Archives For Youth

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Research suggests that, for too many jobs, the cost of university outweighs the economic benefits, and that the prevailing rhetoric on the need to get more and more young people into university needs to change.

Successive governments’ preoccupation over the last 30 or more years with getting more and more young people through university is no longer justified given the employment outcomes for many graduates and the associated costs involved, a new report has shown.

The report, Alternative pathways into the labour market, by the CIPD, the professional body for HR and people development, finds that, for a wide range of occupations which have seen significant increases in graduate rates over the last 35 years, alternative vocational routes into employment are both possible and less costly, with a smaller proportion of this lower cost falling on the learner. 

The report is published at a time when the average student is now leaving university with £44,000 of debt and, even by the Government’s own estimates, 45% of the value of student loans will not be repaid. The report calls into question the continued focus on the ‘graduate premium’, with previous CIPD research showing that more than half of graduates were working in non-graduate jobs after they left university. Furthermore, Brexit makes it even more important that the UK’s investment in education and skills delivers value for learners, employers and the economy.

The CIPD’s research considers 29 occupations, which together account for nearly 30% of employment in the UK and over 30% of the work performed by graduates currently. It shows that for many of these jobs, while the numbers of graduates have increased sharply over the period from 1979 to 2014, in many instances the level of skill required to do the job has not appreciably changed. 

The report also suggests that, for too long, employers have been recruiting graduates into many roles that don’t utilise this level of qualification. Employers need to open up recruitment to more non-graduates, while also working to develop more of the roles that do require graduate skills. 

The report, Alternative pathways into the labour market, finds:

  • 35% of new bank and post office clerks are now graduates, compared with 1979 when just 3.5% of bank and post office clerks held degrees
  • 42.9% of police officers at the rank of sergeant and below entering the police force now hold degrees, compared with 1979 when less than 2% of police officers of similar rank were graduates
  • 41% of new recruits in property, housing and estate management are graduates, compared with 3.6% in 1979
  • 36.9% of newly employed teaching assistants enter those jobs with a degree – as late as 1999, only 5.6% of the occupation as a whole did so

In response to the issues raised in the report, the CIPD is calling for Government to:

  • Improve the quality of careers advice and guidance to young people while they are in school so they can make better informed choices about career pathways
  • Ensure that apprenticeship policy moves away from trying to simply increase numbers towards improving the quality and progression routes of apprenticeships, in order to create a meaningful alternative route to university for young people and employers
  • Ensure the forthcoming industrial strategy has a clear focus on creating more high skilled jobs and progression routes at work. This requires an emphasis on raising the quality of leadership and people management, job design, and training and development through partnerships between government, employers and unions at a national, sectoral and local level.

Peter Cheese, CIPD Chief Executive, said: “This report shows clearly how the huge increase in the supply of graduates over the last 35 years has resulted in more and more occupations and professions being colonised by people with degrees, regardless of whether they actually need them to do the job.

“Governments of all colours have long had a ‘conveyor belt’ approach to university education, with a rhetoric that has encouraged more and more students to pursue graduate qualifications. However, with this research showing that for many graduates, the costs of university education outweighs its personal economic benefits, we need a much stronger focus on creating more high-quality alternative pathways into the workplace, such as higher level apprenticeships, so we really do achieve parity of esteem between the two routes.

“It goes without saying that the UK needs a world class higher education system, but this report really does provide a reality check on the assumption that continually increasing the numbers of people going to university truly adds the right value for learners of all ages, employers and the economy. 

“Graduates are increasingly finding themselves in roles which don’t meet their career expectations, while they also find themselves saddled with high levels of debt. This ‘graduatisation’ of the labour market also has negative consequences for non-graduates, who find themselves being overlooked for jobs just because they have not got a degree, even if a degree is not needed to do the job. Finally, this situation is also bad for employers and the economy as this type of qualification and skills mismatch is associated with lower levels of employee engagement and loyalty, and will undermine attempts to boost productivity.”

Peter Cheese added: “In the current Brexit context, it is imperative that we take stock of the UK’s education and skills policy so that our current and future workforces can deliver the economic growth we need.

“To tackle this problem, policy makers need to improve the quality of careers, advice and guidance so young people have better information about other non-graduate routes into the labour market, for example, through apprenticeships. At the same time, much more needs to be done to reform the apprenticeship system which currently generates high numbers of Level 2 apprenticeships, equivalent to just 5 GCSE passes, with relatively few at Level 3 and above. Unless we have many more advanced and higher level apprenticeships, the apprenticeship route will continue to be seen as the poor relation to university. 

“Employers also need to broaden their recruitment practices and ensure they are not using a degree as a means of screening job applicants for jobs where there is no justification in terms of the skills needed to do the job. 

“Finally, government needs to ensure that its new industrial strategy has a focus on creating more high skilled jobs, which requires working in partnership with employers, representative bodies and unions at a national, sectoral and local level to improve the quality of leadership and people management, job design, and training and development across the economy.”

CIPD logoOverall jobs growth set to continue while pay growth edges up but shows little sign of taking off

Against the backdrop of low unemployment and rising recruitment pressures, UK employers are increasingly turning to young talent to fill their skills gaps, signalling the end of a broadly ‘bleak’ decade for young jobseekers and giving a boost to the thousands of young people who are entering the jobs market for the first time this summer.

This is according to the latest Labour Market Outlook from the CIPD, the professional body for HR and people development, which shows that the proportion of employers that say they plan to hire more apprentices and school-leavers has increased sharply in response to recruitment difficulties since spring 2014. Up-skilling for all employees remains the most prevalent employer response to recruitment difficulties, cited by half of employers (50%) but a third (33%) of employers currently reporting hard-to-fill vacancies plan to hire more apprentices, a marked increase compared with just 22% in the spring 2014 report. Around a quarter (26%) predict recruiting more graduates and twelve per cent plan to hire more school leavers, up by a third compared with the spring 2014 report (9%).

The findings help explain the latest ONS data which shows that the employment rate for 16-24 year olds that aren’t in full-time education has risen to a level last seen in 2008 (74.3%).

Gerwyn Davies, Labour Market Analyst at the CIPD, comments: “After a long, dark decade, the prospects for young people are finally looking brighter. The tightening labour market is undoubtedly encouraging more employers to turn to a wider range of younger recruits. However, it is also due to a recognition among a growing number of employers that they need to develop talent to limit the potential for future labour shortages and pay pressures. The increase in the number of high-quality apprenticeships and the ongoing recruitment pressures faced by employers should mean that the pathway to sustainable employment will be within the reach of more young people.

“However, employers need to support this recruitment drive by ensuring that they have the people management practices in place to support the effective utilisation of skills, which is critical to job retention and productivity. The UK has the second highest level of over-qualification in the OECD and unless more employers get better at putting their people’s skills to good use, efforts to boost their and the UK’s productivity will be critically undermined. Looking further ahead, the introduction of the ‘National Living Wage’ may boost the attractiveness of employing workers aged below 25 further, which could see young people reverse recent trends by becoming the new winners in a new era for the jobs market.”

Pay becomes polarised

While prospects for young people have improved, the CIPD’s report highlights an increasingly polarised picture for wages. It shows a continuation of the clear gap that exists between workers that have comfortably exceeded the current inflation rate in their pay packets, those who have received modest increases or none at all, and the majority of workers who exist in the middle.

Davies comments: “At one end of the spectrum, workers in occupations where there are skills or labour shortages and thriving sectors such as finance and construction seem likely to get pay increases well above current inflation. However, at the other end of the scale, many workers in areas such as manufacturing and public sector, are seeing only a very modest increase in living standards. In-between, the bulk of workers will continue to see moderate growth in their pay packets but with inflation expected to stay low, they should still feel the benefit of any increases.”

The Labour Market Outlook finds that the level of median pay awards anticipated by employers for the next 12 months has edged up from 1.8% to 2%. Looking back over the last year the median basic pay award is also 2%. The CIPD data and analysis suggests that the increase in average earnings in recent months highlighted in official statistics may be inflated by a number of factors. These include a disproportionately large increase in the number of people in full-time employment, a relatively large above inflation increase in the National Minimum Wage and perhaps most significantly, workers in thriving industries or key roles which are in demand where workers can earn a premium.

In the year to June 2015, almost a quarter of employers gave an increase of at least 3% while almost a fifth froze pay. Just 16% of employers raised wages in response to recruitment challenges. Looking ahead, a fifth of employers, mainly drawn from the private sector, say that their organisations will award a pay increase of 3% or more in the 12 months to June 2016. Meanwhile, fourteen per cent plan to freeze pay.

Employer confidence continues

The Labour Market Outlook also suggests that employment confidence looks to remain strong over the next three months. This quarter’s net employment balance – which measures the difference between the proportion of employers who expect to increase and those that intend to decrease staff levels – has increased to +29, up from the +24 reported in Spring 2015.

CIPD - 100 yearsWrong. That’s what many employers may think, but youths have a range of talents that can complement an organisation’s workforce.

A great new initiative from the CIPD and Inspiring the Future highlights the issues with youth unemployment, not just for the young individuals themselves but also for the future growth of businesses. Whilst UK unemployment is falling, the statistics for youth unemployment have barely changed – there are still 958,000 16-24 year olds looking for work.

Many employers do want to hire youths, and this bodes well with their Corporate Social Responsibility policy, but the challenge is HOW to do this effectively.

On the flipside, young candidates struggle with HOW to be considered for a job. How can they grab attention with their text CV when their qualifications are going to be similar to their socio-economic peers applying for the same jobs? Graduates with 2:1 degrees may pitch for a different level of job to non-qualified candidates but the issue of getting noticed is the same. At this young age, there’s no real work experience to speak of, so what will the employer be looking for when sifting through hundreds of CVs?

It’s hugely demotivating for candidates who submit their CV for jobs and are constantly rejected. In spite of all the advice that is written about how to compose a CV – what to include, how many pages etc, the CV screening process can feel like a lottery.

Failing to deal with youth unemployment now is creating a ticking time bomb of skills shortages

As shown in the excellent ‘HR Inspiring the Future’ video, employers who do recruit young people say ‘they bring fresh ideas’ and ‘think outside the box’. Businesses need to overcome the headache of HOW, and find ways to ‘connect’ with youth talent. Short video interviews that candidates can record for the employers review is certainly one way to address this issue. Most 16-24 year olds will readily embrace video using their smartphone and tablets as a means to get noticed.