Improving the transition from school to work Contents

Chapter 2: The labour market and employers’ expectations

“The interviewer… wanted me to be able to learn from the experience I was going to get. He liked my personality and said that he felt that I was hungry to learn and that my personality came across well in the interview.”50

Balqis, a participant in our focus group on 27 October 2015

33.Getting a job is one of the most direct routes out of poverty.51 Getting a good job with prospects is essential for social mobility. As such, a focus of our inquiry was on the nature of the labour market. We looked at how employers recruit staff, and whether young people had the skills employers said they desired.

Box 4: The labour market

The labour market is where potential employers and employees meet. It is made up of the number of jobs available, and the number of people who are able to (and who want to) work. Labour markets exist at a local, national or international level.

Employers in the United Kingdom are divided into three broad categories: the public sector, the private sector and the voluntary sector.

Public sector jobs include roles in education, health, local, regional and central Government, and the military. Private sector jobs are roles in businesses run by private individuals and groups. Voluntary or third sector jobs are roles in organisations which are not looking to make a profit (such as charities).

What do employers say they need?

34.We wanted to understand what employers looked for in their employees when they recruited them.

35.From the start of our inquiry many of our witnesses told us that many employers would rather recruit people who demonstrated that they had skills to succeed over those who had academic qualifications.52

36.Barclays PLC, which employs approximately 132,000 people, told us they found “academic attainment remains important in giving young people access to the widest breadth of opportunities” but there are also “numerous skills it is important for young people to demonstrate. Team-working, problem solving, confidence, presentation skills and resilience to name just a few.”53

37.Neil Carberry, Director for Employment and Skills for the Confederation of British Industry, agreed: “85 per cent of CBI members identify attitudes, attributes, [and] characteristics along with basic skills in literacy and numeracy as the most important things they look for if they are hiring into the business at 18.”54

38.Barnardo’s agreed: “as an organisation providing support to this group we know that it is important that young people are also able to learn ‘Life Skills’ while undertaking their course … .As one of our trainers explained:

“They’re the generic elements that allow you to succeed such as self-presentation, punctuality, personal hygiene, interview techniques, working out money. Things that employers tell us they want. They want honest, reliable, punctual, well presented [young people]”.55

Yet the Federation of Small Businesses told us: “The skills most lacking in recruits under the age of 24 are the general attitude to work, communication, self-management, people skills, problem solving, literacy, numeracy, technical skills, teamworking, leadership and management, IT literacy and languages.”56

39.Other witnesses cautioned that preparation for adulthood was not just about being a contributor to the economy. For instance, Professor Orr said: “I pay my taxes each month, but it is not my defining feature as an adult human being in the UK.”57

40.The above witness statements refer to different types of skills and attributes which have been named differently in UK policy over time. They include functional skills such as communication, literacy and numeracy, and digital skills. They also include soft ‘employability’ and personal effectiveness skills such as team working, time management, resilience, flexibility, problem-solving and communication skills. Thirdly, they include personal attributes and qualities such as confidence and resilience. For convenience, in this report we have referred to this umbrella of skills and qualities as ‘Life Skills’.

41.It can be tempting in looking at the development of Life Skills, as well as the provision of advice and guidance, to think about a young person as someone to whom something is done or delivered, rather than someone who has—or should have—a level of control over their destiny. It is important that young people are not made to feel like “chess pieces”, as one of our focus group participants put it. All government policy should be geared towards empowering young people and encouraging them to own their decisions and make confident plans for their future.

Skills for work

42.Some of the skills needed for the workplace can only be gained through experience of work. For instance, the OECD58 showed that skills such as problem solving and communication are most effectively developed in work. KPMG, which employs nearly 12,000 people in the United Kingdom,59 told us: “experience of the workplace is essential in raising aspirations of young people and de-mystifying the workplace environment prior to interviews.”60 However, Professor Purcell and colleagues told us that when they go into work, many young people access part-time temporary work and ‘zero hour’ contracts and so no-one is responsible for their training.61

43.Part-time employment opportunities can help to develop Life Skills. UKCES told us that “Part-time work develops those skills and capabilities which employers value”62 Some witnesses, however, highlighted the demise of the Saturday job63, which means there are fewer opportunities for young people to develop Life Skills by working part-time around their studies.64

44.We raised the issue of Life Skills with the Education Secretary, the Rt Hon Nicky Morgan MP. She told us that Life Skills such as “self-confidence, self-esteem and teamwork” could not be examined.65 However Maggie Walker, Chief Executive of ASDAN, told us that prior to the 2010 Government, it had been possible to take a GCSE in Life Skills. Ms Walker said this meant “young people saw that developing these skills really counted and they were valued and measured alongside their other qualifications. Removing them, she said, “ … was a really backward step”.66 She also told us there is “a huge lack of personal and social development education within school nowadays.”67 Sam Monaghan, Executive Director for Children’s Services at Barnardo’s, told us that this was because “many of the young people we work with are in an environment in schools where the focus is very much on qualifications.”68 A group of three young people between 16 and 18 years old who used Barnardo’s services told us that school was “all about being taught how to pass exams rather than learning useful Life Skills.”69

45.Nonetheless, schools and colleges can help to teach some of these skills that employers say they want.70 Skills do not necessarily have to be taught as a specific subject. ThinkForward said: “Building work readiness does not require separate lessons, but it does require a focus on skills development across the curriculum.”71

46.A lack of opportunities in the workplace, together with a lack of Life Skills within schools and a lack of family-based learning, has meant the voluntary sector has had to create opportunities for young people to develop them. One way that young people are getting help to develop a wider range of skills is through work with voluntary sector organisations. For example, the Barnardo’s Phase 2 service provides advice and advocacy on the skills needed to support sustained employment.

47.Providing broader opportunities to learn Life Skills is very important, because a person’s skills are closely linked to their social and family background. Research by Demos found that “large numbers of young people in the UK—particularly from disadvantaged backgrounds—do not have enough opportunity to take part in non-formal learning and are therefore at risk of not developing key skills important for success.”72 The Federation of Small Businesses told us that “limitations in their social networks mean that young people from disadvantaged backgrounds have fewer opportunities to develop these skills outside the school setting.”73 Young people who have not had access to the same opportunities as others may therefore be at a further disadvantage when they are looking for a job.

48.Our witnesses raised concerns that employers felt that they did not have the supply of ‘work ready’ young people to employ that they needed. Evidence from Kate Purcell and colleagues showed that employers expect education to prepare young people, rather than seeing it as part of their responsibility when an employee starts work.74 The Prince’s Trust told us that, “Employers are finding it increasingly difficult to recruit prospective employees straight out of education, as although they may be technically or academically able, they lack ‘soft transferable skills’.”75 A large number of witnesses agreed.76 The Federation of Small Businesses found in its own research that the skills felt to be most lacking in recruits under the age of 24 are a general attitude to work, communication, self-management, and people skills.77

49.Employers say they look for more than just qualifications in their recruits. They want their employees to arrive with the skills to succeed in the workplace: communication, team working, resilience, and self-management. Many of these skills can only really be gained through experience of work, either through work placements, or once in employment. For young people who do not have access to work-based training, the education system can go some way towards teaching these skills. However, Life Skills are not embedded in an effective way alongside or within the curriculum, and young people leave the education system insufficiently prepared for adulthood and the world of work.

Recruitment practices

50.The way people are recruited affects the potential social mobility of young people. Recruitment practices can inhibit people from accessing work and developing careers in fields to which they would be suited. This is because these recruitment practices may favour people from higher social classes to be recruited and to gain employment. As such, we sought to understand the approach taken to the recruitment of young people.

Box 5: Formal and informal recruitment

There are two broad types of recruitment: formal and informal.

Formal recruitment is the practice of advertising a position in a business widely. This is typically followed by a sift of candidates, and a formal interview of the candidates who best meet the requirements of the position.

Informal recruitment is often known as word-of-mouth recruitment, and relies upon networks of contacts through colleagues, family and friends.

Formal recruitment

51.Our evidence showed that the application and interview process does not reflect what employers say when it comes to valuing skills over qualifications. Telford and Wrekin Council said:

“Employers say they want young people with ‘sparkle’ and [a] bit of initiative, and very often they advise they are prepared to train them to give them the skills they need to do the job. However, the recruitment process does not measure enthusiasm, and starts with qualifications and experience, which many of this group do not have.”78

Other witnesses shared this concern, and we agree that it is a fundamental difficulty with recruitment.79 Employers are faced with large numbers of applicants. Their use of qualifications to screen potential employees is one easy way to get application numbers down to a manageable level. However, if employers want employees with a broad range of skills, reliance on academic attainment will not lead to the most diverse and most skilled young people getting jobs.

52.Pret A Manger, which has 289 shops in the United Kingdom, said “sadly there is a perception that employing young people will be time consuming and stressful” due to employers’ concerns that young people are not learning the skills at school they will need in the workplace.80 This is a barrier to social mobility. If employers think it is more difficult and costly to employ young people, they will not employ them.

53.Several witnesses suggested that employers do not understand the relationship between many qualifications and the skills the candidate has acquired.81 Others also told us that employers are more familiar with some qualifications, such as A-Levels, than others.82 This familiarity could create a bias towards those with academic qualifications. Less understood qualifications, such as vocational qualifications, may therefore have relatively less value. We discuss bias in more detail in Chapter 4.

Informal recruitment

54.The use of word-of-mouth recruitment presents a barrier to social mobility. Young people whose families do not have these valuable networks and contacts are at a disadvantage.83 It narrows the jobs available to those who have the “right” networks and social connections. The reliance on networks excludes a large number of young people who do not have the contacts that others do. Moira McKerracher, Deputy Director of the UK Commission for Employment and Skills, told us that word-of-mouth recruitment is the most popular type of recruitment for young people in the UK. She told us that this type of recruitment depends on social networks.84 The UKCES report ‘Catch 16–24’ showed that 23 per cent of employers of young people had used word-of-mouth recruitment or a personal recommendation in 2014. Other popular methods of recruitment were the employer’s own website (14 per cent), the job centre (12 per cent) and local media (nine per cent).85

55.Some employers have recognised, and begun to address, these problems. For example, Deloitte consider academic qualifications alongside a range of other background factors. This means that a candidate will be recognised if they gained three Bs rather than three As at A-Level if their school’s average was three Ds. Deloitte has also removed the names of educational institutions from applications, and their recruitment process involves games which test entrepreneurship and freedom of thought.86 Marks and Spencer considers the barriers young people may have had in gaining qualifications and focuses on “personality, culture fit and things such as communication, motivation, behaviours and values” in their recruitment.87 Some of the UK’s largest employers therefore clearly already recognise the value of non-academic skills and attributes and are adapting their recruitment processes accordingly. However, research by the Social Mobility and Child Poverty Commission88 shows that such alternative measures are less readily learned by those from lower economic or social backgrounds.89 This is opportunity hoarding as discussed at paragraph 13.

56.It is very important that large employers address the barriers faced by young people. This also applies to public sector employers, including the Houses of Parliament. But doing likewise remains a challenge for smaller businesses. Ninety-nine per cent of the UK’s businesses in 2015 were SMEs. This equates to 5.4 million businesses, 5.1 million of which were micro-businesses.90 Some of these will be businesses which have the capacity simply to copy the changes in recruitment practices that larger businesses have made. But smaller businesses will have much less flexibility over the numbers of staff they can employ, meaning the consequences are much greater if they take on someone who is not able to do the role properly. They also have less money to spend on developing more creative recruitment processes or to be able to support more vacancies because they take longer recruiting people. These constraints dictate the use of more familiar recruitment practices. They also increase small businesses’ reliance on personal recommendations through networks of family and friends.

Box 6: large, medium and small employers

A large employer is one which employs over 250 people. Medium and small employers are often referred to as small and medium sized enterprises (or SMEs). A business is normally considered to be an SME if it employs between 10 and 249 staff. Businesses which employ 0–9 people are called micro-businesses.

57.We raised the problems small businesses can find in being more inclusive in their recruitment practices with witnesses. Andrew Hodgson, Vice-Chair of the North East Local Enterprise Partnership Board, said that “it is difficult to get a strategy [to make recruitment more inclusive] embedded through the SME community because clearly business people want to know what is in it for them.”91 The Forum of Private Businesses told us that their members felt that “not enough is being done to support them in recruiting the right people and in particular de-risking92 the recruitment process so that micro businesses … can be confident to recruit potentially high risk employees (young people, or the long-term unemployed).”93 For recruitment practices across the labour market to become genuinely more inclusive, a way will need to be found to help SMEs to appreciate the potential value of recruiting young people from a wider pool of talent than those who have recognisable qualifications, or who have been personally recommended to them. There would be real value to everyone involved in doing so. As well as increasing the opportunities for social mobility, it would strengthen SMEs’ workforce by ensuring they are getting those people with the skills they need from the widest possible pool of candidates.

58.Employer recruitment practices disadvantage those in the middle and at the bottom end of the labour market. Small and medium-sized businesses in particular rely on informal means of recruitment, such as word-of-mouth. Using this sort of recruitment means that applicants’ existing social connections and networks are important and lead to their success. Not all young people will have these connections. We welcome the fact that some employers are already changing their recruitment practices to address these problems. We note however that these changes are not widespread, are limited to the largest employers and will not go far enough on their own to achieve real progress.

50 See note of focus group (Appendix 4).

52 Written evidence from ThinkForward (SMO0092); ASDAN (SMO0054); The Edge Foundation (SMO0024); Impetus – The Private Equity Foundation (SMO0066); National Literacy Trust (SMO0014); emfec (SMO0113); City Year UK (SMO0079); Inclusion Trust (SMO0107); Barclays PLC (SMO0115); The Prince’s Trust (SMO0040); Association of Teachers and Lecturers (SMO0084); Chartered Institute of Personnel and Development (SMO0043); ICAEW (SMO0063); OCR (SMO0060); KPMG (SMO0121); Impetus — The Private Equity Foundation (SMO0066); The Found Generation (SMO0101); PSHE Association (SMO0016)

53 Written evidence from Barclays PLC (SMO0115)

54 Q 55 (Neil Carberry)

55 Written evidence from Barnardo’s (SMO0128)

56 Written evidence from Federation of Small Businesses (SMO0096)

57 Q 177 (Prof Kevin Orr)

58 OECD, ‘Learning for Jobs’, (2014): [accessed 22 March 2016]

59 KPMG, ‘UK Annual Report 2015, (December 2015): [accessed 22 March 2016]

60 Written evidence from KPMG (SMO0121)

61 Written evidence from Prof Kate Purcell, Prof Anne Green, Gaby Atfield, Dr Charoula Tzanakou, and Prof Phil Mizen (SMO0145)

62 Written evidence from UKCES (SMO0001)

63 See for instance Dr Gavan Conlon, Pietro Patrignani, Iris Mantovani, UKCES, The death of the Saturday job: the decline in earning and learning amongst young people in the UK (June 2015): [accessed 22 March 2016]

64 Written evidence from Herefordshire Council (SMO0020)

65 Q 191 (The Rt Hon Nicky Morgan MP)

66 Q 77 (Maggie Walker)

67 Q 76 (Maggie Walker)

68 Q 76 (Sam Monaghan)

69 Written evidence from Barnardo’s Focus Group (SMO0133)

70 Q 75 (David Pollard)

71 Written evidence from ThinkForward (SMO0092)

72 Demos, ‘Learning by Doing’, (June 2015): [accessed 22 March 2016]

73 Written evidence from the Federation of Small Businesses (SMO0096)

74 See written evidence from Prof Kate Purcell, Prof Anne Green, Gaby Atfield, Dr Charoula Tzanakou, and Prof Phil Mizen (SMO0145)

75 Written evidence from The Prince’s Trust (SMO0040)

76 See written evidence from The Big Academy (SMO0116); The Edge Foundation (SMO0024); Prof Alison Fuller and Prof Lorna Unwin (SMO0010); Careers South West (SMO0095); Leeds City Region Enterprise Partnership (SMO0049); Prospects Services (SMO0091); Department for Employment and Learning, Northern Ireland Executive (SMO0034); Federation of Small Businesses (SMO0096); Telford and Wrekin Council (SMO0009)

77 Written evidence from the Federation of Small Businesses (SMO0096)

78 Written evidence from Telford and Wrekin Council (SMO0009)

79 See written evidence from Capp (SMO0069) and ICAEW (SMO0063)

80 Written evidence from Pret A Manger (SMO0041)

81 Written evidence from New Economy (on behalf of Greater Manchester Combined Authority) (SMO0088); Northamptonshire Enterprise Partnership (SMO0094); The Science Council (SMO0120); Capp (SMO0069); Barclays PLC (SMO0115)

82 See written evidence from Prospects Services (SMO0091); ASDAN (SMO0054); Federation of Small Businesses (SMO0096)

83 Q 13 (Moira McKerracher)

84 Ibid.

86 55 (Emma Codd)

87 Q 55 (Tanith Dodge)

88 The Enterprise Bill currently before Parliament (see Box 8) will change the name of the Commission to the Social Mobility Commission.

89 Social Mobility and Child Poverty Commission, Elitist Britain? (28 August 2014): [accessed 22 March 2016]

90 House of Commons Library, Business Statistics, Briefing Paper, Number 06152, 7 December 2015

91 Q 120 (Andrew Hodgson)

92 In this instance, the risk would be of spending money recruiting and training someone who ultimately could not perform the role well. A candidate is thought to be ‘high risk’ if they may need more investment in development to do the job than is acceptable.

93 Written evidence from the Forum of Private Businesses (SMO0048)

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