Tax breaks needed to encourage employers to hire non-graduates

Tax breaks should be given to employers to encourage the hiring of young non-graduates and help tackle unemployment, industry experts have argued.

It follows a call by the Association of Graduate Recruiters this week for graduate employers to be given financial incentives such as tax breaks to encourage firms to open up more vacancies to graduates.

Employers’ groups welcomed the proposals but warned that, in the current climate, young, non-graduates were in a weaker position.

John Philpott, chief economist at the Chartered Institute of Personnel and Development, said: “The problem at the moment is because of scare resources, graduates have been hit hard by the recession, but they are not the group of young unemployed who have the greatest need.

“We know that a lot of graduates are taking non-graduate jobs, which is making life more difficult for the non-graduates. You would probably want to favour the non-graduates [for the tax breaks] who are in a weaker position.”

Jonathan Cawthra, group resources director of housing association Affinity Sutton, said he would prefer to see incentives to recruit the long-term unemployed and, in particular, young people who have never had the opportunity to experience a real job and start their careers.

“We’ve got plans to recruit something like 40 young people through the future jobs fund, and among them there’s a wide range of educational achievement up to and including graduates,” he told Personnel Today. “We’ve also run our first graduate-level management training programme.

“Out of these two recruitment programmes, one (the future jobs fund) attracts funding while the other doesn’t, and without that funding we wouldn’t have given those 40 young people this chance to make a start. We’ve already recruited one permanently and I wouldn’t be surprised to see more follow in his footsteps.”

Sara Reading, head of graduate recruitment at KPMG, described tax breaks for graduate employers as a “positive thing”, but added it would have a much bigger impact on smaller companies.

“In terms of KPMG, we are not prohibited by the expense of recruiting, hiring and training graduates. For smaller companies, who only take one or two, it would be incredibly attractive for them. Offering more formal graduate jobs for people will make going to university more attractive, if you know there’s a better chance of coming out and getting a graduate job.”

In January, the government launched its Apprenticeships for Employers scheme, which offered 5,000 grants to small businesses who could take on unemployed 16- and 17-year-olds.

A spokesperson for the National Apprenticeship Service said: “The scheme has got off to a flying start and small employers have now committed to taking on more than 5,000 unemployed 16- and 17-year-olds. Focus has now turned towards attracting more eligible learners to take up these posts. Young people are currently being matched into roles, but we still need many more to come forward.”

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