What the Plan for Jobs means for student employers

Jul 13, 2020 | Sector & policy

ISE’s Tristram Hooley breaks down the recent announcements by the Chancellor and explains what they mean for your business.

The big news from Wednesday’s summer statement was that Rishi Sunak is giving us all a half price Nandos in August. But, while The Sun are focusing on how to get the most out of Rishi’s meal deal, I wanted to break down some of the aspects of the Plan for Jobs that directly relevant to student employers.

Why did we need a Plan for Jobs?

As our research has shown, Covid-19 and the lockdown have had a big impact on the student labour market. This is part of a wider depression of the labour market that many expect will get worse as the UK economy goes into recession. The dire current state of the UK labour market coupled with fears about recession have led many organisations and experts to call for the government to take action to avoid mass unemployment. Last week ISE published a plan for the reconstruction of the student labour market, to influence government’s response.

The Plan for Jobs was the government’s response to these concerns and broadly delivered the kind of stimulus package that ISE and others had been calling for (see The Guardian’s summary). Since its publication commentators have been musing on whether it is big enough to do the job (see commentary from The Guardian, The Financial Times, the Institute for Employment Studies and me). Broadly the consensus is that the Chancellor has done the right sort of thing, but that it might not quite big enough to do the job. Of course there are plenty of people who argue that he shouldn’t have done some things and that he should of done others, and there is a legitimate critique that this might do more for better off people than those at the bottom of the income distribution. But, the big question is, is this enough, and will it work?

I’ll leave you to muse on the political and economic questions and move on to look at what it might mean for student employers.

Implications for student employers

The Plan for Jobs includes three and a half policies that student employers will really need to pay attention to and quickly formulate a response to.

  • Let’s start with the half. One of the key policies introduced by the Chancellor is the Job Retention Bonus. This is a £1000 payment to employer for each member of furloughed staff who remains continuously employed until the end of January. The idea is to encourage firms to bring back furloughed staff. While this policy is probably outside of the direct responsibility of the student employment team, it will shape and indicate the context for recruitment in your firm. Broadly speaking some firms may decide to reduce recruitment in favour of the retention of existing staff. Whether the £1000 bonus makes this more likely remains to be seen.
  • The first substantial policy that you will need to take a decision on is the Kickstart Scheme. This scheme would provide your firm with funding to take on an unemployed young person for six months. The government would pay all of the costs (up to 25 hours a week). Clearly, this is, to some extent, money for nothing, and so might be appealing to some employers. It gives you the opportunity to try new staff before you employ them and getting involved in the scheme is also likely to be seen as a socially responsible move by employers. But, on the other hand it may drive your recruitment in a direction that doesn’t fit with your strategic planning. Furthermore new, young, recently unemployed, temporary staff are likely to need a lot of supervision.
  • The second policy that you will need to take a position on is traineeships. Traineeships are a pre-existing framework for providing jobs with training. They are lighter and often lower level than an apprenticeship, but share a number of features in common with apprenticeships. The Plan for Jobs will pay employers £1000 for every trainee that they take on. So, a key question for you is whether you already employ trainees and, if not, whether the incentive scheme will drive you in this direction.
  • Finally, the government are offering a £2000 incentive for every new, young apprentice that you take on. Again the question is whether this incentive will help you to either maintain your apprenticeship programme at a higher level than you otherwise would have done or encourage you to introduce apprenticeships for the first time.
    As this list demonstrates there is quite a lot for student employers to think about. Each firm will be weighing up the pros and cons of engaging with each of these policies over the next few months.

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