Everyone who is due to graduate this year is probably asking what price a real job? While I applaud the Government and its partners in the private sector for trying to dampen the impact of what looks to be a very nasty recession, re-introducing a 21st century version of the discredited Thatcher government's Youth Training Scheme (YTS) programme of the early 1980s is going to be as effective in creating employability as the 2.5% reduction in VAT was in halting the drop in consumer spending.
Without significant investment of time and resources from participating employers this will do nothing for those who participate. The last thing we need are trainees who aren't going to stay around long enough to learn anything more useful than the routine and the mundane. For all the good intentions and possibilities of longer-term employment, we know that in a recession protecting those who have long-term contracts is inevitably more important to employers than looking for opportunities to a take on the inexperienced.
As the YTS experience tells us, entrants into work under these types of programmes end up in the worst of all worlds. Managers and co-workers give short-term and undemanding tasks. Not much then in the way of real experience that will generate employability. In addition there is the antipathy they generate in co-workers who see them as potential cheap labour to replace them and reduce costs for employers.
I know there are those who will say this time it is different, that YTS schemes were aimed at post-16-18 year-olds not at graduates, that getting work experience is the basis for getting a job. But I am unconvinced: what can you gain from three months that you can't get from a summer vacation job?
The reason for this critique is that I have a much more radical solution in mind; one that requires a significant shift in public policy and employment practice, and if there is a time to make these changes it must be now.
If employers really wanted to give more young people the access to work they need, then we would see a significant drop in graduate starting salaries across the board and the consequent opening up of more opportunities through a voluntary agreement that for the next two years graduate entry scheme salaries would not exceed a much lower target figure than today's average. I'd have thought £18,000 a year would still be generous in today's environment. Remuneration would not include pension programmes, cars or other benefits and would bring both cost realism into recruiters and open up far more opportunities.
These programmes should be based around a two-year 'apprenticeship' offering a mix of education, development and real working experience. They would be similar to the Army's 'short service commissions' where, at the end of them, organisations could then offer roles to those who want to continue, leaving others to re-enter the job market, hopefully, in better times, with real experience, education and development.
The public policy implications are these: first, the presumption that a fixed-term employee is entitled to redundancy when they depart at the end of a contract has to be revoked; second, organisations should be able to treat the education and development costs of these assignments as investments and the costs taken off before corporation tax; and third, during these assignments graduates need not pay back loans.
This proposition has a significant chance of making a real impact on the futures of thousands of young people, who are after all the future funders of the pensions, benefits and health care that our generation believe is their due. If we don't invest in their future for real then we shouldn't expect them to think of our old age as a priority.
- Chris Bones, dean of Henley Business School, chris.bones@haymarket.com
