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A NEET solution: are apprenticeship schemes the answer to youth unemployment?

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The press loves a stereotype when it comes to young people. Angry youths, hoodies, bricks through windows, lazy dropouts, looting? If the riots during our summer of discontent are anything to go by, coming up with these views of the UK’s young people can’t be hard.

And with the eyes of the world (a global economy), looking on as UK cities were ransacked, the impression of our 'employees of the future' is hardly stimulating.

At the same time as this minority of youths was rioting (and, as one young lady on the news eloquently put it, "demanding our taxes back"), the majority of their peers were tentatively waiting for GCSE or A level results.

But what these young people have in common is that they face unemployment - between April and June this year, 979,000 16-to-24-year-olds in England were not in education, employment or training (NEET), said the Department for Education. This is up 100,000 from the same time in 2010 and at 18.4% is the highest for the second quarter since 2006. And results published this week by the Office for National Statistics, found 991,000 16-24 year olds, were not in employment.

Apprenticeships were once confined to manufacturing; now they are seen as the quickest route into many industries, including retail, the media and even finance.

This year has seen an increase in Government spending on apprenticeships from £1.3 billion to £1.4 billion, while some 50,000 extra employers have taken on apprentices. Retailers Next and Asda and hotel chain Travelodge have launched apprenticeship programmes recently and Kraft Foods is poised to expand its existing scheme.

Alan Lewis, head of engineering, Kraft Foods UK & Ireland, says Kraft has a "proud history" of hiring apprentices and no intention of scaling back: "We give people an opportunity to come and work in a global company and if they're good there's no stopping them in their progress. We will continue to invest in and drive our apprenticeship programme in the future."

But with 673,000 school leavers grappling for places at UK universities, according to UCAS, and 30% (200,000) of those students expected to miss out on a degree place in 2011, according to universitiesnet.com, unsuccessful students are being pushed out of higher education by peers with better results. Concerns are growing that many school leavers who fail to win a place at university will apply for apprenticeships, pushing less qualified young people out of the running.

In short: no improvement to social mobility; disengaged young employees; continuing rising unemployment among the 16-24 age group; growth in the numbers of NEETs; and employers investing - on the Government's advice - in apprentice schemes that will not bring in adequate returns.

But a Department for Business, Innovation and Skills (BIS) spokesman said: "The Government doesn't acknowledge there is a huge problem. We are creating the biggest and best apprenticeship programme in our history, with funding for 360,000 apprentices this year alone, and an increased emphasis on progression to advanced and higher level vocational qualifications, as well as basic skills for employment."

But do employers agree? Apparently so.

Manufacturing giant BAE Systems offers apprenticeships to 1,000 each year. This year it received 6,000 applications (4,000 in 2010) - with an increasing number having A levels.

BAE's education director Richard Hamer says: "We need to recruit from a range of backgrounds and we have programmes to do that. There's a big thing around culture - you can mould young people to understand workplace culture and develop employability skills well, between the ages of 17 and 20.

"Employers are providing apprenticeships from the point of view of retention of high skill. The UK has been good at higher education, but lousy at intermediate skills, compared to countries such as France and Germany. The apprenticeship route weakened in the past, but is now being strengthened as a result of the work of the Government," said Hamer.

The Learning a Living report, produced in August by skills consultancy Working Links, shows apprenticeships are a "highly effective" route to getting young people into work. The research was conducted in May 2011 and comprises an online survey of 150 employers and 500 16-to-24-year-olds not in full time employment. It shows 80% of employers surveyed believe apprenticeships will help reduce youth unemployment and an overwhelming 100% believe apprenticeships give people the skills they need to find lasting work.

But David Way, COO at National Apprenticeships Service, does not believe apprenticeship should be a replacement for degrees. "It depends on the individual. If a degree equips the individual best for their career, then great. Apprenticeships offer another route - a fantastic opportunity." He stresses it is possible for young people to go into higher education after apprenticeship and move into different job sectors.

Gary Browning, chief executive of HR consultancy Penna, is in favour of businesses taking on school leavers, describing the process as "healthy". But he thinks the terminology is unhelpful - an apprentice, in his view, is a 12th century concept that needs rebranding. Penna is recruiting with developing talent in mind: "With a 19-year-old, you get a better opportunity to mould them and can retain them more easily than graduates, who tend to change jobs fairly quickly," he explains. Recruiting at entry level, Browning is looking for ability, but also energy, motivation and drive. Some work experience and skills are desirable, but not a raft of qualifications.

Felix Hebblethwaite, global diversity manager at law firm Linklaters, which launched its apprenticeship scheme in the spring, partners with local apprentice 'providers', including the London Borough of Islington, to make sure apprentices are the right fit. "The council identifies people and connects them with appropriate businesses for specific roles. This is a creative, easy solution and provides adequate support.

"There is, of course a CSR angle in doing this, but from a business perspective, we invest time in our apprentices and train and develop them, we receive their loyalty to their job, in return. This is definitely beneficial to us."

The Coalition agreement set out its promise to "seek ways to support the creation of apprenticeships, internships, work pairings and college and workplace training places as part of a wider programme to get Britain working".

Lewis doesn't see Kraft's scheme as a purely altruistic way of helping young people. "Apprenticeships ensure our workforce has the practical skills and qualifications the business needs," he says. "We're not just training a young person, but also building someone with a passion for what Kraft Foods does. Our apprentices will provide the future talent pipeline for our UK and Ireland business as a whole."

The Government's promise seems to have been fulfilled. As it generates the numbers of apprenticeships, school leavers' results improve year-on-year. The onus for the success of apprenticeships is on employers. It's your call…

How I see it

Anne Blyth, head of operational training, Asda

How do apprenticeship schemes benefit business?

Investing in young people, nurturing their talent, skills and enthusiasm, is not only the responsible and right thing to do, but it's the smart thing to do. Without doubt, as a business, we feel the benefit of having a skilled and engaged workforce. However, it is our young colleagues who feel the greatest benefit of training programmes, such as apprenticeships. Skills open up opportunities and choices and allow people to build a career, not just a job, at Asda. Offering programmes such as apprenticeships also sends out a clear message we value the contributions of our young colleagues. Nearly a quarter of our 175,000 workforce are 18-24 years old and a third of all new starters fall into that age bracket. We want to support our young people to realise their potential and to develop a fulfilling career.

How do apprenticeship schemes aid social mobility?

Skills are so important - they can be life-changing. Work-based training and skills development can have an enormously positive effect and open up a number of different opportunities, possibilities and choices to our colleagues. We know the importance of skills - they give you self-confidence to get a job and to build a great career. Investing in our staff in this way helps them to realise their potential and enables us to develop a skilled, motivated workforce that is also more productive.

How can apprenticeship schemes fit into an overall HR strategy?

At Asda, we offer not just a job, but a career, which is why we invest heavily in employment and skills development across the board. Our Asda Skills Academy of apprenticeship programmes is just one way we support people to develop more skills and gain valuable experience. This year, for example, we launched a fully funded 'learn while you earn' course at our George clothing division, allowing staff to work full-time at George while studying for a degree.

Case study: Travelodge

Budget hotel chain Travelodge launched its apprentice scheme 'Jump', in September 2011.

The scheme is designed for school leavers (18+) who hope to continue their education, obtain work experience, receive a salary and become a manager by the age of 21. It has been developed to support Travelodge's aggressive growth strategy, as well as supporting the Government's appeal for British companies to generate more high-value apprenticeship placements.

Travelodge's HR director, Michelle Luxford, explains: "Apprenticeships are marvellous things. They give people key skills and they boost social mobility.

"There are not many apprenticeships in hospitality - people see a job in the sector as short term, rather than a career destination. We are talking to A level graduates because we want a sense of maturity in our apprentices. We presented it to them as: would you rather go to university and accumulate £30,000 worth of debt, or earn £30,000 while you learn with us?"

Although Luxford does ask for a minimum UCAS points benchmark, she believes the company's scheme aids social mobility. "We are training people with skills for a long-term career," she says. "Learning a craft gives people much more confidence and opportunities."

Travelodge has a target to have 1,100 hotels by 2025 and to fuel this strategy the 'Jump' programme will provide a pipeline of new management talent. Travelodge is offering 500 management apprenticeships and, by 2015, 40%-50% of new hotels will be managed by these apprentices. This year, it took on 33 apprentices from 1,000 applications.

Additional reporting by Tim Soare