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Getting Graduates and young people into work

By Beverley Nielsen on Nov 25, 12 10:54 AM in Enterprise

Like most people I don't feel comfortable about expecting young people to take out loans to cover their higher education costs.

The blow has been a little softened through the rise in the salary threshold triggering payback, moving from £15k per annum to £21k in the new system.

Graduate employment is higher than non-graduate employment, at 85.5% compared to 73.3%, over the last six years.

There's a slew of surveys showing that graduates earn more over their working lives than non-graduates. The last one I saw showed people with degrees earned an average of £12k a year more than non-graduates over the past decade.

So perhaps it's defensible to think that in accessing a higher education young people will, on average, benefit from, they should be prepared to make a greater contribution to this privilege.

But of course they will only benefit in these terms if they find a job.... And we're still burdening young people with large loans at a time when they're setting out in life, perhaps wanting further loans to buy homes and raise families.

A report by the Department for Education and Skills, 'Higher Education Funding - International Comparisons' showed that UK participation rates in Higher Education were below average when compared to 13 leading OECD competitors.

UK participation stood at 45% compared to New Zealand, Finland, Sweden, Poland, Australia, Norway, and Iceland, which all had 60% plus participation rates.

The UK has been investing less in higher education at around 1% of GDP compared to an OECD average of 1.7% GDP. The UK level of spend was lower than for every OECD competitor examined at that time.

And whilst the UK has fallen further behind OECD competitors, from third to fifteenth between 2000 and 2008, the proportion of young people going to university across the OECD has doubled between 1995 and 2008 from 20% to almost 40%.

It seems too that tuition fees are becoming more of a feature of higher education provision rather than the exception, although UK fees appear to be are at the higher end of the scale.

Earlier this week I took part in a debate on Newsnight following the student protests in London over the rise in student fees.

The debate focussed on concerns that so-called 'marketisation' of higher education would inhibit freedom of thought and restrict independence of educational provision with large corporates imposing market-driven viewpoints in the classroom.

One of the panellists, Professor Howard Hotson, St Anne's College, Oxford, has written about Apollo Group, owner of BPP University of Professional Studies since 2009, spelling out his concerns that 'for profit' universities can be more focussed on just that rather than on the quality of educational provision. Courses undertaken might lead to great debts rather than great jobs.

He does, however, agree that most universities need to work more closely with employers to innovate finding new ways of being competitive, preparing young people to think creatively and independently and 'hit the ground running' when they get a job.

It's clear that if we're going to charge young people market rates for their education we have to make sure they're able to find satisfying work providing them with a balanced quality of life.

In the UK, where youth unemployment is almost 22%, a report, 'Tackling Youth Unemployment: lessons from Europe' published by IPPR, CIPD and TUC, assesses the extent to which the UK employment market is 'youth friendly'.

This report highlights the challenges faced by young people in the UK. They're apparently more than three and a half times more likely to be unemployed compared to an 'adult', people over 25, or those likely to have more experience of work.

It claims this ratio is high compared to European countries, even those worst affected by the financial crisis with youth unemployment rates at 50% including Greece and Spain , where young people are about two and a half times more likely to be unemployed than adult workers.

In Germany, with 10% youth unemployment, a young person is only one and a half times more likely to be unemployed than an adult worker.

The report highlights the 'systems' in place in these countries helping smooth the way for young people into work.

In Germany, Austria and Holland, apprenticeships and vocational qualifications include structured pathways into skilled work, opening up strong career and earning prospects for young people who don't go to university.

In other Northern European countries, employers offer regular work placements and training to support vocational courses in schools and colleges. Employers and unions help design high quality vocational qualifications including related academic and technical training, ensuring that young people have skills to take them through their working lives.

In the UK employers have become increasingly reluctant to hire and train young people.

Vocational qualifications are too often leading to low skilled jobs in the service sector, with little chance for later progression. Employers have not involved themselves enough in the development of these programmes or in workplace training.

Of course there are great examples of good practice, but not enough of them.

At the end of 2011 18.9% of those graduating in the previous two years were unemployed. Whilst this is lower than the 20.7% rate at the beginning of 2010, it's more than four times the rate for those graduating between four and six years ago.

At a time when our graduates are paying more for their education than ever before we need to do everything we can to ensure to aim towards less than 10% as a maximum unemployment rate for our graduates. And while we're at it we could work towards the same target for youth unemployment as a whole.

It's well known and the High Fliers Graduate Jobs Survey demonstrates that work experience is one clear way of improving job chances for graduates.

One in three entry-level jobs are being taken by graduates who have already worked for a company - such as in-work placements.

With over 1 million young people unemployed a City & Guilds report, 'Ways into Work' concludes the link between education and employment is central to tackling youth unemployment.

In February 2012, the Education and Employers Taskforce found that young people who had contact at least four times with employers were five times more likely to be in education, employment or training than their peers who recalled no such contacts.

For young people the most useful source of advice on employment and careers came from visiting an employer. 42% of 14-16s and 49% of 16-18s agreed they would 'one day like to run their own businesses'. There is a great enthusiasm for enterprise and entrepreneurship which needs supporting and encouraging.

Birmingham City University, in line with other Midlands universities, is working with employers to ensure we meet students needs by equipping them with skills for life. But we also need to work with employers to provide routes into work post graduation.

'Tackling Youth Unemployment' suggests that government could start by using procurement contracts to incentivise employers to offer quality work experience and training.

In Birmingham we could work more closely together -- business, local authorities and universities. By building on schemes such as Graduate Advantage, sourcing interns for business projects, we could work together to provide greater opportunities for every student and graduate. And we could make it much simpler for students and employers to understand what these opportunities are.

Developing platforms such as Idea Birmingham's Birmingham made Me Design Expo, all about raising the profile of emerging talent and providing greater opportunities for entrepreneurial collaborations between business and universities also needs more focus.

Through the two Birmingham Made Me Stores hosted at the Mailbox have 25 young entrepreneurs working collectively to promote their businesses. Thanks to the Mailbox they are getting great real life business experience, learning about their markets and making good sales!

Some business people I know have even spoken about quotas. They say we did this before for disabled people and now it's time to do the same for young people. They suggest that this is the only way companies will take on the numbers of young people to eliminate youth unemployment as a whole.

One thing is certain. Talking about all this no longer enough. We are asking a lot from our young people. They are paying for the educations that most of us enjoyed at the tax payers' expense. It is time to act. And we will need to act in collaboration and with decisiveness if we are to ensure some fairness in all this for young people.

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