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SMEs need to be at the helm of the youth unemployment issue

Posted on by from CIPD

Research shows that large employers are increasingly helping with the youth unemployment crisis, where as small to medium-sized employers seem to be lagging behind. Annie Peate, policy officer at the CIPD, addresses the issue and reveals why young people can produce real benefits for your business.

Larger employers vs SMEs

The latest Labour Market Outlook from the CIPD uncovered evidence of a growing trend which may spell good news for young jobseekers and school and college leavers. It seems that organisations are increasingly turning to young talent to address their skills gaps, with a third (33%) of those reporting hard-to-fill vacancies planning to hire more apprentices (compared with just 22% in Spring 2014) and 26% and 12% considering hiring graduates and school leavers respectively.

This trend is a positive sign that more UK employers are recognising the importance of recruiting and developing young people if they are to remain competitive, innovate and grow; for young people too there are tangible benefits, including an increased number of pathways and opportunities – including vocational – open to them and improved employment prospects.

However, despite this good news there is still more to be done, and not all employers should be resting on their laurels just yet. A survey conducted as part of the CIPD’s Learning to Work program, which promotes the role of employers in reducing youth unemployment, found that while large employers are increasingly doing their bit (with 86% reporting that they had recruited at least one young person last year) small and medium-sized employers (SMEs) are lagging behind, with only half having hired someone aged 16-24 in the last 12 months. A similar picture can be seen in levels of SME engagement with schools and colleges, with only 38% offering opportunities to young people to experience the world of work or provide employee volunteer support, compared with 70% of larger organisations.

Addressing the issue

This is a troubling reality as SMEs currently account for around 99.9% of private sector companies in the UK and are responsible for the lion’s share of future private sector job creation. By limiting employment opportunities and pathways into employment and not offering vital opportunities for young people to gain unique insight into the SME world – including the range of industries they operate in and the diverse roles many offer – SMEs may miss out on attracting and recruiting enthusiastic, talented and skilled young people.

For SMEs there can be many challenges to engaging with young people, including limited resources or time or trouble identifying where the skills of a young person might benefit the business. However, there are simple things they can do to ensure they attract and recruit tomorrow’s talent, including:

  • Working with the Small Business Team at the National Apprenticeship Service to introduce an apprentice into the business, or exploring other ways to offer more entry routes to young people
  • Working with local schools and colleges to offer work experience placements to students and taking up opportunities to visit careers fairs and assemblies to talk about  available opportunities
  • Regularly reviewing recruitment processes to ensure they are simple, effective, transparent and most importantly ‘youth-friendly’ (see the CIPD guide top tips for recruiting young people

Successful growth

As we continue to champion better work and working lives, we intend to harness the agility of small businesses to encourage and support more young people into work. In July 2015, the CIPD launched a practical tool for SMEs in partnership with Apprenticemakers, providing practical step-by-step advice on finding, employing and managing young people.

The CIPD, with support from the JP Morgan Chase Foundation, is also running a 12 month programme – People Skills – providing free, expert HR advice to SMEs in three target areas (Hackney, Stoke-on-Trent and Glasgow) and promoting apprenticeships and work experience as key to the successful growth of SMEs.

Annie Peate

By Annie Peate

Policy officer at the CIPD.

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