From education to employment

UK skills shortage update: Addressing youth unemployment

olly newton

With the release of Edge’s 10th skills shortage bulletin, we’ve learned to expect the unexpected. Few could have predicted the impacts of Covid-19 and Brexit, for example. While our latest bulletin continues exploring these issues, it also looks at how broader global and domestic trends are impacting the labour market. One key focus is youth employment. What are the pressing issues and what’s being done to mitigate them?

Call for a skills-based national curriculum

In November 2020, following youth unemployment rates of almost 15%, the House of Lords Committee on Youth Unemployment was appointed. In the latest bulletin, Lord Shipley reflects on the committee’s work, highlighting the narrow space school curriculums leave for essential skills development. This is timely – figures released in February show that job vacancies are at their highest level since records began. Skills mismatches are a fundamental factor in this.

The committee noted that England’s academic-heavy curriculum comes at the expense of developing skills like teamwork, communication, creativity and problem-solving. To equip young people with the knowledge, technical and cultural competencies the economy demands, the committee has therefore recommended that government recalibrate the national curriculum to place skills at its heart. Effecting this change may be more challenging, but it is a good sign that senior voices are rallying behind the need to improve young people’s work readiness.

Continuing impacts of the pandemic

Although the pandemic is receding, its effects are not. In their latest research, University College London surveyed 3,000 young adults to assess the impact of the pandemic on job skills learning. 47% reported that Covid had worsened matters. Surprisingly, perhaps, 17% believed their job skills learning had actually improved during Covid. There was, however, a stark difference between those in education and employment. Of those in education, 61% felt their skills learning worsened, while only 34% of those in employment agreed.

While the effects of the pandemic on youth unemployment and skills are less drastic than feared, there’s a concerning longer-term downward trend in young people’s exposure to training. Education leaders must heed this bellwether, devising strategies now to tackle future skills erosion. These should ideally build on discussions with young people. UCL also suggests that recovery plans could be best left to local education leaders rather than dictated centrally in a one-size-fits-all approach.

High-quality entry-level jobs are required

First the good news: research from the Resolution Foundation confirms that predictions of record-high youth unemployment failed to materialise. However, this is not a guarantee that all is well. They also highlight three labour market trends that may hint at longer-term effects of the pandemic.

First, those who experienced worklessness during the pandemic are at greater risk of longer-term employment scarring. Second, those who experienced worklessness are more likely to return to work on atypical contracts. Third, the proportion of young people not in employment, education or training has recently increased. Unsurprisingly, these effects are accentuated for young non-graduates and those from Black, Asian and Minority Ethnic backgrounds. The research highlights the need to support young people in finding and applying for work and ensuring high-quality, entry-level jobs with room for career progression.

Apprenticeships could be a lifeline

The pandemic has consumed much focus over the past two years but other issues, like Brexit, the accompanying plunge in overseas labour, and the climate crisis, are still concerns for the UK skills landscape.

Open University’s Business Barometer Survey 2021 suggests that apprenticeships are one viable solution for many of the issues looming over UK businesses. The most recent survey found that 56% of businesses believe apprenticeships and work-based learning are critical to long-term success – an 8% increase from 2020. 96% of employers currently working with apprentices also plan to maintain or increase the number of apprentices in their organisation. A positive sign.

However, barriers to apprenticeships remain

Research from the Confederation of British Industry (CBI) confirms that, as the economy readjusts, businesses are ready to play frontline roles in vocational training. However, while many value apprenticeships, obstacles remain. In particular, the Apprenticeship Levy is a significant barrier to increased training investment, especially for SMEs. Only 67% of businesses are now offering apprenticeship programmes, down from 85% in 2019.

Fortunately, the problem is not insurmountable. The CBI suggests greater collaboration between government, business and education providers can help. And despite barriers, 81% of employers are confident they’ll be able to support young people’s training over the coming year. Youth employment schemes like Kickstart and structured support during recruitment and on-boarding processes will also be key. The government skills bill presents another opportunity to deliver on the confidence of most firms that they can meet their long-term skills needs.

Overall, Edge’s latest bulletin suggests that the short-term risk of high youth employment is receding but that we must remain vigilant. Increased awareness of the issues and willingness by employers to engage with education and training offers hope that we can address youth unemployment before it becomes a major crisis.

By Olly Newton, Executive Director at Edge Foundation

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