Youth unemployment in the EU: a scarred generation? - European Union Committee Contents


Chapter 5: Using EU funds to prepare young people for work

86.  In considering measures to address youth unemployment, commentators and evidence we received widely accepted that there is a distinction between stimulating the market to create jobs for young people (the demand side) and supporting young people to enable them to access the job market (the supply side).[157] This Chapter looks at whether and how EU funds should be used to improve the skills of young people in order to address youth unemployment.

A holistic approach

87.  A number of stakeholders at EU level have emphasised the need for a holistic approach. In a 2011 resolution entitled Tackling youth unemployment: possible ways out, the European Parliament called for a holistic approach which took into account education, training and the level of growth in Member States.[158] In a 2013 peer review paper, the European Commission stressed the benefits of "holistic or 'one stop shop' services", which focussed on social as well as labour market outcomes. It acknowledged that the probability of entering the NEET group was linked to socio-economic factors such as low family income, disability issues, or migrant status.[159]

88.  The young people we spoke to during our visits to Birmingham and Liverpool (see the note on these visits at Appendix 4), some of whom were from disadvantaged backgrounds or had faced complex personal barriers to finding work, emphasised the importance of a holistic approach in seeking to address youth unemployment. They highlighted the importance of stable and affordable housing as a prerequisite to long-term employment and said that employers were often unable to appreciate that personal issues occurring outside the workplace may affect an employee's ability to attend or perform properly. They said that this made it harder for young people with complex backgrounds to find employment. Rathbone, a voluntary organisation that works with young people, said that a lack of financial support for travel, subsistence and equipment could sometimes be more of a barrier to young people accessing work than capability.[160]

89.  The successful provision of support to young people to prepare them for work demands a holistic approach centred around the individual. Key issues specific to each individual, such as their access to transport, the need for a safe and welcoming environment at home and in the workplace, criminal records, learning difficulties and other personal considerations, need to be taken into account.

Qualifications

90.  Pervenche Berès MEP placed an emphasis on formal qualifications in terms of the employability of young people. She referred to hard-to-reach[161] young people as the "greatest challenge, because not only do these young people have to get into work, someone has to make sure that they are able to upgrade their qualifications".[162] McDonald's agreed with this, saying that it was important that larger companies offered people without many qualifications an opportunity to gain further qualifications once they had left the traditional academic environment, to improve both their skills and confidence.[163] However, Ms Berès and McDonald's both agreed that qualifications were not the only important factor in enabling young people to access the labour market.[164] Ms Berès said that there was a problem of even very well qualified young people not being able to find jobs after gaining a degree.[165] One of the young people we met in Birmingham told us that, despite her four higher education qualifications, she had been unable to find employment for the last two years. She said that she was not alone in this situation, and suggested that employability skills were as important as qualifications. Employment Pathways CIC, an organisation that works with employers and young people, said that a range of young people including NEETs, long-term unemployed and some graduates, lacked the skills to make them employable.[166]

Skills

91.  Employers suggested that one of the key issues in the area of unemployment was that young people did not have the basic skills to take the available jobs. Marks and Spencer said, "we are seeing … school leavers lacking basic employability skills, such as communication, self-esteem, confidence".[167] It said that this created a vicious circle where young people were unable to get jobs due to their lack of skills, which then further damaged their confidence.[168] WORKing for YOUth said that "employers tell us in no uncertain terms that it is the soft skills—the communicative skills, the social skills—that they find most lacking by the time people leave school to come to them".[169] Mike Thompson, Barclays, linked the lack of skills to young people's readiness for work. He said that "there is a big stigma hanging over young people at the moment regarding their readiness" and said that in Barclays' experience, "it does not take an awful lot to get them ready".[170] He acknowledged that connecting with and training young people was perhaps easier for large organisations like Barclays and that small businesses tended to recruit those who already had experience.

92.  Adam Swash, Head of Strategy at Experian and founder of WORKing for YOUth, said that often, small businesses did not believe they had the time to give to young people in order to get them ready for work. The National Association of College and University Entrepreneurs (NACUE) concurred with this, noting that the increase in the number of small and medium-sized enterprises (SMEs) may have changed what was expected of young people entering the job market.[171]

93.  The European Youth Forum, NACUE and Impetus, a private equity foundation that funds and supports charities working with young people, said that young people were expected to have the necessary skills before starting a job and that previously employers had invested more in training a person over a lifecycle.[172] The NUS agreed with this and explained:

    "at the moment it feels like the responsibility only flows in one direction … it is the young person's responsibility to be work-ready. Twenty years ago these people were not ultimately work-ready but there was an expectation that they went in at mid-level jobs, they would be trained in the job, they would understand the cultures of the workplace and they would become work-ready."[173]

94.  The EU institutions have made efforts to overcome this lack of soft skills and improve the training available. As mentioned in Chapter 3, Box 3, the ERDF provides support to SMEs to enable them to take on apprentices and trainees. The European Commission recognises that apprenticeships and work-based learning ease the transition from education and training to work and it has developed policies on apprenticeships and traineeships. The EU initiatives in this area will be discussed in Chapter 7.

95.  In recent years a number of factors, including an increase in the number of small businesses with limited resources, have resulted in a move towards the expectation that young people should be 'work-ready', rather than being trained 'on the job'. We welcome the focus in the European Regional Development Fund Regulations on supporting SMEs so that they can take on apprentices.

SKILLS MISMATCH

96.  In its Communication, An agenda for new skills and jobs,[174] the European Commission said that there is a persistent mismatch between skills available and the needs of the labour markets across the EU. It outlined a number of different types of mismatch, which were broadly grouped around two main concepts: a "skill deficit", where the workers' skills did not meet the requirements of the job and "skill underutilisation (over-skilling)", where the workers' skills exceeded those required by the job. The European Commission also said that the same type of mismatch occurred in relation to formal qualifications.[175] In December 2013, the European Commission introduced the EU Skills Panorama, a website presenting quantitative and qualitative information on skill needs, skills supply and skills mismatches in different Member States. The EU Skills Panorama highlights the occupations with the most and the least jobs available.

97.  Business Europe highlighted the impact of the skills mismatch on youth unemployment. It said:

    "there are in the region of two million unfilled vacancies across the EU at the moment. At the same time, people are as highly educated as they have ever been, and the number of people going into tertiary education is growing all the time, yet we see that in a number of Member States obviously there are very high levels of youth unemployment".[176]

98.  NACUE said that the skills mismatch in the case of overqualified graduates represented a missed opportunity for employers, who often did not have the mechanisms in place to enable young employees to add value to the business.[177] The British Youth Council suggested that this negative effect was also likely to be felt by young people for whom an inability to use their skills could result in a feeling of worthlessness.[178] Therefore, youth 'underemployment' seemed to be as much of a problem as youth unemployment.

99.  The European Council has reported that the skills mismatch is particularly apparent in the area of Information and Communications Technology (ICT) skills. In the October 2013 European Council Conclusions, Member States agreed that this was a cause for concern in the context of the youth unemployment problem. The Council found that, in 2011, the EU was faced with 300,000 unfilled vacancies in the ICT sector and that if this trend continued there could be as many as 900,000 unfilled ICT vacancies by 2015.[179] At the Paris Youth Employment Conference in November 2013, Herman Van Rompuy, President of the European Council, said that, despite the market demand for ICT skills, the number of ICT graduates was falling.[180] Business Europe said that employers were increasingly looking for digital skills, along with a broader range of skills relevant to technology— Science, Technology, Engineering, and Maths (STEM) skills.[181] However, the European Youth Forum emphasised that a long-term approach to specialist skills training in general is important, rather than an overemphasis on ICT skills to the detriment of other growth sectors. It gave the example of Ireland, where the ICT sector is particularly important now, but where a few years ago the construction industry was the employment hub for young people—indicating that the level of demand for a certain skill-set can change rapidly. In addition to a deficit of higher level ICT skills, the Centre for European Studies, a political foundation of the European People's Party, spoke about the importance of a more basic level of "digital literacy" which it said needed to become "part and parcel" of the education system.[182]

SKILLS MISMATCH AND DIGITAL LITERACY IN THE UK

100.  In its 2013 Country-specific Recommendation to the UK, the European Commission said that, despite some progress in recent years, a significant proportion of young people did not have the necessary skills to compete successfully in the labour market.[183] The European Commission said that the UK had a shortage of workers with high quality technical skills, at the same time as having an oversupply of "low-skilled" workers. It found that the unemployment rate of "low-skilled" 15-25 year olds in the UK was 37.2 per cent in 2013, significantly above the EU average.[184]

101.  Go ON UK, a UK based alliance that supports digital skills, said that digital literacy in the UK was worse than some other Member States, with six per cent of young people in the UK lacking the basic online skills required to send an email. It also mentioned the OECD survey of Adult Skills, published in 2012, which tested people's proficiency at problem solving in technology rich environments. The UK came seventh out of the EU countries on the scale, behind the Scandinavian countries, Germany and the Netherlands. It said that a possible role for EU funding in this area could be through matching young unemployed people with employers, including SMEs who needed employees with strong digital literacy or higher level ICT skills and supporting them to train the young people to provide the skills they required.

102.  We welcome the efforts made at EU level to address the skills mismatch, via the introduction of the EU Skills Panorama. We recognise that the skills mismatch is a particular problem in the UK, resulting in particularly high unemployment rates amongst low-skilled young unemployed people. We therefore recommend that the UK Government integrate the EU Skills Panorama into careers services provided at a national level, through schools, job centres and online resources.

103.  We agree with the European Council that a greater focus on Information and Communications Technology (ICT) skills is necessary, particularly as the ICT sector is currently experiencing a skills shortage. However, we caution against an over-concentration in this area, at the expense of other emerging sectors. The UK Government could use the European Social Fund and European Regional Development Fund to support enhanced provision of both basic and higher level ICT training and skills training in general for young people in schools and businesses.

Careers advice

104.  The evidence we received suggested that careers advice presented a problem in the area of youth unemployment. Business Europe said that the type of support provided should be dependent on age and level of education; young people at university had the benefit of in-house careers advice, whereas for school leavers who chose not to opt for further education, it was less straightforward to access information services.[185] Rebecca Taylor MEP, Vice-Chair of the European Parliament Youth Intergroup, agreed that more support was needed for school aged young people and said that it was important to use good careers advice to show young people the link between their studies and a potential career, before they "switch off".[186] She said that as well as school leavers, highly qualified young graduates were still lacking in the basic skills needed to apply for jobs, such as a good understanding of employers' expectations.[187]

105.  A recent report by McKinsey and Co, the business consultancy firm, confirmed that careers advice was a problem across Europe and found that less than a third of the 5,300 young people surveyed in eight Member States felt that they were getting good careers advice at secondary school level.[188]

106.  The European Commission has taken steps to overcome this issue, through the EURES portal, which is the EU's information and job search source. However, given its origins, the portal is largely focused on providing people with the information and advice they need to go and work in another Member State. Furthermore, the evidence we received indicated a lack of awareness of the EURES portal (see Chapter 6, paragraph  130).[189]

CAREERS ADVICE IN THE UK

107.  Much of the evidence we received on this particular topic was UK focused, but given that young people across the EU feel that they are not receiving good careers advice,[190] it may well be that the UK experience is relevant to that of other Member States.

108.  Careers advice for young people under 18 is provided by schools, and advice for those over the age of 18 is provided by the National Careers Service, which is run by the SFA. The SFA said that the most common searches on its careers advice website were for a limited set of jobs. The Office for Standards in Education, Children's Services and Skills (Ofsted) said that the young people it had surveyed in schools had a very narrow perspective of the opportunities available to them.[191] It said that this lack of knowledge about possible careers was a reflection of the poor careers advice available to young people in schools.[192] Walpole Publishing Ltd, a publication company that produces a careers guidance magazine, agreed that career advice in schools was poor. It also observed that the use of schools to provide careers advice presented a conflict of interest, whereby schools received funding from keeping young people on an academic pathway until sixth form, whether or not it was best for them.

109.  Walpole Publishing Ltd and HECSU expressed concern with a move from a face-to-face model for careers advice to a careers service that was primarily online.[193] HECSU said this had alienated many young people who did not have access to the internet, found it difficult to navigate websites, or were looking for nuanced advice and not simply information.[194] The National Careers Service currently has only 12 face-to-face centres, which are available solely for young people over the age of 18. The SFA and the UK Government said that this face-to-face service was supported by over £8 million from the ESF annually.[195]

110.  There are a variety of sources of careers advice which need to be coordinated. The UK Government should continue to use the European Social Fund to support the National Careers Service and extend its face-to-face element beyond the 12 centres currently offered. They should also encourage use of the European Social Fund to improve labour market knowledge at earlier stages in young people's progression through education and training. One way of doing this would be by continuing to make support available to NEET young people. The National Careers Service should act as a 'one stop shop' to refer young people to the different sources of careers advice.

111.  We also recommend that the UK Government use the European Social Fund and the European Regional Development Fund to enable businesses to connect with schools in order to provide careers advice. This could be facilitated through business representation in Local Enterprise Partnerships.

157   McKinsey and Co., (2014), Education to Employment: Getting Europe's Youth Into Work; Q 187; Q 179  Back

158   2013/2045(INI) Back

159   European Commission, (2013) Are they working?: A review of approaches to supporting young people into work, Mutual Learning Programme Thematic Paper Back

160   Rathbone Back

161   The term 'hard-to-reach' is a term sometimes used by policy-makers to describe those sections of a society or community that are difficult to involve in public participation or government schemes. Back

162   Q 145  Back

163   Q 89 Back

164   Q 89; Q 145  Back

165   Q 145  Back

166   Employment Pathways CIC  Back

167   Q 89 Back

168   Q 89  Back

169   Q 102  Back

170   Ibid.  Back

171   Q 134  Back

172   Q 210; Q 134; Impetus Back

173   Q 134 Back

174   COM (2010) 682 final Back

175   European Commission (2013), Skills Mismatches and Social MobilityBack

176   Q 210; see also Q 156 (Emer Costello MEP); Emma McClarkin MEP; Anthea McIntyre MEP Back

177   Q 134 Back

178   Q 128 Back

179   European Council Conclusions, 24-25 October 2013, EUCO 169/13 Back

180   European Commission, Speech by President Herman Van Rompuy, 12 November 2013, available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/139543.pdf Back

181   Q 211  Back

182   Q 211  Back

183   COM(2013) 378 final  Back

184   Ibid. Back

185   Q 208 Back

186   Q 168 Back

187   Ibid.  Back

188   McKinsey and Co., (2014), Op. Cit.  Back

189   Q 130 Back

190   McKinsey and Co., (2014), Op. Cit.  Back

191   Q220 Back

192   Q 220 Back

193   Walpole; Q 222 Back

194   Q 222 Back

195   Q 228; see also Government Back


 
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