Keith Herrmann, member of the ISE Research and Policy Steering Group and consultant to UA92, considers what employers, universities and policymakers can do to support young people entering the labour market this year.

The latest economic data makes for challenging reading: Universal Credit claims in April went up by 856,500 to 2.1 million; unemployment to the end of March is 3.9% and expected to rise further in the months ahead; vacancies were down by 170,000 between February and April. This is the context in which the latest ISE research on job prospects for the corona Class of 2020 needs to be understood.

Furthermore, we know from research by the Resolution Foundation that 9% of those aged between 18 and 24 have lost their jobs altogether, the highest of any age group, and an additional 600,000 may be unemployed this year. The Institute for Fiscal Studies (IFS) has found that under-25s are nearly two-and-a-half times more likely to work in a shutdown industry sector under lockdown, in sectors such as retail, leisure and hospitality.

Now we know for sure ‘the future is not what it used to be’… a lovely phrase taken from a McKinsey blog on the shape of our ‘new normal’ economic future.

The latest ISE employer survey emphasises the scale of the challenge ahead with respondents saying that this year, due to coronavirus, they plan to:

• Recruit 12% less graduates than they were going to before the Covid-19 crisis;
• Recruit 32% less apprentices and school leavers; and
• Recruit 40% less interns and placement students.

So what can be done now to tackle a possible record rise in youth unemployment and the potential long-term scarring effects on their career prospects and future earnings?

First, we need to learn from the past. The Resolution Foundation published a report last year on the long-term effects of the 2008-09 crisis. It found:

“…people starting their careers in the midst of a downturn experience a reduction in real hourly pay of around 6 per cent one year after leaving education, and that compared to people who left education in better economic conditions their wages do not recover for up to 6 years. For those with lower levels of education, the chance of being in work falls by over 20 per cent, while for graduates the chance of being in a low-paying occupation rises.”

With this in mind, what can we do for graduates and school-leavers entering the labour market this summer?

What can universities do?

1. Many are actively supporting their graduating students through their careers services. Through AGCAS they are part of NextStepSupport.org, a partnership between AGCAS, ASET, ISE, GTI and The Student Room to provide a central website which offers a free resource for careers support, virtual events and skills sessions, and to advertise work opportunities for graduates.
2. Universities can use their online graduation ceremonies to promote the support available to graduates through their careers service.
3. Universities can scale-up their alumni mentoring programmes to better connect graduates to the world of work.
4. Universities can re-direct their budgets for access and participation to help graduates from economically disadvantaged backgrounds. They can fund graduate development coaches to focus careers support on these graduates. They can support those who may not have access to broadband or a quiet place at home to do online assessments and job interviews – the ISE research indicates many more employers have moved their recruitment online.

What can employers do?

1. Employers should think creatively about how they can reach out to graduates who may not have easy access to broadband and hence online recruitment facilities.
2. Given the shift to digital, employers must be challenged to work actively with a wider range of universities, colleges and schools to ensure they broaden the net to capture a wider range of talent than they would normally do.
3. Employers can work with universities, colleges and schools to participate in virtual careers fairs, offer virtual work experience and support careers advisers to help young people make informed choices about industry sectors less affected by the current economic lockdown.
4. Despite the challenges highlighted in the ISE research, employers can work with government and the ESFA to minimise the negative impact on the number of apprentices retained and hired in the year ahead so that we retain this option for young people as a route into employment and for adult workers to upskill.
5. Employer bodies and sector organisations, including the CBI, the British Chambers, REC, CIPD and the union movement can bring their social media machinery to support the NextStepSupport.org platform to boost student and employer engagement and maximise access to opportunity.

What can policymakers do?

1. The Prime Minister has announced that the government will be supporting young people with a ‘new national skills fund’ worth £2.5bn. The ACEVO Commission on Youth Unemployment offers a useful template for addressing the challenges our young people face. It suggests 4 key action areas: (1) the immediate shortage of jobs; (2) preparation for work; (3) transition from education to work; and (4) support in the labour market. The new youth skills fund should learn the lessons from the previous financial crisis to best support young people in the education system, those entering the labour market and those Not in Education (NEETS) who have limited access to support.
2. Establish a national framework for stakeholder engagement that brings together policymakers and leaders from the regions, from our largest cities and across key industry sectors. Alongside government, they should lead a national skills training scheme for young people. These should focus on (a) equipping our young people with the skills needed for a world of work framed by the upcoming Industrial Revolution 4.0 and (b) be directed to projects that help young people use their skills to help meet our commitments to the environment (as per the Paris Climate Agreement).
3. Recognise the value of partnership. An example of this is the Careers Alliance campaign which previously brought together employers, the education sector, training and skills providers and the careers sector to help our young people make informed choices about their career options. A similar approach must be taken for the new national skills fund.
4. Use the coronavirus pandemic to re-frame the economy to ‘level up’ opportunity beyond London and the South East. Taking a ‘what works’ approach policymakers can resurrect regional talent retention schemes from 2009-11 to ensure that young people are supported to either remain in the education system (skills vouchers), gain access to training that supports their work readiness or through a job subsidy scheme gain access to 6-month work internships, especially with SMEs.

Yes, we must address the immediate shortage of jobs for our young people, but we must also offer them a vision for the future that extends beyond the current crisis. We have a chance to act now. These proposals offer some ideas for action now. Reinforcing the findings by the ISE, a new report by the Learning and Work Institute summarises the challenge ahead:

“Failure to take urgent action risks further entrenching the geographical inequalities the Prime Minister pledged to narrow and creating a ‘pandemic generation’ of young people with poorer education and employment prospects. The longer someone is out of work, the more long-term damage is done to their career prospects and the economy.”

Read ISE’s latest report Covid-19: The impact of the crisis on student recruitment and development