Recent government employment figures, coupled with the latest research from the Chartered Institute of Personnel Development (CIPD), have highlighted just how hard the Covid-19 pandemic has impacted the employment prospects of young people aged 16-24.
According to the latest figures from the Office of National Statistics (ONS), there are now nearly 620,000 young people claiming Universal Credit – almost double (95% increase) the number in the previous 12 months.
And the forecast for this changing is looking extremely bleak.
The CIPD have recently published a report highlighting how less than half of businesses (46%) are planning to hire from within the 16-24 year old age group in the coming 12 months.
The “COVID-19 and the Youth Labour Market” report also established that a further 30% of employers didn’t know whether they would hire from this age group.
These figures make for stark reading for young people and their ability to find employment. This is compounded by many of the sectors employing young people, such as the hospitality and leisure industries, being the worst affected by the Covid-19 pandemic. The CIPD have also highlighted how previous recessions provide evidence of the damaging long-term consequences of a period of unemployment to young people’s future earnings and employment outcomes, as well as their mental and physical health.
It’s clear the Government is concerned for this age group as they have launched and updated a number of initiatives which are outlined below. These are all aimed at supporting young people to acquire the training and experience required to boost their future employment prospects.
1. Kickstart Schemes
Announced in July 2020, the Kickstart Scheme is a major new government initiative aimed at creating a large number of new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment.
The purpose of the job placements is to support the participants in developing the skills and experience they need to find permanent work after completing the scheme.
The government will fund 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum automatic enrolment pension contributions. There is also an employer grant of £1,500 per job placement available for setup costs, support and training. Once a job placement is created, it can be taken up by a second person once the first successful applicant has completed their 6-month term. If an employer wishes to recruit less than 30 young people, they must apply for the scheme via a government approved Kickstart Gateway.
This is a fantastic opportunity for qualifying employers to support young people at minimal financial cost. It is effectively free labour for 25 hours a week per participant. Download our free Kickstart Scheme Guide for further information and to find out if you’re likely to qualify. Alternatively, you can Register your Interest and as an approved Kickstart Gateway, we will get in touch to discuss submitting a Kickstart Scheme application on your behalf.
From August 2020, the government apprenticeship grants available to firms hiring new young apprentices have also been increased. Prior to this, the government only paid a £1,000 grant as an incentive to employers for hiring 16 to 18 year-old apprentices.
Whilst this is still in place, the government is now offering a £2,000 grant to any firm that hires a new young apprentice aged 16 to 24, and £1,500 for any new apprentice over the age of 25. This means there is a total grant available of £3,000 to organisations for every 16 to 18 year-old apprentice they hire.
The government firmly believes in the effectiveness of apprenticeships, with Chancellor Rishi Sunak, stating, “We know apprenticeships work. Ninety one per cent stay in work or go on to further training”. So much so in fact, that they have extended the grant funding for apprenticeships from the original six month period (until January 2021) to the end of March 2021.
Similar to the Kickstart Scheme, traineeships provide the opportunity for young people to develop the skills and work experience required for future employment prospects. Since 2013, the government have been providing a £1,000 grant per learner (up to a maximum of 10 learners), to firms offering traineeships for 16 to 24 year-olds (or 25 year-olds with an education, health and care (EHC) plan).
The traineeship can last from anywhere between 6 weeks to 12 months and the government meet up to 100% of the training costs through approved training providers. The employer does not have to pay the learner any salary, although some reimbursements for travel and/or subsistence expenses are usually provided.
However, despite the low cost to an employer of taking on a learner, there does appear to be a distinct lack of awareness and/or take-up of traineeships. The CIPD’s report shows that only 8 per cent of organisations who were previously not planning to offer a traineeship are doing so now. Additionally, despite launching in 2013, a third of employers (35 per cent) admitted that they had never heard of traineeships.
The current outlook for the majority of employers remains challenging with no imminent end to the pandemic in sight, despite the rollout of the vaccine. Nevertheless, the government funded initiatives outlined above, do provide some great opportunities for employers. Acquiring additional resource at very little cost should always be embraced, whilst also providing the employer with a “feel good factor” of supporting young people at a time when they need it most.
We are a government approved Kickstart Gateway and have made hundreds of successful applications on behalf of clients for Kickstart Scheme placements.
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