Getting young workers back on the job

Youth unemployment has officially dropped, but  many are  falling back on education and part-time work, with full-time careers remaining elusive. IONA LOOKS AT WHETHER TRAINING AND APPRENTICESHIPS COULD PROVIDE A DESPERATELY NEEDED REMEDY, PLUS DETAILS OF GOVERNMENT HELP YOU COULD BE ENTITLED TO

How do you solve a problem like youth unemployment?

It is a troublesome matter at the best of times. Even when the economy seems to be in good shape, young people rarely walk into jobs and keep them. Skills shortages, too few apprenticeships and a dearth of opportunity in some regions (hence the phrase ‘get on yer bike’) have been long-standing obstacles to young people finding work in this country.

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But when recession hits, the problem becomes a crisis. The official employment statistics released today show that 895,000 young people were out of work in the three months to April. It is a reduction of 79,000 from the disastrous record figures that followed the credit crunch, but belying these statistics is a retreat of some 61,000 young people into full-time education and being classified as “economically inactive”.

But there have been so many university students taking all kinds of degrees in the past decade that many have seriously devalued, if not lost their worth. On top of that, not enough degrees provide the specific skills that would make graduates employable from the get go.

The amount of young people taking on part-time jobs has rocketed too. For instance, PeoplePerHour.Com, Europe’s largest online business market place, has claimed that the number of students and young people signing up to find part-time work on the website has doubled.

As young people take refuge in education and part-time grafting, the possibility of a full-time career seems to ebb away. Much like in the early 1980s, the prospect of a “lost generation” looms large.

When I look around at my friends, most are living in uncertainty, despite having a clutch of impressive school and university/college qualifications. It seems that their education hasn’t actually qualified them enough to get a job they think they deserve.

They were told throughout their young lives to find a career they are “passionate” about but many are just grateful to be in a stop-gap job, whether their heart is in it or not. Expectations are being seriously curtailed; some are on short-term contracts and precarious freelance work, wondering if their next pay cheque might be their last. And these are the ones who are lucky to be in the fabulous world of work at all.

This means that when young people do get jobs, they won’t want to bite the hand that feeds them, and may consent to earning less and working fewer hours. Research by the Institute for Employment Studies and the BBC Newsbeat team suggested that those under 30 have seen their real pay fall £890 a year since the recession first hit in 2008. People aged 16-21 are also working two hours a week less than in 2008. “That can partly be explained by a rise in temporary jobs as teenagers and 20-somethings decide to stay on in education or take part-time work, rather than hunt for a full-time career in a competitive market” said the BBC research.

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And when businesses do have to cut back, the young workforce is naturally the first to go. A 23 year old friend of mine, who we shall call Sandra, was made redundant from a Scottish PR firm two weeks ago.

Her previous employer has big contracts and a sizeable reputation but, evidently, no resources or appetite for the risky endeavour of training young employees on the job.

And that is the nub of the issue. Sandra had little experience in PR (a field of work that is akin to a lion’s enclosure when it comes to job competition). It presented her employers with a headache; they would need money and time to train her, with the possible outcome of a rival firm poaching her once the hard work was done or Sandra suddenly dropping out. In order to qualify for government subsidies, the firm would have to set up a substantial, officially approved “scheme” and swim through a sea of red tape. Training Sandra would be too much of a financial and practical gamble.

Jamie, 23, has struggled since leaving university with a science degree he found out too late he didn’t really want, but had sleepwalked into from his school exams.

He decided to refocus on engineering, and to target an apprenticeship scheme with a leading firm.  Out of 120 candidates, he made it onto the short-list of 12 who were interviewed, but not into the final three who were taken on.

Undaunted, he has not only learned a lot from the process and interview feedback, but decided to train himself up in the skills which the chosen apprentices are now learning. “I want to re-apply to the same firm in the hope that one of the present intake may drop out, or to give myself a strong chance of being accepted next year.” he says. 

If more companies did have the means of taking on more apprentices like Jamie, could it really be the panacea to youth unemployment?

Success stories from abroad seem to suggest so. As I mentioned in my blog last week, Germany has an impressively low youth unemployment rate – 8.1% – owing in part to a flourishing apprenticeship culture. School leavers are targeted by 24% of German firms offering thousands of posts. Over there, vocational training is as distinguished a path as academia.

The UK has always wanted to follow suit. The current government recently launched a new “Work Programme” designed to get millions of people off the dole and into jobs. It is billed as the most ambitious back to work programme in recent times, awarding lucrative incentives to employers that train and keep people in their pay.

There’s nothing new in the intention, but by operating under one public body, there will apparently be very little interference in how the schemes are run, with the government only interested in outcomes. That can only be a good thing, considering how much bureaucracy prevented businesses from taking on apprentices in the last government. On the one hand, the Labour government was fully committed to apprenticeships, leading to a 60% rise in the number of young people taking apprenticeships in England. But in reality, the commitment also came with a swarm of public bodies that over-regulated businesses and established complex, often excessive rules. For example, the minimum amount of apprentices needed to access funding was eventually set at 50 in 2005. The reams of paperwork required –one example was half a million documents for a firm employing 1,500 trainees – was a bridge too far, even for the most well-meaning employers.

But the stakes have been raised, even if the red tape has been cut. Contractors only get 10% of the cash up front, and may not see the full amount – about £2,200 for each young employee – until they have been with the company for as long as two years. Unfortunately, recent research indicated that as many as 1 in 4 apprentices drop out, with some businesses reporting that a quarter of their trainees quit within six months because they lose interest, struggle with the hours or have to deal with personal problems.

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The completion rate of German schemes is, by contrast, heartening. Siemens, the engineering giant, says 86% of its apprentices gained a permanent contract at the end of it all. Moreover, the British arm reports a 2% drop-out rate due to a “good partnership” with schools.

Apprenticeships need an image overhaul to attract quality young candidates. Tuition fees may shut out many would-be students, so firms need to intercept and harness this potential talent. But if candidates are to see it through to the end, apprentice firms need to take after the Australians and treat young apprentices sensitively – we’re at a delicate stage in our lives, and perhaps the last thing we need is any Alan Sugar style treatment. 

Meanwhile, there is some financial help for those who can’t find work. Know what you are entitled to avoid missing out and follow my tips.

If you are over 18 and not in work, you can claim Jobseeker’s Allowance, providing you are seeking a job.

“Jobseeker’s Allowance (JSA) is a benefit open to most people over the age of 18 who are unemployed, not in education and looking for work,” says the DirectGov website. “You could also be eligible if you have a job where you work less than 16 hours every week.” This can include graduate placements and internships as well.

Consider volunteering – it would not affect your benefit and can enhance your working credentials if you can’t find a job.

You can still claim JSA if you decide to volunteer; this means if you’re working for a public sector, charity or community organization for nothing, even if you get some expenses. You can work as many hours as you wish, but you would still have to attend interviews at the Jobcentre and prove you are actively looking for paid work. If you volunteer full-time, you may want to request a subsistence allowance instead to cover your living expenses, but you would not able to JSA at the same time. The Princes Trust team programme is just one scheme designed specifically for unemployed 16-25 year olds and will still allow you to claim JSA. See the website for more details.

Housing Benefit can help with renting costs

“You can claim Housing Benefit to help pay for your rent if your income and savings are below a certain level.”  If you’re single and under 25 you can get Housing Benefit for bed-sit accommodation or a room in shared accommodation.  Check with your local council to see if you qualify.

You may be able to get a Job Grant if you are moving from benefit into work.

“This could be starting a new job, increasing the hours you work in an existing job or having a combination of jobs” says DirectGov. You must be getting a job where you work at least 16 hours a week and you have to be claiming your benefit (JSA, Housing etc) 26 weeks prior to beginning the new job.

However, watch out if you are an unpaid intern – you probably cannot claim any benefits

If you work in a job that would ordinarily pay – say, a position in a profit-making business – for more than 16 hours a week, this would be categorised as “notional earnings” and you probably wouldn’t be entitled to JSA. You also wouldn’t qualify if you worked for a family member. You must always check with your local Jobcentre advisor about your individual circumstances. If you are struggling, ask your placement provider whether they can cover expenses, but don’t have too high expectations of what they can provide.

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