting process as being judged to present “significant legal risk” to the authority. However, the nature of UK law and the general preference for avoiding legal instruments to require compliance with employment issues means that this will always be a grey area and that there will always be variation in interpretation. As such, there are examples where other local authorities have included similar provisions including the Greater London Authority’s use of Living Wage clauses. In general, the examples below
developed in particular contexts where the lead organisations were particularly keen to include such provisions either for political or reputational reasons which strongly indicates that, where there is a will to adopt such measures, it is possible to find ways to enact them.
The use of social clauses in procurement Despite these legal complexities, it is well established in other areas of the European Union that such clauses can be included in procurement agreements (Schulten et al. 2012). A 2010 document published by the European Union listed a wide range of possible requirements for what they termed “socially responsible public procurement” in EU member states which included 21 potential areas of activity under six different headings. Immediately, it is clear that there is a range of competing priorities in this area and this introduces a note of caution. The current attention being paid to securing improvements in terms and conditions of employment through procurement activity means that unions need to decide their priorities in this area. While this report has presented many strong arguments about why youth employment should be a top priority, there will always be competing interests in this area. A recent overview of the use of this kind of social clauses in the UK (Burgess 2012) finds relatively little evidence of their use to promote youth employment. After pay, the most common areas addressed were 1) community benefits, 2) core labour standards of the International Labour Organisation, 3) provision to ensure equality for workers who may be discriminated against on the basis of disability, race or gender, 4) employment, skills and training, 5) the use of Fair Trade products and 6) clauses to open contracting opportunities to small and medium sized enterprises. While it is possible that clauses concerning training opportunities may well favour young workers, there is no reference to them being included as a specific category.
Equality duties in the public sector
The processes involved in the use of social clauses are also relevant here. A procuring authority can consider the performance of an employer on these issues only where bids are otherwise equal. In other words, a tender has to be equal on the commercial aspects of the contracting process before social aspects are an influence in the decision making. Nonetheless, the National Apprenticeship Service has developed a number of case studies showing that it is possible to use social clauses to encourage policies to help young workers. One particularly relevant example relates to South Tyneside Metropolitan Council, demonstrating how such an approach might work in practice. The local authority uses social clauses to help provide work opportunities for young people in one of the regions most affected by youth unemployment. The clauses require contractors to provide work placements, taster opportunities and Apprenticeships for young people not in employment, education or training. The local authority employs a specialist co-ordinator who is consulted during new procurement processes to explore ways in which social clauses can be integrated into the contracting process. A particular success has been in construction and manufacturing providers, and in 2010 more than 100 young people had been recruited onto these initiatives.
A further issue for consideration with regard to public sector procurement is the requirement of the Equality Act 2010 of an ‘equality duty’ in the provision of public services. Age, including youth, is what is known as a “protected characteristic” and the obligations of the Act require public authorities to eliminate unlawful discrimination, advance the equality of opportunity between people who share a protected characteristic and those who do not, and to foster good relations between the two. Where a public authority contracts out a service, it retains the responsibility to ensure that these obligations continue to be met and the method of evaluating this can be set out in the contracting process. It should be noted that the enforcement of the Equality Act 2010 lies with the Equality and Human Rights Commission, so some work would need to be undertaken to establish their views on enforcement activities. Nonetheless, this potentially opens up space for trade unions to work with the Equality and Human Rights Commission to explore ways in which public authorities might be encouraged to ensure that the outcomes of contracting processes do not disadvantage employment opportunities for young people.
Opportunities in the private sector Opportunities for trade unions to influence employer behaviour through procurement activities are clearly more extensive in the public sector where such activities are more regulated, but there is growing interest among trade unions in exploring the opportunity to gain benefits for workers throughout supply chains which could, in principle, open up similar prospects in the private sector. An example given by Wright and Brown (2012) is the approach of the construction union, UCATT. The high use of sub-contracting in construction means that there is constant pressure on collective agreements and it is difficult to enforce labour standards in small contracting firms. These arrangements can also lead
to managerial challenges that require a considerable amount of input from site managers. UCATT helps address this by persuading managing contactors to take on full-time union convenors whose role includes enforcing health and safety standards, resolving grievances etc. A further feature of UCATT’s strategy is to try to negotiate project-level framework agreements to regulate labour standards in sub-contracting firms. Wright and Brown (2012) emphasise that this strategy has had some degree of success by drawing on the potential for reputational damage for the managing contracting firm if there are safety or employment problems during the project. It is clear from this example that there are unions that have had to think innovatively about representing workers throughout supply chains in the private sector. It is not impossible, therefore, to imagine that there may be scope to include issues of youth employment in the kind of framework agreements highlighted above.
❚❚ Where they are recognised, trade unions should
learn from the Living Wage campaigns to explore opportunities to influence procurement processes and campaign for the introduction and monitoring of social clauses providing youth employment and training opportunities. ❚❚ There does not at present seem to be any clear reason why such clauses would not be lawful, although this may require further legal guidance. ❚❚ Trade unions and other interested actors should consider exploring the opportunities presented by the equality duty in the Equalities Act 2010 with regard to young people’s employment and training opportunities.
Concluding comments It is evident that EU regulation on procurement does not outlaw the use of social clauses and they are widely used in many other member states. Despite some of the concerns raised in the literature and by participants in this study, there are very good reasons to look at using social clauses in procurement processes to promote youth employment and training opportunities. Along with low wages, youth unemployment is one of the most serious issues facing the UK labour market at the moment, and this is a strong argument for prioritising these in negotiations.
Policy recommendations ❚❚ There is scope for both public sector and private
sector employers to consider developing procurement policies that place responsibility on managing contractors to include social clauses on youth employment. The examples highlighted suggest that where there is a will to introduce such clauses, they can be highly effective.
The scope to improve entrepreneurial activity among young people This chapter summarises evidence relating to the potential role of entrepreneurship as a response to youth unemployment, encouraging young people to set up their own innovative businesses when other job opportunities are limited. Blanchflower and Oswald (2007) summarise why entrepreneurship is often seen as a potential route to reduce youth unemployment: ❚❚ Through innovation, entrepreneurship can create ❚❚
new jobs for young people. There may be a further positive effect if other young people are able to gain employment with successful entrepreneurial firms. Young entrepreneurs may be particularly responsive to new trends and fashions, and therefore see new opportunities. These innovative new products and services bring efficiency and also bring gains to consumers. Entrepreneurship can increase young people’s confidence, self-reliance and well-being.
However, despite continued interest in the role of entrepreneurship in creating opportunities for young people, there is little evidence to demonstrate the validity of the claims summarised above. This chapter first investigates what is meant by the term entrepreneurship, and the differences between real innovative entrepreneurship and the often more replicative option of self-employment. Motivations for entrepreneurship are then examined, analysing what groups of people are more likely to become entrepreneurs, why they wish to become entrepreneurs, and where they are located. There is then an investigation into current policies designed to increase the level of entrepreneurial activity. Outcomes for young entrepreneurs are then investigated, both in financial and non-financial terms, and the influences of policy interventions on these outcomes are examined. Two key issues – those of self-efficacy and self-employment as necessity – are discussed. The chapter concludes that while entrepreneurship may provide an alternative form of employment for some, young people should not be forced into self-employment or
entrepreneurship out of necessity because of limited other employment opportunities. Before investigating the potential scope for entrepreneurship to reduce youth unemployment, it is important first to understand what this term means, and in particular how it differs from self-employment. Entrepreneurship is not a new concept, stretching back to the work of Richard Cantillon and Jean-Baptiste Say, with further clarification from Schumpeter and Knight in the 1920s, who suggested that entrepreneurs are individuals who bring innovation to the marketplace, and who also bear the risk of uncertainty. Importantly, Baumol (2011) notes a distinction between “innovative” and “replicative” entrepreneurs. While the former bring truly new ideas and products to the market place, the latter group instead replicate existing ideas, perhaps to serve a different market, or to serve increased demand. A further key distinction to make is that entrepreneurship, a process of opportunity recognition, is not the same as self-employment, a labour market status which often replicates existing businesses rather than bringing innovative ideas. When investigating research into entrepreneurship, Faggio and Silva (2012) note that much research into entrepreneurship actually investigates the self-employed, who may be replicating existing businesses rather than creating truly entrepreneurial new companies, or may be reported as selfemployed when they are freelancers or partners in professional practices.
Motivations for entrepreneurship Who is an entrepreneur? As noted above, when investigating entrepreneurship, it is important that many of the figures report selfemployment, which may not be truly innovative entrepreneurship. Approximately 12–13% of people in the UK were classified as self-employed throughout the late 1990s and 2000s (Faggio and Silva 2012), while the Global Entrepreneurship Monitor reports total early-stage entrepreneurial activity to be around
6% in the UK from 2002 to 2010. Data released by the Office for National Statistics in February 2013 showed that the number of workers who are self-employed in their main job had risen by 367,000 since the start of the downturn in 2008. Most of this increase (219,000 or 60%) was between 2011 and 2012, at a time when the number of employees dropped by 434,000, which prompts the question as to whether this is selfemployment as a result of necessity. The four most common occupations reported by the self-employed during this period were taxi drivers (166,000), â€œother construction tradesâ€? (161,000), carpenters and joiners (140,000) and farmers (123,000). Higher levels of self-employment were reported among older workers, often having started their own replicative business having gained experience elsewhere, for example through an Apprenticeship. When considering ethnicity, in the UK self-employment rates are higher among Asians from Bangladesh, India and Pakistan and also among those from China. When considering gender, it is found that women are less likely than men to be entrepreneurs. Dawson and Henley (2013) suggest that exposure to training and experience does not explain the gender difference, but instead that this is likely to be caused by differing attitudes to risk. Blanchflower and Oswald (2007) also show the importance of having a self-employed parent for the propensity of a young person to be selfemployed. An individual is two to three times more likely to be self-employed if they have a self-employed parent. Blanchflower and Oswald (1998) also find a link between receiving an inheritance in early life and becoming self-employed, indicating that access to finance has an effect. Of course, there is a risk that these classifications hide the danger of bogus self-employment which falls outside our definition of entrepreneurship. It is impossible to estimate the number of bogus self-employed workers in the UK but it is certainly not an uncommon feature of work in areas such as agriculture, construction and homeworking. Case law is complex in this area and determines an individualâ€™s employment status. Overall, workers in bogus self-
employmenthave few statutory rights and are often doubly disadvantaged because they are usually not sufficiently well-informed about their status to take advantage of the tax benefits of being declared self-employed. Particular problems identified by the construction industry union UCATT have highlighted dangers of these workers being dismissed without notice from projects as well as serious concern over health and safety problems. While the phenomenon of bogus self-employment is an important one, it falls outside our definition of entrepreneurship and is not a focus of this chapter.
Why do people wish to become entrepreneurs? When investigating motivations to become an entrepreneur, the most cited reasons are nonpecuniary, such as wanting to be independent or to improve working conditions. However, Faggio and Silva (2012) find that around one in ten people choosing self-employment are doing this out of necessity, rather than by choice. Interestingly, this ratio is the same as for people who have become self-employed because they had a business idea or
new product. Around 1 in 25 of the self-employed have joined a family business. When investigating the specific case of younger workers, Blanchflower and Oswald (2007) show that a preference for self-employment actually diminishes with age. In the UK, 44.1% of those aged over 25 would like to be self-employed, as compared to 49% of those aged 25 and under. However, the probability of being self-employed actually increases with age. In the UK, Blanchflower and Oswald show that the self-employment rate for those over 25 is 10.8%, while for those 25 and under it is 6.8%. This indicates that there may be unfulfilled demand for self-employment among the whole population, but that this is particularly pronounced among the young.
Where are the entrepreneurial “hotspots”? There is little difference between numbers of selfemployed workers in urban and rural areas at the aggregate level, although geographically there are higher incidences in tourist areas such as Cornwall. However, this masks the necessity of self-employment in some areas where there are few job opportunities. Box 8 describes the example of Wales to show how in some rural areas young people are forced into selfemployment as a necessity since there are limited employment options. By using a more restrictive definition of innovative “real” entrepreneurs, Faggio and Silva (2012) find hotspots of entrepreneurship in London and the wider south-east of England in areas such as Brighton, Cambridge and Oxford. Unsurprisingly given the structure of the UK economy, more individuals are selfemployed in services than in manufacturing (Faggio and Silva 2012).
Current policies Policies and programmes to help develop youth entrepreneurship have been a focus in many EU countries. However, it is important to note that entrepreneurial intention is lower in the EU than competitors such as the United States and China. While 28% of people in the EU felt self-employment
to be “very feasible” or “quite feasible” in the next five years, this was found to be 36% in the US and 49% in China (EC/OECD 2011). Schemes to promote youth entrepreneurship usually provide financial assistance, training or a combination of the two. For example, in Germany, the Ich-AG start-up subsidy programme offers financial assistance. In France, the Groupements de Créateurs programme aims to develop social skills, while the DEFi Jeunes programme offers micro-finance in addition to training. The Think Big programme, which covers the United Kingdom, Germany, Ireland and Slovakia, offers both finance and training. These programmes are in many cases funded by a combination of public and private groups. For example, the Prince’s Scottish Youth Business Trust receives 45% of its funding from private donations, 30% from the Scottish government and 14% from European Structural Funds, in addition to 11% from earned income. In the UK, the Department for Business, Innovation and Skills has developed the Enterprise and Business Directorate, whose role is to aid with “boosting enterprises, start-ups and small business growth.” This is achieved through training programmes in how to run a small business, and improved access to finance. However, these programmes often focus on universities, among whom there are higher proportions of entrepreneurs. Dawson and Henley’s (2013) study of university students found that a third of their sample had been given some kind of exposure to entrepreneurial training. The EC/OECD 2011 Policy Brief on Youth Entrepreneurship notes that “to maximise effectiveness and efficiency, policy should target resources on young people with the best chance of success” – as a result, many of these schemes are often tailored towards graduates. However, given the high numbers of NEETS in the UK, it is important that this group of young people should be considered as well as graduates. The Prince’s Trust offers an example of a programme that offers both hard (financial) support, augmented with mentoring support. Set up in 1976 to provide charitable grants for leisure facilities for young people,
the Trust’s scope was widened in 1983 to support enterprise for young people through the Prince’s Youth Business Trust, renamed the Business Programme in 1999. It has helped more than 77,000 young people set up a business since 1983. However, although some 3,500 young people a month enquire about accessing support, the Trust can only support the resourcing of about 500. The Trust claims to help those young people often overlooked by other lenders and established business communities. These groups include lone parents, ethnic minorities, ex-offenders and those with disabilities. The Prince’s Trust offers financial help to young people, offering start-up loans of up to £4,000 for an individual and £5,000 for a partnership. Small “will it work” grants of up to £250 are available for small pilots, although full grants of up to £1,500 are only awarded in exceptional circumstances. Again there are differences between the nations of the UK, with young people in Scotland able to apply for loans of up to £5,000 and grants of up to £1,000, but with an age of restriction of 18–25 rather than the 18–30 seen in the other nations. Crucially, regardless of location, the Trust also offers business mentoring for up to two years for those starting their own business, and a further six months for those who decide to return to education, training or other work from self-employment. In a study investigating the success of the scheme, Greene (2005) finds that the mentoring and support is particularly valued by programme participants, nearly half of respondents reporting in a study by Shutt et al. (2001) that this had made a substantial difference to achieving their objectives. Even those who did not run a successful scheme benefited from participation, 79% reporting that the experience had given them self-confidence (BRMB 1997). When considering the success of the scheme in attracting groups overlooked by business communities, however, Greene also finds that participants in the scheme have a similar ethnic and disability mix as compared to the wider young population of the UK, that the average age is towards
the older end of the spectrum and that large numbers of individuals on the programme do not come from an unemployed background. Indeed, there is significant evidence of deadweight, where many of the ventures involved in the programme would have started regardless of participation. Shutt et al. (2001) state that similar numbers of schemes were supported in both the North East and South East of England during the late 1990s, despite the very different youth unemployment levels in the two areas, with Greene (2005) noting that the Trust has an office in each of the three southern counties, but none in Durham or the Tees Valley. Meager et al. (2003) find that enterprises are more likely to survive if the participants have parents who have experienced self-employment, have been previously employed themselves, have a degree, are white and are older. Of particular interest is the finding that ventures are less likely to survive if they are found in the service sector and if they only serve local markets, offering further weight to the view that true entrepreneurship, rather than replicative business ideas for local markets, should receive the most support.
Outcomes When measuring the success of youth entrepreneurship, it is useful to think in terms of both financial and non-financial reward. However, when investigating financial success, it is important to note the high rate of failure among new businesses and among those set up by young people in particular. The Global Entrepreneurship Monitor indicates that for young people the success rate for running an established business is only around a third of the rate for older people, indicating a high failure rate. However, for those businesses that do survive, the growth rate is double that of older people, indicating that although these businesses have high levels of risk, they have high potential levels of reward. In terms of creating employment, however, it is important to note that while entrepreneurial companies may provide a job for their founder, these organisations may not then provide employment for others. This
is particularly true for businesses started by young people. In the EU, 30% of self-employed workers have businesses that employ other people, but this figure is only 12% for those aged 15–24 (EC/OECD, 2011). Young people may measure the success of their businesses with a short-term view, based on survival and profit. However, they will have lower levels of job security, and also reduced wider benefits such as pensions. Importantly, in terms of non-financial reward, Blanchflower and Oswald (2007) find that happiness levels among the self-employed are higher, and that these individuals are satisfied both with their jobs and their wider lives. Happiness has a U-shaped relationship with age – the younger and older selfemployed groups are found to be happiest.
The success of policy interventions Despite the resources that have been directed towards increasing entrepreneurial activity, a key issue remains with self-efficacy. The notion of self-efficacy is the belief that an individual has it in their ability to reach goals. Research by Lucas et al. (2009) has suggested that this is the key determinant in devising training schemes for potential young entrepreneurs, and that without self-efficacy, entrepreneurial training is of little use. This research shows the importance of selfefficacy in determining whether an individual will be a founder of a new company, and that this self-efficacy can be developed through relevant or authentic work experience, where individuals gain experience and skills that they will need as an entrepreneur. This shows the importance of schemes not only providing training and financial support, but also improving a young person’s self-efficacy. This may be achieved through coaching programmes, although it is important to note that the expense of running these programmes is significantly higher than, for example, the use of speeches by potential role models. Selfefficacy is also improved by individuals having relevant work experience with other entrepreneurial companies and taking part in live examples rather than classroom-based learning on training courses.
Examples of schemes in Wales to increase young entrepreneurs’ self-efficacy are detailed in Box 8. Finally, when considering the role of entrepreneurship for young people during the financial crisis, the question of necessity should be raised. Are young people choosing entrepreneurship as an option because they have a sound business idea that they believe will succeed? Or are they choosing entrepreneurship because of a lack of other available options? If it is the former, then training needs to be provided to these young people to ensure that their endeavours have the best chance of success, and their self-efficacy raised so as to ensure that those with sound projects and the ability to implement them have the best chance of choosing the entrepreneurial route and being successful. However, if it is the latter, then caution must be exercised when young people are potentially being pushed into entrepreneurial roles, with little chance of success, because they have no other option.
Concluding comments This section has reviewed some of the key literature regarding entrepreneurship as an alternative to employment for young people. It has shown that among young people there is a particular desire to run their own businesses. However, it has been shown that many of these businesses are replicative self-employment, rather than true, innovative entrepreneurship. Although some of these businesses can be successful, there is a higher rate of failure among new firms set up by young people, and less chance that they will provide employment opportunities for others. Although there is evidence of some successful schemes across the EU, it is important that these schemes address the selfefficacy issue – ensuring that young people have the belief that they can elicit a positive outcome. Although the majority of these schemes are aimed at high-potential schemes, often among university graduates, it is crucial that these schemes do not force young people with poor-quality business ideas into entrepreneurship or self-employment out of
necessity, simply because there are limited other employment opportunities.
Policy recommendations Initiatives to promote self-employment and entrepreneurship are attractive to young people, but we caution against seeing this as a panacea to the problems of youth unemployment. Such initiatives should be supported where possible but should not be regarded as the primary mechanism for resolving youth unemployment.
❚❚ There is a risk of some deadweight costs as some
of these businesses may have been established without support. Nonetheless, there is also evidence that there is some job creation effect where entrepreneurship among young people is supported.
Specifically: ❚❚ There is some evidence that there is unmet demand
among young people to become entrepreneurs. There is scope for targeting initiatives to promote entrepreneurship at young unemployed people but attention needs to be paid to ensuring that this is not promoting bogus self-employment. Mentoring and guidance for young people in becoming entrepreneurs is particularly valuable as should be made more widely available. Importantly, young people should not be pushed into entrepreneurship or self-employment if they do not regard it as appropriate. Schemes to promote entrepreneurship must focus on the issue of self-efficacy to build selfconfidence and self-belief among young (potential) entrepreneurs. An effective way to build self-efficacy is to give young (potential) entrepreneurs opportunities for quality work experience with existing entrepreneurial companies. It is important to target support on businesses with the potential to grow and create employment opportunities. The evidence reviewed suggests that these are most likely to be businesses that serve regional, national and international markets rather than focusing only on local markets.
8 | Youth Entrepreneurship Strategy in Wales Wales provides a particularly interesting case study as the Welsh Assembly government has seen entrepreneurship for young people as an area of focus. The Welsh Assembly government (WAG) has developed a Youth Entrepreneurship Strategy (YES), launched in 2004, and then updated with a new plan to cover 2010–15. The aim of the scheme is to “boost young people’s entrepreneurial confidence so they can play a full and effective part in the economy and community” – directly addressing Lucas’s self-efficacy problem. WAG suggest that the small size of Wales is a potential advantage as it allows people to come together easily to form networks and share knowledge. It aims to encourage entrepreneurship among young people in Wales by engaging (promoting the idea of entrepreneurship to young people), empowering (providing entrepreneurial learning opportunities) and equipping (supporting young people in creating, and then growing, their business).
about their chances of success if they started their own business, although there is little or no difference between Welsh and non-Welsh students in terms of perceived self-efficacy. Welsh students were found to be less aware of government funding opportunities for help with starting up their own business, and most believed that a bank loan would be the key source of finance, despite the current low level of bank lending.
Wales provides a potentially rich source of young entrepreneurs. YES states that more young people in Wales wish to set up their own businesses than the UK average. The Global Entrepreneurship Monitor finds that the rate of early stage entrepreneurship for those aged 18–24 in Wales is 4.3%, as compared to the UK average of 3.4%. It is important to note, however, that YES aims to “focus support on high potential start ups especially in key priority sectors and among graduates.” This highlights the risk again of some young people being forced into entrepreneurship out of necessity, and then receiving little support in the evaluation as to whether they have a legitimate business idea.
When incorporating those young people not at university, the youth unemployment rate in Wales as identified in the YES strategy for 2010–15 is 19.1%, as compared to the UK average of 18.4%. Particularly important for many of these young unemployed people in Wales is the lack of employment opportunities in rural areas. Faggio and Silva (2012) find that in urban areas a higher incidence of self-employment is positively correlated with business creation and innovation. However, in rural areas, which are dominant in mid- and north Wales, this link is not found. This difference is found to be a result of a lack of employment opportunities in rural areas, which often leads to individuals being pushed into self-employment as a necessity rather than as an optimum choice.
When particularly investigating university students, Henley et al. (2008) found that aspirations to start a new business were actually lower among students at Welsh universities than those in England, or in the wider EU. Part of this can be explained by Welsh students’ attitude to risk: Welsh students were twice as likely to view risk as “danger” as compared to students in other universities. Welsh students were also found to be less optimistic
Despite Wales providing an opportunity to engage with young entrepreneurs, and with programmes designed to improve self-efficacy, there is evidence to suggest that these programmes are aimed at graduates, and that they fail to recognise the circumstances of young unemployed people, particularly in rural areas, who choose selfemployment as a necessity rather than because they have a truly entrepreneurial business idea.
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