The latest research briefing note from the Federation for Industry Sector Skills and Standards (FISSS) uses the most recent data from the DfE, HMRC and ONS to quantify the hit to apprentices during the lockdown. It shows that at each stage in the pipeline from recruitment, starts, to the apprenticeship itself, young people are being squeezed out.
Lessons from the financial crash
We have seen this before. Post-crash austerity had a peculiar effect on the public sector. Recruitment freezes shut off opportunities for young entrants to the workforce, causing the civil service to take on an older profile according to a report by the National Audit Office. More broadly, in the post-crash era, youth unemployment shot up faster than for older age groups and was slower to fall. Now the second ‘once in a lifetime’ crisis to hit the new cohort of labour market entrants threatens the same fate. Although the grim toll of redundancies continues its ascent, it is the lack of new entrants that swells the ranks of the unemployed. These jobs that never were don’t make headlines but will make their presence known in the youth unemployment statistics. Nowhere is this phenomenon more evident than in the apprenticeship market.
Young people are being squeezed out
Worryingly a trend that started pre-Covid, the gradual squeezing out of younger apprentices, has been accelerated by the pandemic. As has been widely reported, the most recent data from the DfE show that vacancies in April/May (the period immediately post-lockdown) saw a steep fall which represented an 83.2% reduction on the same period in 2019. Though not all apprenticeships are advertised, the ones that are, are typically taken by young labour market entrants. At the second stage in the pipeline, Apprenticeship starts have reduced by 47.9% during lockdown compared to the same period last year. Worryingly this reduction in starts increases to 72.6% for the under 19 age group. By combining HMRC Coronavirus Job Retention Scheme (CJRS) Statistics with data from the DfE we estimate that although apprentices are much more likely to have been furloughed if they are younger. 34.6% of under 19s have been furloughed compared to 27.8% of 19-24s and 24.2% of over 25s. This is a direct result of the different industries that younger apprentices tend to work in. Younger male apprentices are particularly well represented in construction and retail while younger female apprentices are well presented in the category ‘other services’ which includes hairdressing.
Apprenticeships are particularly exposed to Covid
We know that the combination of work and study is a powerful method of skill-development, but it is exposed to a shock like Covid in a way that a purely academic route is not. Indeed, recent figures from UCAS show that the number of applications to university by domestic students has risen. With gap years abroad off the cards and job market prospects dwindling this seems a sensible choice. The apprenticeship route will struggle to expand its numbers in these circumstances. In a downturn, companies cut training budgets and freeze recruitment.
Green shoots of recovery
One benefit that we have going into this crisis is that of hindsight given the recent memory of the financial crash. Policymakers have recognised the potential for a surge in youth unemployment and the focus on FE, apprenticeships, and careers guidance is welcome. Feedback from FISSS members – who represent groups of employers on skills – has shown that each sector faces unique challenges in this crisis and so will require unique solutions. We have also heard some positive stories as the uneven disruption to each sector brings opportunities for reallocation. In one example from our membership, People 1st International (which covers Hospitality, Tourism, Travel, Aviation and Retail) managed a collaboration with CareTech and Skills for Health that offered those made redundant in hospitality and tourism the opportunity to gain the critical skills needed to for employment in the care sector.
The apprenticeships sector has innovated at speed to keep the show on the road. We can be confident that adaptation to workplaces and changing work patterns mean a second lockdown is unlikely to mirror the first. We hope that the data in our latest report shows the lowest ebb of the crisis as we believe in the long term, quality apprenticeships will help young people weather the vagaries of the labour market.
Jonathan Boys, Director of Insight and Evidence at Federation for Industry Sector Skills & Standards (FISSS)