This month will see us take our first significant step on the long journey out of lockdown, with non-essential retail and outdoor hospitality set to reopen – and our collective excitement is palpable.
Restaurants and bars have reportedly had double the number of reservations they had upon reopening in July last year. Such enthusiasm will be good news for a sector which, according to the Office for National Statistics (ONS), currently has the highest redundancy rate in the economy.
With young people three times more likely to work in shutdown sectors, such as hospitality or retail, it’s little wonder that youth unemployment is now 13% higher than before the pandemic. Clearly, it’s going to take more than beer gardens and alfresco dining to reverse the damage caused by lockdown.
Hopes have been pinned on the chancellor’s Kickstart Scheme which promises young people aged 16 to 24 a high-quality job for six months, paid for by the government at the national minimum wage for at least 25 hours a week.
But is the initiative having the desired impact? And is it the right option for both employers and young people?
Announced in July 2020 as part of the chancellor’s Plan for Jobs, the Kickstart Scheme was among a suite of measures that included £111 million further investment in traineeships and added incentives for hiring apprentices. It’s available to young people on Universal Credit who are at risk of long-term unemployment.
The intention, of course, is to interrupt what might otherwise become long-term unemployment and improve future employability. With £2 billion of funding available for Kickstart, double that of the 2009 Labour government’s Future Jobs Fund, it’s a hugely significant investment.
Now seven months on from the scheme’s initial launch in September 2020, more than 150,000 jobs have been pledged by employers. Unlike the Future Jobs Fund which focused on job creation in the public and voluntary sectors, Kickstart is open to the private sector too, enabling it to create a greater diversity of roles.
Among those employers taking part in the scheme is TalkTalk, which welcomed its first cohort of Kickstarters at the end of March. The telecoms giant created 50 placements in its Manchester office across a range of functions and, according to Daniel Kasmir, chief people and procurement officer, will benefit just as much as the young person.
“Kickstarters will help existing teams achieve more and help to drive performance, adding value for us and them at every touch point,” says Kasmir. “We’re also able to support and build a pipeline of future talent in the local community, and as such, invest in the ongoing improvement of our neighbourhood.”
The government is determined that this scheme should offer high-quality jobs that create opportunity and hope for young people after their initial placement. For TSB – the first bank to enter the scheme – focusing on role design is a key element of that offering.
“We thought carefully about the skills we will be looking for in six to 12 months and wanted to make sure the scheme creates a great grounding for the Kickstarters whether at TSB or elsewhere,” explains Liz Ashford, the bank’s HR director.
The bank is offering 30 Kickstart placements, which was the original minimum requirement to take part in the scheme. This criterion has since been removed, something Ashford describes as a “good step” in opening up the scheme to smaller businesses.
A bump in the road
One employer able to take advantage of the scheme, since the 30-placement minimum was lifted, is Matchstick Creative, a content agency based in Liverpool. According to founder Ruth Hartnoll, hiring two Kickstarters will have a hugely positive impact on the small business, but it’s not been without its challenges.
“I’m really enthusiastic about the scheme. It’s such a good idea,” she says. “But it’s been unnecessarily difficult to get here.” Hartnoll says that she could not have navigated the process without the help of a Kickstart Gateway which offers support and guidance.
With fewer than 5,000 young people having started placements, it would seem that there are obstacles to be negotiated. Tracy Fishwick, managing director of Transform Lives Company, supported Matchstick to access the scheme. She says the most recent national lockdown has caused delays because some employers are reluctant to begin placements virtually, but she also believes bottlenecks at the Department of Work and Pensions (DWP) have led to problems too.
“All of a sudden, they approved 120,000 jobs two days before Christmas,” says Fishwick. “These need to be loaded up onto the system manually and there’s literally not enough man and woman power to input all the vacancies.”
The DWP advises that it takes two weeks to approve a job, but Fishwick says that in reality it’s closer to four weeks. Additional time for advertising the role and recruiting means it can take eight to 12 weeks before a placement starts.
Government schemes can be notoriously difficult to negotiate. The CIPD surveyed 1,000 of its members in December 2020 and just 46% said they intended to hire a young person in 2021 despite government incentives. But the reaction to the Kickstart Scheme was relatively positive with 32% saying they were interested in it.
CIPD skills policy advisor Lizzie Crowley says larger employers have found it easier to get up and running with Kickstart, but where there is a hesitancy to engage, it’s often rooted in confusion. “One of the big challenges here is that you’re looking at quite a fragmented and confusing landscape for employers,” she says.
“In Scotland, for instance, they’ve taken a bit more of an umbrella-style approach, bringing all of these options together under the Young Person’s Guarantee.
“It would help to hide some of the wiring for businesses so they can select the intervention that makes the most impact not only for them, but also for the young people involved.”
Capgemini is one of those employers that have embraced the Scottish government’s umbrella-style approach, which guarantees every young person aged 16-to-24 a job, placement, training or volunteering based on their own personal ambitions.
Ruth South, head of graduate, apprentice and placement programmes at Capgemini, says that while they’ve not yet made a decision on joining Kickstart, they have managed to increase the number of young people starting on apprenticeships and placements by 50% this year alone.
South says the Scottish initiative allows employers to think creatively about their talent plans because there are a number of routes available.
Similarly, despite not using the Kickstart Scheme, Virgin Media has increased early career starts by 163% on the previous year. Karen Handley, head of future careers at Virgin Media, explains that focusing on their existing programmes has led to good retention rates among young people.
“We already have a large number of well-structured apprenticeship programmes in place that we have tailored for our apprentices and business needs, with all roles offered on a permanent basis,” says Handley. “A third of our first apprentices from 2008 are still with us today.”
Learning skills that are specific to Virgin Media increases the likelihood of an employee progressing their career there with over 50% of Virgin Media apprentices and graduates still at the company, five years later.
Choosing the right path
Elizabeth Taylor, CEO of the Employment Related Services Association (ERSA), says that Kickstart must be viewed as one choice among many, not just for an employer but for the young person also.
She says: “It’s perfect for some young people who want to know that for six months they’ve got this work experience opportunity in a supportive environment, but there are some young people who actually just want to go to an employer and have a longer-term job.
“However, we’ve got to make sure there are those other opportunities available too. And there are also young people thinking about self-employment, so it has to be a really wide offer to young people.”
Part of that offer is employability support. The chancellor has committed to paying employers £1,500 per Kickstart placement to set this up. Large employers like TSB and TalkTalk have the learning and development infrastructure to offer much of this in-house and will do so through workshops, employee networks as well as external training opportunities.
Fishwick, who was recently awarded an OBE for her services to unemployed people, warns that not viewing young people as a homogeneous group is the key to successful employability support. She says: “They have as many wide and varied issues as any age group.
“Be prepared to be flexible, to be able to notice, and really listen to where they’re coming from and what’s happening for them. It all comes back to good coaching and mentoring.”
Fishwick makes a valid point. Within that age bracket of 16 to 24 are school leavers and graduates. Kathleen Henehan, senior research and policy analyst at the Resolution Foundation, warns that in the rush for top talent, young school-leavers with lower-level qualifications may be overlooked in favour of graduates who appear to offer more value for money.
She says: “There’ll be a temptation to hire those young people who are close to the market; who, if it was a different economy, might be looking at a permanent job.
“If young graduates struggle now, they will be worse off than their cohorts who left before them, but they will ultimately get back into the market. Whereas there’s a real risk that we’re going to ramp up long-term unemployment, which is bad for the economy and bad for everyone, if we don’t target those young people with lower-level qualifications now.”
Henehan also believes that delays in the scheme could make things worse for those job-seekers. She says: “The longer young people are out of work, particularly young people with lower-level qualifications, the greater their employment scarring will be in future.
“They’re more likely to get discouraged, and they won’t be using any skills that they learned in education.”
Part of the solution might be to extend the scheme. Kickstart is due to close in December, but the Resolution Foundation, the ERSA, the CIPD and more recently, the CBI have all called for it to be extended into 2022. With so few placements having been taken up, it’s easy to see why they might.
“By the end of this year, it’s estimated that we’ll have a million unemployed young people under the age of 25,” says Crowley. “Not acting when that’s the potential scenario would be a fundamental failure.”
And, although it’s still early days for TalkTalk’s first Kickstart cohort, Kasmir says he would like to see more initiatives like this. “Kickstart has opened many doors for us in terms of being able to increase our entry level roles, and this is something we’d love to continue doing in the future,” he says.
“As we emerge from the pandemic, and ease back into what will be a more normal world, it’s crucial that these types of schemes continue to help build back better and support our young people starting out in their careers.”
While employers and experts appear united in their praise for the government’s intentions, it’s clear that the initiative is no silver bullet for the epidemic of youth unemployment. Long delays, administrative red tape and too many options suggest that its impact is yet to be felt. It is perhaps ironic then that a scheme with the moniker ‘Kickstart’ may very well need one itself.
This piece appears in full in the March/April 2021 issue of HR magazine. Subscribe today to have all our latest articles delivered right to your desk.