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Janet Dunnett manages Private Sector Development at OnSide, she discusses the affect record high youth unemployment is having on UK businesses…
“The news is full of the latest youth unemployment figures which are at a record high, with unemployment among under-25s having reached over 1 million. These are the highest figures since records began in 1992. What has been the government’s reaction and solution to this growing problem and how does this affect businesses now and in the future?
In a recent breakfast summit at Downing Street, David Cameron sought to identify barriers that prevent companies, especially small and medium-sized ones, from hiring more young people as apprentices, whether it is red tape, minimum pay rates or the training available from colleges.
However, a report by the Institute for Public Policy Research think tank says that government apprenticeship schemes are not helping enough young people – just 37,000 of the 126,000 apprenticeships created last year went to 16 to 24 year-olds. A raft of new initiatives has been announced over the last few weeks to combat the growing protests about this issue:
The Youth Contract, at least 410,000 work places will be found for 18 to 24-year-olds from next April at a cost of £1billion
Wage subsidies worth £2,275 will be handed to employers to take on 160,000 18 to 24-year-olds
Extra funding for apprenticeships and a £50 million programme to help persistently NEET 16 and 17-year-olds will be on offer too
The work placement scheme operating through Job Centres is to offer work experience to young people on benefits. A proportion of these young people do manage to secure employment following the placement but there have also been comments that it does nothing to break the cycle of unemployment and poverty but is actually verging on exploitation.
Do these kinds of placements, often low-skilled work, really help young people gain valuable skills and experience for the future? Are they of any value to businesses particularly if there is no-one available to train and supervise them – surely a growing feature of companies already stretched on staffing ratios? When the placements are properly structured, with support from an appointed member of staff, they do provide the type of work experience that is going to benefit young people and help them gain future employment.
However, what many young people need more than anything is a responsible and knowledgeable adult who can provide them with one to one guidance and advice about their career (and their life in some cases), inspiration and motivation. Many young people lack confidence in themselves and in the future so are handicapped before they even begin to think about a job. These are the kind of services that have been cut and will not be provided because they are expensive and time-consuming. Companies who are able to provide both work opportunities and staff who can mentor or coach young people will reap the rewards both for their company and in providing a skilled and focused workforce for other businesses.”
Peter Chambers, a partner at PwC, shares his thoughts about why investing in the future workforce is a priority for his company any why it should be a priority for all businesses: