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The hypocrisy of the UK youth labour market

James O’Dowd, Founder and Louis Peace, Trustee of the Patrick Morgan Foundation

In May, the number of payrolled employees in the UK rose for a sixth consecutive month, according to figures published by the Office for National Statistics (@ONS).

The government’s cautious – but effective – ‘roadmap’ lockdown exit strategy has been crucial for the recovery of the UK economy, resuscitating the hospitality industry, amongst others.

The resulting demand for staff across several sectors has been instrumental in reviving the UK job market – for example, the ONS reported an increase of nearly 200,000 payrolled employees between April and May 2021.

Undoubtedly positive news, and a reason to be optimistic as we regain some semblance of pre-pandemic normality.

Worrying, however, are the statistics surrounding youth unemployment.

Of course, the general trend for the job market is one of recovery, and this will inevitably include large numbers of young people.

However, on the 15th June, the House of Commons Library published figures explaining that people between the ages of 16 and 24 were at significant risk of long-term unemployment: by spring 2021, more than one fifth of unemployed young people had been out of work for more than a year, an increase of 11,000 on the previous quarter.

Broadly speaking, that means that during this period, nearly one third of all the people in the UK who had been out of work for more than a year were aged between 16 and 24.

Naturally, the advent of the pandemic in the UK—and subsequent first lockdown—caused a significant drop in job vacancies: between March and June 2020, job vacancies were cut by more than half, from around 800,000 to 350,000. An inevitable scramble for positions ensued, made worse by the enormous number of redundancies that accompanied it.

Yet, the ONS figures show that the number of vacancies in the three months to May 2021 had jumped back up to around 758,000, only 27,000 below the pre-pandemic level.

So why are young people still so at risk, and why is the figure still rising?

Through our recent work with young people and schools in London, a few patterns have emerged. Since even before the pandemic, it is clear that national syllabuses have often fallen short in providing adequate preparation for the ever-evolving job market. For example, we have found that the current system fails to account for the rapid digital transformation taking place across all sectors.

Many young people are not taught core language, maths, and computer skills and, as a result, school-leavers are generally ill-equipped for the challenges that await them. Of this issue, Dame Sharon White, Chairwoman of the John Lewis partnership, said that a large proportion of young John Lewis staff lack the basic numeracy skills necessary to fulfil their role, despite having fantastic people and teamworking skills.

To mitigate this, John Lewis is now offering basic literacy and numeracy classes.

A fundamental disconnect between the modern education system and the job market

What we’re seeing here is a fundamental disconnect between the modern education system and the job market. Despite the UK’s progressive status within the European and wider global communities, our education system is clearly adhering to tradition where reactivity and progressivity are imperative.

To compound this, in certain schools, there is a distinct lack of infrastructure for specialised careers and employability education, resulting in a generation of young people unaware of the breadth of opportunities available to them.

Clearly, the problem is not just local. Research conducted by the Institute of Student Employers (ISE), in tandem with the labour market insights website Prospects Luminate, reveals that 64% of university graduates cite their lack of real-world experience as a barrier to them finding long-term, meaningful employment.

Surprising, too, is the revelation from Prospect’s graduate expert, Charlie Ball, that even those fortunate enough to have undertaken postgraduate study over the past year are less likely to find work than those who worked in unskilled positions throughout the pandemic.

The answer seems simple.

Young people still in education should aim to carry out relevant work experience in order to consolidate their academic education, develop workplace-specific skills, and ultimately make themselves more employable.

The ISE’s research agrees; the study shows that 55% of employers found college and sixth-form students who had undertaken a work experience placement were more skilled than those who had not, a figure that rises to 78% for university students. This has led to employers favouring candidates with more experience, which makes sense: to minimise the risk of a bad investment, the employer will pursue candidates with demonstrable experience in the field.

Yet we are forgetting that this cohort of young people is facing not only a 29% drop in internship and work experience opportunities, but the highest long-term unemployment rates since the austerity period of 2012. To demand years of experience for entry-level roles seems severe, verging on hypocritical. This issue is exacerbated for those from underprivileged backgrounds, too.

The aforementioned lack of careers and employability education in typically lower-socioeconomic areas of the UK has led to a bottlenecking of the talent pool within the youth labour market, and a subsequent perpetuation of the vicious circles that we so desperately need to overhaul.

Three ways to implement sustainable change

In order to implement sustainable change, we believe we need to address some issues individually:

1. Employers must diversify their hiring strategies

Firstly, as the UK cautiously continues on its path out of lockdown, more opportunities for recent school-leavers and graduates will appear. Speaking with SMEs and leaders from large corporations within our network, it strikes us that there is an increasing appetite for a young, enthusiastic workforce across all sectors, and that in the wake of the pandemic, more businesses will make an active effort to diversify their hiring strategies. This leads us neatly onto our next point.

2. Employers must assume greater levels of accountability

As we move into the new decade, it is critical that employers start to assume greater levels of accountability. It is no longer acceptable for businesses to hire exclusively based on academic attainment or an impressive CV.

As Stephen Isherwood, Chief Executive of the ISE, has explained:

“With graduates’ ability to be ready for work decimated by the shortage of practical work experience, employers need to find ways to work with educators to offer opportunities….[they] need to invest in their entry-level talent to get the best out of them.” Employers must adopt a talent-led approach, with a candidate’s potential for development at the very core of any application process.

Within Finance and Professional Services, we’ve already seen progress in this regard. In June this year, PwC UK announced that it had guaranteed all places for candidates with offers to join its school and college leavers programme, removing the original grade requirements.

Laura Hinton, Chief People Officer at PwC UK, explained that more than 100 students had been made unconditional offers in a move to broaden access to the firm post-pandemic; a refreshing initiative, and one we would love to see repeated not only within the Professional Services sector, but among all large corporates.

3. Change the UK syllabuses to reflect the dynamism of the job market 

Finally, we cannot advocate enough for a change in UK syllabuses to reflect the dynamism of the job market. Through the Patrick Morgan Foundation’s activities, we have been fortunate enough to interact with so many talented young people in and around London, who harbour enormous amounts of potential, and perhaps more significantly, a real curiosity for the working world.

Yet consistently, these young people are denied access to the resources and education they need in order to achieve real success. In some cases, we’ve even seen educators pushed into teaching topics they are unqualified for due to a shortage of resources.

That is not to say that nothing is being done.

We have met individuals from several organisations nationwide, in both the public and private sectors, working tirelessly to bring opportunities to the young people who need them most. Nevertheless, we firmly believe that more can be done, and recognition of the magnitude of this issue is an important starting point.

We are keen to offer the full support of our Foundation, and are always interested in engaging and collaborating with other organisations and individuals with the common goal of enacting sustainable change. As such, please do not hesitate to contact us regarding anything mentioned here.

James O’Dowd, Founder and Louis Peace, Trustee of the Patrick Morgan Foundation

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