ESTHER O’CALLAGHAN OBE, CO-FOUNDER & CHIEF EXECUTIVE OFFICER AT HUNDO – WRITTEN EVIDENCE (YUN0082)

Youth Unemployment Committee inquiry

The issues contributing to Youth Unemployment across the globe are both structural and systemic.

The fiscal cost to the UK of youth unemployment is £10BN directly, plus the cost of welfare, housing, mental health services and hampering productivity against the backdrop of an ageing skilled workforce and the rapid rate of new skills needed for the Fourth Industrial Revolution.

Without a future skilled workforce, the UK is losing global competitiveness’.

There is nothing inherently wrong with the ideas that sit behind the current Government led schemes (Apprenticeships, TLevels, Kickstart), just as there was nothing inherently wrong with Welfare to Work, New Deal, Connexions, that pre-date the current schemes.

But undoing decades of fundamental, structural breakdown between each stage of the education to employment journey is not achievable with the current schemes.  Young people need more than mentoring, more than GCSE’s, they need a coherent and consistent systemic roadmap from education to employability skills and ultimately employment.

Recognising that the education system cannot keep pace with the rate of change in the employment market is essential. 

• Unemployment rates for young British Black and Minority Ethnic people were already high before the Covid pandemic, and subsequently rose significantly, with 41.6% of black people aged 16-24 unemployed in December 2020 compared with 12.4% of young white people (ONS, 2021).

• On average, 51.3% of people with disabilities are in employment, compared to 81.4% for people without a disability. Regional disparities are significant, with a 44% employment gap in Northern Ireland (Learning & Work, 2019).

• 1.3M young people with SEN (Special Educational Needs) and/or physical disabilities, 7% in paid work, 80% able to work.

• Those aged 16-24 account for three in five jobs lost as a result of the pandemic.  Their jobs were already at the low paid and insecure end of the jobs market.

• Young people who grew up on free school meals are 3x more likely to face unemployment.

• Youth unemployment is the product of poverty – the pandemic highlighted this, but it existed before.

• Brexit has demonstrated the cost of the UK’s overreliance on a skilled overseas workforce which has now laid bare the cost of devaluing vocational skills, workers’ rights and pay in core industries including Logistics and Health & Social Care which are crucial to the Nation’s supply chain and health.

Recruitment and Hiring:

Hiring practices have favoured young people with resources, personal connections, and particular educational backgrounds. Traditional hiring methodologies perpetuate inequality and suppress diversity. Alongside this, many industries are experiencing a growing skills gap and issues with an ageing workforce. Potential algorithmic bias is a growing concern, with around 40% of HR functions in international companies now using AI (CDEI, 2020). CVs can cause discrimination in themselves and recruitment methods at entry level have changed very little over the last 50 years in many companies.

Removing inherent hiring bias, at a human and algorithmic level, with a particular focus on young people from under-represented backgrounds such as young people with disabilities, Black And Minority Ethnic communities, young carers, those leaving care and intuitions (youth offending units).

Kickstart Scheme:

This had the possibility of being a brilliant scheme and given more time and structure, it still has the potential to be.

We would urge dialogue with Treasury to consider the fact that this scheme, administered in a different way, would have been a huge success, not just a temporary fix.  

Below is a snapshot of why it has not delivered the roles despite the fact there was huge appetite from employers to hire.

6-month paid placements.

But employers want young people to demonstrate 12 months experience.

Chronic delays between gateways (laterally abolished) and job centres.

The original scheme did not factor in that the SME market would have most of the jobs (the expectation was 250k roles could be provided by c1K Enterprise companies).

More than 263,000 jobs have been approved for funding by the Scheme. 50K+ young people have started Kickstarter jobs, of which just 2% were single person claimants responsible for a dependent child under the age of 16.

One example of the problem with the scheme: ABC joined the Government’s Kickstart Scheme in December 2020.

They joined the scheme with two great roles, each with Kickstart in mind. 

• Content Editor
• Lead Generation and Sales Support

"We see this as a great opportunity to help young people develop skills within an established team. We would not be able to provide these placements if it were not for the Kickstart Scheme."

The company added two more roles to give young people further opportunities to learn within their business:

• Marketing Assistant
• Digital Marketing Assistant.

• The roles were not approved until March 2021
• There was a further delay for their roles to 'go live' on the system.
• They received more than 100 referral emails for the Content Editor role - at least two thirds of which were completely unsuitable for the role suggesting that the 'role matching' automation is heavily flawed and unfavourable to the business and to the young people.
• They received very few referrals for the Lead Gen and Sales Support roles.
• There was a lack of support for any queries, with weeks to receive a reply and never from the same person.
• Payments were incorrect, late or there was no record of the young person, despite all procedures being followed.

Small firms don’t have the resources to manage these flaws in the process.

Student debt:

is unsustainable and UK is losing competitiveness as a result.  The skills taught from school and FE to higher education are not relatable to the rapidly changing job market and leave students trapped with student debt they are unlikely ever to have the jobs that allow them the income to repay.

Young people who attend University from socio-economically disadvantaged backgrounds (often the first in their family to go to University) still struggle to gain work against their privileged counterparts who do not leave University saddled with student debt, who did not have to work while studying to support themselves and who have a family network and alumni to fall back on.

Of more concern, is the volume of University Graduates who came through the Government Kickstart Scheme.  This speaks to a fundamental breakdown of the education to employability journey for young people across the board.

Tech skills:

Employers believe that digital skills are vital in every sector of the economy. 

Young people agree.

Nearly nine in ten (88%) young people say that digital skills will be essential for their career. 

Yet since 2015 40% fewer young people taking IT at GCSE.

There is a digital skills gap with strong regional bias and a lack of diversity (age, gender, ethnicity) in the industry.

Six in ten employers expect their reliance on advanced digital skills to increase in the next five years.

76% of firms think a lack of digital skills would hit their profitability - BBC

UK productivity is falling, and competition is growing from centres of excellence around Europe and further afield.

We need to invest in digital capital and accept that the future of learning and work is being fundamentally restructured.

There needs to be more funding for the FE sector to bring vocational skills on par with academic skills.

T Levels are a brilliant policy move, operationally challenging.  

To level up, we need to address levelling the field first particularly in communities where intergenerational poverty is so prolific and entrenched.

Paid Internships:

Unpaid internships must end.

It is impossible to level up when so many young people can’t afford train/bus fare to get to unpaid work.

There is no correlation between unpaid interns getting more job offers than students who have no internship experience.

Paid internships disproportionately go to white males with degree education.

Black, minority ethnic groups and young women are most likely to have to take unpaid internships.

Apprenticeships: 

In principle, apprenticeships are a good thing, but protractedly difficult for employers, especially small businesses, to implement.

Families actively prevent young people from taking up Apprenticeships in some cases due to the fact the family then loses welfare payments, so they are worse off by going to work.

Small Firms:

Small firms need access to the skills that will allow them to modernise, professionalise and improve their business processes. We need to get young people into small firms and small firms need support to take up opportunities to engage with skilled young people. More needs to be done to build an interface between all sectors/industries and the education system to plan for the skills employers will need at the point particular cohorts of young people leave the education system. Many industries, and in particular the smaller firms in those sectors, are experiencing growing skills gaps and issues with an ageing workforce. If small and micro firms are to flourish, we need to consider new pathways for young people into job opportunities, with appropriate recruitment practices, in those firms, and better recruitment support for small and micro firms.

Appendix

World Skills UK Report on UK digital skills gap: Disconnected Report 

BBC Article: UK heading towards digital skills shortage disaster

Education Technology Article: How to plug the UK’s digital skills gap

17th September 2021