Wage incentive scheme available to all employers of young people

This, combined with the fall in unemployment rates announced by the ONS last week, especially amongst young people, has given rise to cautious optimism. 

It seems that the self-perpetuating cycle of youth unemployment might just be starting to diminish. There is a serious risk looming for businesses in the future if we have a working age population without the skills needed for the working world. This programme proposes to help young individuals develop and match them with employers looking for young talent. They are offering quality learning on the job, while preparing people to improve and succeed in their careers. But is all this just empty idealism? 

The results from the ONS survey last week showed that youth unemployment had fallen to the lowest figure since early 2009. Minister for employment Mark Hoban has understandably welcomed these results as a testament to the vitality of the government’s Youth Contract Scheme. 

The incentives are evident enough: a £2,275 subsidy for employers who take people off the dole queue, a £1,500 grant for small firms taking on apprentices and £2,200 for businesses who hire “neets” — teenagers not in education, employment or training.

Despite the positive steps there are limitations. A recent survey by EEF, the manufacturers’ organisation, found that none of its members who answered were taking part in the initiative. A third had not even heard of the Youth Contract. Nearly half knew about it but had no plans to be involved and only one in five was considering whether to take up the offer. 

There are further concerns that local authorities are not engaged enough with the programme and giving it enough publicity, meaning that the programme is failing to help the young people it was designed to help. Our experiences with a wide range of employers suggests that smaller businesses often value finding the right candidate to hire above saving money. Financial incentives will only sway a small proportion of businesses and, even then, only at a period of their growth where they feel they have time to invest in training.

Mark Hoban’s initiative will make valuable improvements in the key areas of both youth unemployment and slow growth across UK businesses. But the impact will be limited.

Even for the most qualified graduates the job market is unpromising. The stigma of job seekers’ allowance remains and the scheme does nothing to help the vast numbers of young people who are unemployed, interning unpaid or underemployed. Businesses must help find jobs for young people currently on Job Seekers work in order to challenge the view that young people without, for example, degrees or extensive work experience, are not of value.

Rob Blythe is co-founder of graduate recruitment agency Instant Impact.

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