Institute of Student Employers proposes plan to stimulate youth unemployment

Employers should be incentivised to recruit graduates and apprentices to avoid mass youth unemployment and help businesses regain confidence and work effectively, reports the Institute of Student Employers (ISE).

ISE has been working with employers, educational providers and labour market intermediaries since the beginning of the crisis to help them manage the impact of Covid-19 and how students transition into employment.

Despite employers transforming recruitment and development processes, entry-level jobs will be cut by nearly a quarter this year due to coronavirus. ISE calls for government to work with employers and put in measures to increase their capacity to hire young people.

ISE’s ‘Plan for the reconstruction of the student labour market’ includes offering a wage subsidy for all new apprentices under 24 to cover the costs of the 20% of time that they are required to spend studying ‘off the job’.

Cutting national insurance contributions for staff under 24 for a year and offering an incentive to employers who offer work experience is also proposed as well as freeing up the apprenticeship levy so that it can be spent on related costs such as recruitment, travel and management.

The plan stresses the importance of ensuring the labour market runs effectively throughout the crisis. It recommends reporting on diversity to address inequalities and providing additional support to regions and industries that are particularly hard hit by the crisis. Delivered to Local Enterprise Partnerships and sector bodies, they would ensure that no area or industry becomes a ‘no go zone’ for young people.

ISE is also calling for support to help young people transition into the labour market including resources for educators, access to career guidance and funding for young entrepreneurs as well as a maintenance allowance for those choosing vocational education.

ISE chief executive, Stephen Isherwood said: “The labour market is breaking down. There is a looming youth unemployment crisis and employers are already facing pressure to slow down or stop entry-level recruitment and slash training costs. These decisions will disproportionately impact young people.

“Employers need support to invest in entry-level talent, to recruit and develop young people. The public purse should be used to provide opportunities for young people rather than leaving them to languish unskilled, out of work and left behind.”

Deborah McCormack, ISE chair and head of talent for Pinsent Masons commented: “No single measure will be sufficient to stem the loss of a generation of talent. We need a pragmatic package of support from government to help employers and educators enable our early talent, future-proofing the UK economy.”

Keith Herrmann, degree apprenticeships consultant to UA92 said: “The ISE’s proposals for government to guarantee access to career guidance for young people is vital to support a generation of young people leaving our schools, colleges and universities who will need to make very difficult choices about jobs, apprenticeships and further study. We cannot betray this generation their futures. Further government investment in our young people is a Covid-19 imperative.”

Jayne Rowley, head of Prospects at Jisc said: “We support the ISE’s plan to help stimulate the student jobs market. The challenge facing young people in an uncertain jobs market as we come out of the pandemic is enormous. It will take sustained and combined support from government, employers and educators to ensure that they have access to opportunities to begin their careers.”

Simon Reichwald, strategic lead for talent at MyKindaFuture said: ”Reconstruction is not just about infrastructure projects but people. Young people, and especially under represented young people, are always hardest hit in times like these. Smart thinking and actions around, for example, the use of the levy is an easy win for government and will support employers do what they want to which is hire more apprentices.”