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Taclking youth unemployment - the mismatch of skills

By Richard Halstead on Sep 21, 12 09:52 AM in Economics

The recession has rightly focussed attention on the need to address youth unemployment. But it is easy to forget that even when then economy was booming and more and more companies were reporting skill shortages, youth unemployment was already rising. This suggests we've failed to ensure that a steady supply of young people are entering into work and structured training programmes that will help to prepare them for a career. Unchecked this is likely to lead to mounting social problems and weaker economic growth - both costs that as a society we cannot afford.

Yet at the same time we know that business wants to recruit and invest in more young people. Many firms face a ticking time bomb from an ageing workforce and a growing number of them are looking at recruiting apprenticeships. So this is not just about a weak jobs market but also a fundamental mismatch between the skills that business needs and those possessed by many young people

So what can be done to address this? In the short term the Government's Youth Contract programme offers some answers. Firms are enthusiastic about the wage subsidy for taking on apprenticeships and the opportunities for young people to take up short-term work placements while still receiving benefits.

The latter can often serve as a trial period for a permanent job or going into an apprenticeship, though employers would like to see this extended to twelve weeks - a closer fit with their probation periods. However, our research shows that few employers are taking up the incentive to take on a young person from the Work Programme for 26 weeks.

Partly, this is down to a lack of awareness of the scheme but employers, many of them facing considerable economic uncertainty, are nervous that someone who has not worked for a long period of time will not have the basic employability skills needed to go into a programme of work and training. This should be addressed by resourcing Jobcentre Plus to give unemployed young people the pre-employment training that will prepare them for this.

Looking beyond this, we need to ensure young people leave education with better qualifications - as a minimum 65% of them should get 5 GCSE A-C grades including English and Maths - better careers advice and a better understanding of the world of work. Only then can we hope to give the majority of our young people a fighting chance.

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