Business backs new Youth Contract
On 5 January the CBI hosted a new year discussion on the forthcoming Youth Contract with Deputy Prime Minister, Nick Clegg, Minister for Employment, Chris Grayling and senior representatives from UK’s leading big businesses.
The Youth Contract is the centre-piece policy to reduce youth unemployment. It aims to build bridges between young people and employers.
Employers are central to the Youth Contract, and it will only work with their engagement and enthusiasm.
The contract is that the Government provides a wage subsidy to recruit young people, and employers then keep the young person on and develops that young person in the job, after the subsidy ends. In return the young person is asked to commit to the job opportunity they’ve been given through the Youth Contract or risk losing their benefit.
Ken McMeikan, Chief Executive Greggs, said
"There is a need for business leaders to step up to this challenge and offer meaningful placements that can be turned into sustained positions through work experience. In return young people should be ‘fighting for these jobs’."
The Youth Contract builds on what works, in particular Work Experience placements, introduced last April. Employers praised Work Experience, as it gave the employer time to consider the attitude and ability of the young person, and for the candidate to see if they liked the employer.
"The Youth Contract is good news for young people up and down the country. It will encourage firms to give a young inexperienced person a chance so that the scourge of youth unemployment can be tackled.
"We sincerely hope that employers of all sizes looking to hire staff will see the Youth Contract as a real incentive to invest in our young people."
John Cridland, CBI Director-General
The Youth Contract is the Government’s response to the challenge of youth unemployment. It aims to build on the fantastic support many employers have already offered to the Government by committing support and vacancies for young jobless people. Since summer 2011 over 100 businesses in the UK have wholeheartedly backed Work Experience and other measures – the Youth Contract uses this support and enthusiasm as its foundation.
"The aim of the Youth Contract is to ensure that all jobless young people are earning or learning again before long term damage is done."
Nick Clegg, Deputy Prime Minister
"Businesses are vital for us to get our support for young people right. With their input we can ensure young people gain the experience and the training to gain sustainable employment."
Chris Grayling, Minister for Employment
Key themes for employers
Key themes for employers were:
- Ensuring young people have the right employability skills and job readiness.
- Making sure the Youth Contract is simple and straightforward for employers to administer.
- How Youth Contract could be delivered across different geographic areas (eg England, Scotland, Wales) and through different Work Programme providers.
- How the links between the education system and starting employment can be simplified for young people making the transition, and for employers who are recruiting.
Employers taking part in the discussion, told Ministers the Youth Contract was a fantastic opportunities to engage employers, because so many are already passionate about tackling youth unemployment. Many firms are already doing their bit to help young people, without any Government incentive or intervention.
Representatives from the Hilton and Intercontinental hotel chains, plan to use the forthcoming Youth Contract offer as an enhancement of what the sector is already doing to help young people get their foot in the jobs market. Intercontinental Hotels are working with Business in the Community to set up four academies to offer careers advice and recruit directly with schools.
Asda said that behind each work experience placement that Asda offers, it makes sure there’s a real vacancy which can also be linked to a training course like City & Guilds. Employers said colleges and training providers also needed to allow employers the freedom to design their own training needed for the job.
The Deputy Prime Minister and Minister for Employment were keen to explore with these large employers what key things the Government could do to get employers on board, and asked if bureaucracy was one of them. In setting up Work Experience placements last year, Minister for Employment gave the example of where he had reduced the 8-page Health and Safety guide into one paragraph.
CBI said, ideally, employers want a ‘one-stop shop’, to accessing Government support. It shouldn’t be a hassle to recruit and run an Apprenticeship scheme for example, but the British Retail Consortium said many large retailers find that the rules, regulations on apprenticeships tough, and too complicated for medium and smaller employers to engage with the paperwork and legal guidance.
Some employers mentioned that having strong local partnership, working with Jobcentre Plus and other local employers can make a real difference to reducing some of the bureaucracy. Geoff Dunning, Chief Executive of the Road Haulage Association, encouraged Small Medium Sized Employers, or SMEs, to work together in collective recruitment for Work Experience placements. BT representative, Caroline Waters, said if there isn’t an opportunity within their own organisation then firms should proactively offer those work-ready young people to partners in their supply chain.
The Minister for Employment emphasised that the Government wants a simple payment process for Youth Contract. Some employers operating in several outlets across the UK favoured a centralised model of administration. Paying these large scale employers the subsidy in several instalments would create administration costs with each payment. Smaller or medium sized enterprises however could benefit from more regular, smaller payments.
Education and skills
Businesses saw a great opportunity for businesses to get more into schools, to reinvigorate Business in the Community.
Steve Fox, Chief Executive of construction firm, BAM Nuttall, added that there were problems with the standards of children coming through the education system, and was concerned that the school system is too academic and geared towards achieving OFSTED marks, rather than preparing young people for the world of work.
There was a strong consensus among employers, and echoed in particular by IT giants Hewlett-Packard, that the skill levels of young people entering Work Experience is worrying, in particular ICT skills, and the failure to see the real-life application of technology. Caroline Waters Group Director at BT said “The UK needs an ICT literate workforce.”
The Deputy Prime Minister, agreed:
"We need a careers service that is better, inspiring and innovative."
Sarah Gaeter Chief Executive, talkbackTHAMES, went further to say, businesses should take the lead in giving careers advice.
Nick Wilson, Vice President, Hewlett-Packard said:
"Employers and business must take up the challenge, get into schools and let children know the skills needed and expectations of going to work."
For many employers it is the attitude of young people, rather than necessarily their qualifications that matters. Children are missing some essential skills, including mental resilience, the ability to form working relationships and work in teams, the ability to communicate, and the ability to get on with people. Applying knowledge is as important as acquiring knowledge.
Make a tangible difference
Concluding the event, CBI’s John Cridland said, it was now time for employers and Government, collectively, to put their shoulder to the wheel to ensure the Youth Contract makes a tangible difference.
DWP will continue discussions with business representatives, including smaller and medium sized employers, in the coming weeks and months.