Speaking yesterday at a Lords inquiry into youth unemployment, Dodge said young people relying on the welfare system face the biggest barriers for gaining employment because it means cutting the benefits "umbilical cord".
She said Marks & Spencer was increasingly finding unemployed young people joining its 'Make Your Mark Scheme' are from families who had been "jobless for generations".
The scheme was originally set up in 2012 to address the skills and experience gap that prevents 16-25 year olds gaining employment.
"They live in a community where when they go back at the end of the day [work] is frowned upon," Dodge told the Lords inquiry. "When we talk to some of these young people, their biggest barriers are the first few weeks when they go back to an environment where nobody works.
"If they have grown up in a family where everybody is on benefits and they are given the opportunity for work experience, they do not know if it is going to work out. They have to come off benefits and that is a deterrent for some young people as they do not want to cut the umbilical cord."
Giving evidence to the committee, Dodge also backed the Government's flagship universal credit reforms, which aims to simplify benefits and encourage young people into jobs, partly by cutting red tape, which she said has "hampered" people moving between welfare and work.
Also speaking at the committee was Jez Langhorn, senior vice-president for people at McDonald's. He said it was up to employers to do more to fight against youth unemployment.
He suggested businesses should help workers gain academic qualifications, such as in maths and English.
"An 18 year-old is very different from a 16 year-old," he said. "Gaining that qualification not only boosts their skills but their confidence.
"That is very important for young people. In many situations, that enables them then to get back into traditional academic routes as well."
Despite overall unemployment falling steadily over the past 12 months and now standing and its lowest point since 2009, youth unemployment has remained stubbornly high. According to this week's ONS job figures there were 941,000 16-25 year olds unemployed in the three months to October. This is compared to 1.2 million for the same period in 2010 and 926,000 in 2011.
