Is there an answer to youth unemployment?

http://money.aol.co.uk/2012/03/07/is-there-an-answer-to-youth-unemployment/

Is there an answer to youth unemployment?

apprentice bricklayerIan Nicholson/PA Wire/Press Association Images

The news on youth unemployment is worse than you think. It’s not just that the rate of unemployment among the under 25s has reached a record level, and it’s not just that the numbers keep on climbing. It’s the fact that this decline in the employment of young people started well before the recession.

The government has launched a consultation into what on earth can be done. However, the answer could be in front of us right now: apprenticeships.

Stark figures

The figures make for fairly depressing reading. The unemployment rate for young people has risen to an astonishing 22.3% – compared to 9% across all age groups. They have been quick to be laid off in the tough times, and are finding it nigh-on impossible to find new work.

And this isn’t the worst of it: the Work Foundation points out that this isn’t just the effect of the recession, because the employment of young people has been dropping since 2004. And while it doesn’t offer any particular reasons, it is happy to speculate that as roles have become more complex, and more reliant on specific technology, experience has become more valued.

It seems fairly hopeless for young people right now. However, there is a glimmer of optimism offered by apprenticeships.

Apprenticeships

These are jobs offering on-the-job training to young people, run alongside more formal training. An apprentice will work towards a specific qualification, while at the same time getting trained up in job-specific skills. Some will work three or four days a week and study for the rest of the time, while others will do 95% of their training in the workplace.

For the young person the benefits are clear: they get training while getting paid at the same time, and they are in a full time job with a proper contract for the duration of their training. At the end of the apprenticeship they will be in a position to advance within the organisation. Jessie Buscombe, Head of Employer Accounts at the National Apprenticeship Service, says the better prospects equate to extra earnings of £100,000 over the course of an apprentice’s career.

Finances

There is also the advantage that instead of leaving education with £40,000 of debt, like a university student, those on apprenticeships will be making money throughout their studies. Buscombe says: “It’s an alternative to academic education. It’s not better or worse. It partly depends on the career the individual is working towards, and how they prefer to learn. Increasingly because of the high cost of university, young people are weighing up the costs and benefits and may see apprenticeships as more beneficial to them.”

The appeal for the employer lies partly in the fact that their pay is substantially lower than an alternative employee – in fact their minimum wage is just £2.60 an hour (for those under the age of 19 or those over the age of 19 in their first year of apprenticeship) – although many employers choose to pay more and the average salary is £170 a week. They also have the training paid for if the individual is under the age of 19, and 50% of it paid if they are older. Smaller employers can also receive a grant in addition to the funding.

Better business

Long-term, Buscome also says studies have shown increased retention of staff, productivity and even profitability. She says the robust business case has persuaded 130,000 employers to sign up to the scheme – a number that is growing rapidly.

Swift Caravans, the UK’s market leader for touring caravans and motorhomes, has reaped the benefits of the programme. Nick Page, Group Commercial Director at Swift Leisure, says: “We recognise that investing in people from an early age is important if we are to grow our talent. We have people who have been here for 25 years who started as apprentices. It is difficult to recruit engineers in this part of Yorkshire, so by supporting and helping people from the beginning, we have built a skilled and engaged workforce.”

Christian Knight is an apprentice with the company at the moment. He found the job through his course at Hull College, doing his National Diploma as part of an engineering apprenticeship with Swift. He is now working on his foundation degree, and has moved to work within the design and development team. He says: “I have always been interested in CAD and Swift gave me an opportunity here. I work closely with the team, so there is support from more experienced people. There are also quite a few apprentices in the company and we help each other too.”

Christian says it was a lifeline: “I have friends from school who are still looking for work. Through the apprenticeship I have qualifications, I have been earning throughout, and I’ll have a job at the end of it.”

Paul Champion
Strategic Project Manager

Mobile: 07540 704920

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