Reaping the benefits of recruiting young people

Fear of red tape and confusion around funding means many businesses fail to recognise the benefits of recruiting young people, when in fact they can help push growth. Jo Faragher reports.

When technology company Fujitsu began recruiting apprentices into its business, corporate social responsibility (CSR) was very much front of mind. “Our CEO at the time was an ex-apprentice, so there was plenty of traction from above, and it was good CSR,” explains Sarah Bampton, talent programme manager.

But bringing young people into Fujitsu also fulfilled a very important business need: the IT sector suffers from a lack of skilled science, technology, engineering and maths graduates, so getting more school leavers on board meant the company could build up its talent pipeline for the future. Now around a quarter of Fujitsu’s apprentices are between 16 and 18, and they are among the most engaged workers in the company.

However, despite success stories such as this, employers are still reticent about investing in young people, particularly straight from school. In Personnel Today and learndirect’s recent research into recruiting young people, almost nine in 10 employers said they felt school leavers were not ready for the world of work at 16, and 70% had no plans to take a young person on straight from school this summer. Of that 70%, four-fifths said this was because they didn’t have any suitable vacancies or opportunities.

One of the biggest barriers, according to Steve Morris, business development director at learndirect, is a “lack of information and clarity” around the support available and the benefits that apprenticeships can bring. “For small and medium-sized businesses in particular, the business benefits are being lost under the perception apprenticeships are time intensive and shrouded in red tape,” he says.

Productivity boost

According to the National Apprenticeship Service, almost every (96%) employer reports a benefit to their business when they have taken on an apprentice, while 72% have reported an increase in overall productivity. There are “softer” business benefits too, such as improved staff morale and better retention. As the economy moves into recovery mode and certain sectors report candidate shortages, there has arguably never been a better time to invest in youth employment programmes.

From a cost perspective, apprenticeships should offer an easy entry point to develop and nurture new talent. Training costs tend to be covered, businesses of up to 1,000 employees can be eligible for a £1,500 grant to cover starting costs, and apprentices need only be paid the relevant minimum wage.

However, our research revealed that 52% of respondents who had not taken on an apprentice felt they needed more help with accessing and understanding these funding mechanisms, and 43% wanted more information about the range of apprenticeships available.

Jez Brooks, professional development manager at IBM, says confusion around funding is a real concern for some employers, particularly with further changes to how the schemes are administered supposedly in the pipeline. “If the Government tries to force through changes, this could cause a dip in bringing new people in,” he says. “Training providers will have to review what they deliver, and that will have an impact. The piece around funding is still to be determined and this could put some employers off.”

Managing the process

As it stands, how employers access funding for apprenticeships depends on the size of their business and preferred delivery model. Employers can choose to deliver and manage the whole process in-house, or choose to outsource everything (including arranging the funding) to a training partner or partners, or something in-between. In most cases, the funding goes directly to the college or training provider, although a few, very large employers have their own delivery contract and receive the contribution directly.

For many employers, the process can seem quite daunting, so learndirect has produced a free and impartial guide, which aims to address any of these issues. “Apprenticeships can be a really cost-effective way for employers of all sizes to develop and nurture new talent. However, it’s clear from our research there’s still more work to be done to help businesses access the information they need around funding and the types of apprenticeships available,” says Morris.

In addition, there are a number of practical measures employers can make to ensure that they get the best from their investment in apprentices. The recent Learning to Work report published by the CIPD revealed that an increasing number of employers are seeing the business case of taking on young people and are adapting the way they work to make it easier to recruit and settle in apprentices and trainees. “This might not always mean creating new jobs, but redesigning existing opportunities in a way that makes them suitable for young people without significant work experience, or offering routes that combine work and learning,” says the report.

Easing the transition

The report also highlights how making changes to recruitment practices (such as changing interview techniques so they focus on scenarios or strengths rather than experience) and how staff are welcomed into the company (ensuring young people have “buddies” and/or mentors when they join so they can ask questions) can help smooth the transition between school and work. “There’s now more understanding of what employers need to do to ease that transition,” explains Katerina Rudiger, head of skills and policy at the CIPD and author of the report. “There needs to be dedicated support, you can’t just bring them in and say ‘off you go’.”

She adds that many businesses that started taking on young people as they felt it was the “right” thing to do are now seeing tangible business benefits such as savings on recruitment or positive outcomes for staff retention. And in some companies, such as telecommunications company Telefonica, bringing young people on board fills a growing need for digital skills. “Without these skills they simply can’t run their business,” adds Rudiger.

British Gas, meanwhile, has incorporated apprenticeship programmes into its long-term workforce planning. It operates a five-year programme where two years are spent on the formal apprenticeship, but apprentices receive refresher training in years three, four and five to ensure their skills are up to date.

According to the CIPD, this marks a shift in mindset in employers towards offering “high value” experiences of the world of work for young people, rather than expecting them to leave school pre-equipped with the ability to manage themselves in the workplace. “These organisations have discovered the business benefits of engaging with young people this way, including accessing a wider range of talent, the introduction of fresh and challenging ideas, and improving employer brand and recognition,” explains the report.

In any organisation, the likely success of an apprenticeship will be improved if a young person has already had some exposure to life at work. Research from the Education and Employers Taskforce found that young adults who encounter four or more employers while at school are, on average, 20% less likely to be NEET (not in education, employment or training).

Exposure to employers

Providing formal or informal opportunities for work experience, or offering one of the recently launched pre-employment traineeship programmes, can be a useful stepping stone into working life and improve employers’ chances of success when bringing young people into their business.

Again, however, our research showed that awareness of these types of opportunities was poor – 70% of respondents had not come across traineeships, which are currently only available in England. More than half said they would consider offering work experience to school leavers if financial incentives were offered.

For smaller businesses, the upfront investment of time in recruiting an apprentice may feel even more daunting. But for the young people themselves, the experience can be far richer because they are likely to be exposed to lots of different scenarios that will help them develop in their role.

Mike Rogers, managing director of Rogers Restorations, an electrical business, offers both traineeships and apprenticeships.

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For him there are multiple benefits to his business: “Not only do we want to help young people in Somerset, but as a business we want to bring in fresh talent and ensure we are contributing to the continued skills development in our sector,” he says.

With greater clarity around how to access support and funding for apprenticeships, many more businesses could be using youth employment programmes as a way to boost productivity now and in the future.