The Youth Guarantee can do more than get young people into work

The Government’s Youth Guarantee is a welcome recognition that too many young people are being left behind. But if it is to succeed over the long term, it must do more than help people into a first job.

The nature of entry-level work is changing. Artificial intelligence and automation are beginning to reshape the junior roles that have traditionally provided a first step into employment. In research conducted for The Open University’s latest Business Barometer, nearly one in five employers said they had reduced recruitment into early-career roles. Among those employers, 42% said AI was at least partly responsible.

That matters because almost one million 16 to 24-year-olds are currently outside education, employment and training. If some of the traditional routes into work are becoming less accessible, we need to think differently about how young people gain skills and experience and build careers.

The Youth Guarantee should therefore be more than a route into employment. It should help young people work, learn and progress at the same time. It needs to be part of a contract with employers where government provides some support to meet their skills needs and they provide some support for young people in the form of job creation and training opportunities

The need is clear. The latest Open University Business Barometer found that 57% of employers are experiencing skills shortages, while 42% expect them to worsen over the next five years.

These issues are often discussed separately. While employers say they cannot find the skills they need, large numbers of young people struggle to establish themselves in the labour market.

Our research also challenges assumptions often made about young people who are outside education and work. Far from lacking ambition, most want to develop skills and build careers. The Business Barometer found that 68% of NEET young people would upskill if it improved their employment prospects. Four in five would stay longer with an employer that invested in their development, while only 6% expected to remain outside education, employment or training over the next two years.

Young people are telling us they want to work and they want to develop their skills. The difficulty is gaining the qualifications, experience and opportunities that employers are looking for.

Many face other significant barriers too. Young people participating in our research pointed to poor mental health, limited work experience and employer expectations for qualifications they have not yet had the chance to gain. Alan Milburn’s review into young people and work reached a similar conclusion, identifying a combination of health, labour market and structural factors behind youth disengagement.

We need routes into work that reflect the labour market that young people are entering today, not the one that existed a decade ago. The world has changed.

The debate around the UK Government’s skills reforms has rightly focused on technical education, including standalone Level 4 and 5 qualifications, the so-called missing middle. These qualifications have an important role to play in meeting workforce needs and supporting economic growth.

But expanding Level 4 and 5 provision is only part of the answer. They should form part of a ladder of progression, giving people opportunities to continue learning once they enter employment and, where appropriate, progress to degree-level and higher learning. For many, the challenge is being able to build skills over time while balancing work and other responsibilities.

That matters because the workforce of the future will require continuous upskilling. Employers increasingly need advanced technical, digital and professional skills, particularly in areas such as artificial intelligence, engineering, healthcare, education and advanced manufacturing. The industrial strategy and Skills England’s agenda recognise this reality.

The Youth Guarantee should reflect that reality too. And the need for partnership between government and employers for mutual benefit

Government should encourage employers to invest in the development of the young people they recruit, developing talent over the long term. As reforms to the Growth and Skills Levy and Youth Guarantee continue, there is a strong case for additional support for those employers that offer accredited work-based learning at Levels 4, 5 and 6.

The benefits are clear. Young people gain a stronger foundation for a long-term career. Employers develop the skills they need. Government makes better use of the talent already present in communities across the country.

The Labour Governement is right to place opportunity at the centre of its programme. But if technological change is narrowing some of the traditional routes into employment, opportunity cannot end with a job offer.

Young people need the chance to earn, learn and progress.

The Youth Guarantee can help make that possible.

By Professor Dave Phoenix, Vice-Chancellor of The Open University