The #Kickstart Scheme – Creating New Jobs for Young People
In the UK, the Government designed the Kickstart Scheme to create new job opportunities for 16 to 24-year olds on Universal Credit, who were most at risk of long-term unemployment in some of Britain’s most innovative companies, including Financial Services firms.
When the Chancellor of The Exchequer, Rishi Sunak, announced the £2bn Kickstart Scheme in Summer 2020, he claimed that hundreds of thousands of six-month paid job placements would be offered to young people, who could be left behind because of the pandemic, with local employers in fully paid positions that were funded by the Government. But is enough being done?
Too Much Red Tape
Although 120,000 placements for 16-24-year olds across all industries have been created under the £2bn scheme, which is set to run until the end of December 2021, just 2,000 young people have started in new roles since the Kickstart Scheme began.
Employers, who are paid a £2,000 grant for each new apprenticeship they sign up, claimed that there was just too much red tape to handle and think tanks, such as the Resolution Foundation, are now calling on the Kickstart Scheme to be extended beyond December 2021 and also recommending that there should be more traineeship and apprenticeship places.
Initially, one of the most significant barriers to entry for SMEs wanting to take part in the scheme was the need for firms to create at least 30 new positions in order to be eligible. Although, some enterprising fintechs did manage to join together with The Fintech Power 50 to open up the fintech sector to young people and thereby fulfil the government’s criteria, everyone was not able to take this route.
For me, Sir Keir Starmer’s recent response to The Budget on Weds 3 March, shed the most revealing light on this issue when he said:
“The Chancellor said very little about the Kickstart Scheme, that’s no doubt because the Kickstart is only helping one in every 100 eligible young people, yet youth unemployment is set to reach one million.
"Like so much of this Budget, the Chancellor’s offer is nowhere near the scale of the task.”
So, it very much appears that the reality for many observers is that the numbers just don’t stack up to the size of challenge and we may all be witnessing large scale youth unemployment soon, if we fail to act now.
The U.S. Apprenticeship Model
It’s great news that the U.S. House of Representatives voted on 5 February to modernize the country’s underfunded and outdated apprenticeship system to meet 21st-century workforce needs under the leadership of Rep. Bobby Scott.
If it becomes law, then the National Apprenticeship Act of 2021 will invest more than $3.5billion over next five years to deliver nearly 1 million new apprenticeship opportunities. Brookings recently convened a thought-provoking event with leading politicians, industry leaders and employers to examine exactly what it will mean to modernize and expand apprenticeships.
Addressing the Imbalance – Closing funding and diversity gaps
Whichever side of the Atlantic you’re sitting on, it’s vital that we all take adequate steps now to expand our talent pool in the financial services industry. If we’re going to be able to address the current imbalance and address any funding, legislation and diversity gaps, then employers, academics and industry leaders must work globally hand-in-hand with experienced learning providers, like Fitch Learning, to not only understand how they can make the most of government funding, but devise right-sized apprenticeship schemes that are fit for the 21st Century.
Our apprenticeship schemes must be inclusive and give disadvantaged young people a real kick start in their chosen careers by not only offering them first-class opportunities to gain on job training, hands-on mentoring and qualifications, but by delivering the right combination of skills that are key for their employability in the future. Data management, machine learning and AI skills, will all become pre-requisite for many job roles in order to thrive in the financial services sector during the next ten years.
Top Five Tips for Running Apprenticeship Schemes
These are my top tips for setting up and delivering the best schemes that will be fit for the 21st Century:
1. The Right Balance - Program Design and Funding
It’s really important to familiarize yourself with all the funding schemes that are available when you are setting up an apprenticeship scheme. Hiring apprentices can seem costly at first glance, but these sums can vary widely depending on the training route and program design you choose, and the amount that any government may contribute to funding costs.
You need to factor these costs into your program design and ensure that it meets any eligibility criteria. At Fitch Learning, we regularly advise firms on how to achieve the right balance between their program design and funding costs.
2. Listen to Leaders and use Inspiring Mentors
Young people entering the financial services industry need to inspiring mentors and want to hear from leaders whose stories they can truly identify with on all levels according to their own gender, race or backgrounds. The Financial Services Industry has recently made some progress on gender diversity, but there is still a long way to go.
For example, I read an article in The Banker providing some unique insights from inspiring women leaders on furthering the diversity agenda, which was written by Joy McKnight, who has become the first women to lead The Banker in its 95-year history. If we are going to get the mix of our workforces right, then we need the right kind of leaders in place whom can share their stories.
3. Remove Barriers to Change
Today’s best talent may come in many forms, there are now so many more routes to entry into financial services firms than there were in the past, but not everyone is aware that things have changed. More often than not people from disadvantaged backgrounds do not consider a career in financial services, because they think it will not be right for them, or they won’t be able to succeed. Building strong partnerships with schools, colleges and universities at a grass roots level can help employers to foster strong community ties, improve understanding and create a strong pipeline of suitable apprentices and graduate trainees for their firms.
I was really pleased to see JPMorgan Chase and the Sutton Trust recently launch a nearly £4.8 million endowment fund to improve the access to employability opportunities for underserved, low-income and BME (Black and Minority Ethnic) university students in the UK, starting with 350 students in the next ten years.
4. Talent Development - Close the Skills Gap
It is important for firms to recruit a cohort of apprentices that will all be going through the same experience at the same time and can then rely on their peers and mentors for support whilst they earn and learn. Firms must also make sure that apprentices understand that this scheme is part of a career path, not a one-off learning experience. If firms create the right culture and scheme from the start, then they can ultimately reward and promote their best apprentices by either offering them unique opportunities to learn the best skills and move into permanent roles, rather than training them up and then losing them to the competition. This will enable them to develop their talent on the job and close the skills gap.
5. Showcase Successes
It’s important for employers to showcase their successes. If your apprenticeship scheme has gone well, then don’t just stay quiet, let young people know about it, preferably on social media. A survey carried out by AudienceProject revealed that 82 percent of 15 to 25-year-olds said they used the video-sharing platform, making it more popular than Facebook, WhatsApp, and Instagram. You may then find the best rising star to join your next cohort!
Andreas Karaiskos, CEO, Fitch Learning