The scheme promises a £126 million investment to help young people into work. But much of the criticism levelled is that it is too small, which is the wrong tack. The constructive question critics should be asking is: who is this scheme being targeted at, how is it being monitored and is it long-term?
It's all too easy for people to criticise, but 'NEETs' (not in education, employment or training) are an incredibly hard to reach group, and any efforts to do so should be welcomed. At a time when youth (16-24 year olds) unemployment is high (21.2%), action certainly needs to be taken to provide more routes into training and employment that have long-term potential. If you dig deeper, the stats reveal that the unemployment rate for young black people is twice as high as that for young white people - at 44.4% and 20%, respectively.
As Nick Clegg says, there is evidence suggesting that unemployment early on in life can have a permanent effect on earning potential. If this discrepancy in youth employment isn't addressed now, we are merely setting up the scene for a widening pay gap, rather than a closing one.
The government and businesses must use this scheme - and schemes like it - to start to address this imbalance between ethnic minority and white youth unemployment. I would like to see employers start to focus on diversity when recruiting apprenticeships. A NEET programme without any ethnic minority participants certainly isn't reflective of the society in which the business is operating!
This is very much about businesses recognising that talent can be found in the most diverse people and places, including the untapped potential of our ethnic minority and white young people, and that it can only be harnessed with long-term focus and commitment.
What resonates most strongly with me about this Youth Contract scheme is that it will not release all funds to the businesses unless the participants complete the full year, therefore requiring long-term commitment from the participating businesses. If a business does not view apprenticeships, work experience schemes or the Youth Contracts as a long-term investment in their workforce's skills and career development, then there is no value to them, to the 'youth' or to the economy as a whole.
A good example of long-term best practice is a new programme being launched by Barclays Retail and Business Banking in April. Barclays is creating 1,000 new apprenticeships and offering young people struggling to find work the opportunity to build careers in the financial services industry. Successful applicants will receive 12 months training and support and progress to a permanent position.
For any business thinking of entering or setting up an apprenticeship scheme, Business in the Community has collaborated with City & Guilds Million Extra campaign to provide practical how-to guide for companies looking at apprenticeships. In the meantime, here are some basic considerations when considering how to set up an apprenticeship programme:
- Be in it for the long-term: set out clear career pathways for each placement within the business. At the minimum, a permanent position opening at the end of the placement. Ideally, a development plan spanning a 4-5 year period.
- Recruitment: recruit diversely from the widest possible pool - this includes NEETs and unemployed ethnic minority youth.
- Remuneration: offering unpaid placements immediately restricts your talent pool as only those with access to independent financial support can afford to work for free.
- Diverse disciplines: it's not just vocational and practical disciplines that benefit from apprenticeships. Consider apprenticeship roles across the entire workplace, from customer service and operations, to central office or project work, etc.
- Diversity policy and role models: there is strong evidence that visibility of diversity & inclusion policies and diverse role models encourages ethnic minorities to apply to a business, and stay for the long-term.
- Monitoring and measuring: benchmarking progress is essential to long-term success. Consider tracking the following:-
- Financial impact on your bottom line / staff productivity (81% of apprenticeship employers report a more productive workforce)
- Recruitment costs
- Staff turnover (80% of apprenticeship employers have a reduced staff turnover)
- Diversity (across ethnic minorities, gender and age, etc)
- Long term career progression (year on year, how far do the apprentices progress)
- Pay gap (across ethnic minorities, gender, as well as apprentices vs. other 'traditional' entry routes)
- Informal mentors: for many apprentices, a scheme like this may be their first experience in a work environment. Further, they may well come from backgrounds with poor parental support. Both these facts make it essential that businesses provide a mentor or buddy who will act as an informal coach. I know how much I valued the support of my buddy in my first ever role, so imagine how helpful it would be to these young people.
Successfully run apprenticeships can not only bring real commercial reward to businesses, but also offer them with the opportunity to diversify and broaden the way they recruit, source and develop talent and skills. Unlocking the potential in these untapped diverse groups and being committed to their career progression will be rewarded with motivation and loyalty, and long-term commercial returns.
Sandra Kerr, director for Race for Opportunity