According to research by the Prince’s Trust, fears about their jobs, their skillsets and future opportunities are weighing heavily on young minds, with more than half of young people agreeing they have “lost confidence in themselves” as a result of the pandemic.

The report based on a survey of over 2,000 young people also found that those from lower income backgrounds and those who have spent time out of work during the pandemic, are more likely to report negative experiences, including a loss of self-confidence and poor mental health.

The findings also show that the pandemic has caused young people to lose faith in their skills for work and in their future prospects.

A summary of the research findings is shown below:

• More than half of young people (52%) agree they’ve lost confidence in themselves as a result of the pandemic.
• 44 % of young people agree they don’t know how they’ll get their life back on track.
• Less than a quarter of young people (22%) say they feel confident in their future career. For NEET young people, this dropped to just 9%.
• A quarter of young people (24%) worry they do not have the skills for the jobs that are available to them, and 44% agree that over the course of the pandemic, they have even lost confidence in their ability to do the job they are trained to do
• However, 45% agree that the time to retrain and gain new skills has made them feel optimistic about their future.

There was a clear correlation between young people’s personal circumstances and how they feel in themselves and about their future careers.

• 60% of young people from lower income backgrounds and 55% of those who experienced unstable employment report having lost confidence in themselves as a result of the pandemic (compared to 52% of all young people surveyed).
• The pandemic may also have impacted young people’s overall self-esteem, with 53% agreeing they have lost confidence in the way they can handle social situations and 54% finding it harder to build new relationships.

The confidence young people feel in their future career and skills for work has substantially eroded since the pandemic began. During this time, many young people have experienced significant disruption to their employment and education and missed out on many other interactions at a critical development stage in their lives.

To see the full report click here.

 

The Young Women’s Trust has conducted research looking at the experiences of young women in the current labour market.

The pandemic has disproportionately affected both young people in general and women economically. Official data shows that unemployment rates amongst young women were particularly high during each lockdown period and are higher overall than in 2019.

Even before the pandemic, there is evidence to suggest that young women faced specific barriers to employment and are more likely to be classed as ‘economically inactive’ than young men. This is often a result of caring responsibilities, health issues or a lack of available opportunities. The impact is felt most strongly amongst those with multiple intersectional experiences, including: –

• Care experienced young women.
• Those with long-term physical or mental health problems.
• Young women from racially minoritised communities.

The Young Women’s Trust heard from over 1,000 young women aged 18 to 30 about their experiences of unemployment, navigating inadequate opportunities and claiming benefits. They asked young women to tell us about the challenges they are experiencing, how they are impacting their lives, and how they would like to be supported to overcome them.

The findings

It was found that: –

• The lack of flexible and accessible job opportunities is preventing young women from entering the workforce.
• Young women from minoritised groups face additional challenges and barriers when looking for work or claiming benefits.
• The benefits system is difficult to navigate, and many young women are struggling to live comfortably on the benefits they receive.
• The impacts of unemployment, underemployment and claiming benefits are pervasive across young women’s lives and takes a toll on good mental health.
• Young women do not feel listened to or supported by the government, and many do not feel confident about their future prospects.
• But more positively, young women show incredible resilience, hope and ambition, even when systems or services do not always give them reason to.

To see the full report from the Young Women’s Trust, click here.

The House of Lords Youth Unemployment Committee published a report at the end of November 2021 looking at unemployment amongst young people age 16 to 24.

Unemployment in this age group has been problematic for a long period of time and today there are 800,000 young people (12.6% of 16 to 24-year-olds) who are neither working nor in full-time study.  Additionally, 2,631,000 (9.3%) are not in any form of education, employment or training (NEET), while 3,475,000 (7%) are unemployed with 163,000 (2.4%) of these being unemployed for at least six months.

The UK’s youth unemployment rate (currently 11.7%) continues to be worse than other comparable countries including Japan, Germany, the Czech Republic, Israel, Mexico and Switzerland.  The impact of youth unemployment can endure for years, damaging individuals’ life chances and work prospects. It could potentially cost the economy £10 billion in 2022 in lost productivity, tax revenue, and additional welfare costs.

Despite this, total funding for post-18 further education (FE) has fallen by over 50% since 2009–10, while spending per student in colleges is 11% lower than a decade earlier.  The supply of opportunities for young people to take on apprenticeships continues to lag behind demand, and long-running biases against technical education continue to persist.  At the same time, economic changes, technological advances and the drive towards the green agenda have resulted in skills shortages in the jobs market that young people are not being effectively prepared to meet.

The report considers youth unemployment, education and skills in England. The longstanding drivers of youth unemployment were looked at such as the skills gap that affects many young people as well as careers education, work experience and the need to tackle disadvantage.

The report also found that there are systemic challenges faced by those with special educational needs and / or disabilities which were largely ignored in the Government’s response to the COVID-19 pandemic.  Additionally, many young people from ethnic minority backgrounds face institutional and systemic racism, while young women may face sexism at work and struggle to access childcare.  All these factors combined, demonstrate that improving the employment prospects of young people is a very complex and difficult challenge.

To see the full report and additional commentary from the from the House of Lords Youth Unemployment Committee, click here.

A new report from the Resolution Foundation (RF) shows that while recessions have lasting impacts on the UK labour market, each has a different legacy such as high unemployment or stagnant pay.  However, the scale of the Covid-19 crisis, its cause, and the speed at which it hit, have all been different from previous crises.

While Covid-19 has brought new challenges it is unlikely to result in high unemployment following government intervention and the introduction of the Job Retention Scheme (JRS) which protected over 11 million jobs. However, remote working and changes to different industry sectors has altered the way that we work and will work in future.

Unemployment will be less of a post-pandemic challenge than expected.  While the UK labour market was hit hard there has been a swift recovery with a record number of job vacancies now being advertised.

Despite the record number of vacancies across all industry sectors, organisations are struggling to recruit in what has become an increasingly tight labour market as, at present, there are only 1.3 unemployed people per vacancy, the lowest level since records began in the early 2000’s.

This hiring boom means we are not seeing the rise in unemployment and poor- quality work that has characterised most recessions. Unemployment peaked at 5.2% last winter, just 1.2 % above its pre-crisis level, and as of Q3 2021 was just 4.3%.  Additionally, long-term unemployment has been falling since spring 2021, and youth unemployment is now just below its pre-crisis level.

Despite a strong recovery, labour market disruption over the past 20 months has disproportionately affected the youngest, oldest (age 55 to 64) and ethnic minority workers, as the first year of the Covid-19 crisis has led to a larger fall in labour market participation among working-age adults than any other crisis in the last four decades.

Additionally, the pandemic has led to big sectoral changes.  It has not only changed the amount of work people are doing – it has changed the types of jobs being done in the economy too, and this change has been unusually rapid. From the very start of the crisis, the pandemic has been sectorally uneven, as lockdowns and social distancing restrictions closed customer facing sectors like hospitality while demand ramped up in sectors such as health and care.

While new entrants to the labour market are moving into growing sectors, people leaving shrinking sectors have either become unemployment or economically inactive.  Concerns about job quality therefore remain.

While sectors like hospitality and leisure have reopened, workers are moving into occupations that do not match their skill level. The share of workers who are in a higher-skilled job than a year earlier has fallen back to levels last seen in 2012.  Moves into lower skilled jobs have increased, while the share of people who are over-educated compared to the average level of educational attainment for the occupation they are in, has reached a record high.

As the recovery continues to take hold and a wider range of opportunities become available, policy makers need to support workers to move into jobs that match their skills and experience as this would be a fairly easy way to boost productivity.

To see the full report and additional commentary from the Resolution Foundation, click here.

A new report from the Institute for Fiscal Studies (IFS) provides evidence that finishing school when labour markets are weak leads to poor subsequent labour market prospects, particularly those leaving school at younger ages. The report finds that these scarring effects are larger and more persistent for young adults from the lowest-income backgrounds.

Recent recessions have brought with them concerns about “lost generations” of young adults who will end up bearing long-lasting scars from entering the labour market at an inopportune time. This is grounded in the observation that the brunt of employment losses in these recessions have fallen on younger workers and that young workers who fail to find employment struggle to match the early career wage growth experienced by those who do.

Such concerns appear to be well founded, with a growing literature finding scarring effects in the labour market that last for up to ten years on average. These effects are thought to occur for reasons as varied as the depreciation of general human capital, psychological discouragement and worse matches between workers and firms. In addition, there is evidence of impacts on crime, substance misuse and mortality.

Young people from less advantaged backgrounds are more exposed to weak labour market conditions than college graduates in part because of the industries and sectors they are more likely to work. If this group of people also take longer to recover from labour market shocks, then it is likely that scarring effects will be more persistent.

The IFS research suggests that those leaving education, at ages 18 or 19, are particularly sensitiveness to the strength of the initial labour market. However, findings also indicate that increased educational attainment can substantially buffer a young adult from absorbing large financial losses during an early-career economic downturn.

The research also finds that negative effects are substantially larger and more persistent for young adults from lower income backgrounds, particularly those who leave education before the age of 20. This mirrors the findings in Schwandt and von Wachter (2019) where more economically vulnerable groups – ethnic minorities and non-college graduates – bore some of the largest labour market scars from a poor start in the labour market.

Additionally, it is these young adults who are also more likely to work in sectors such hospitality and retail which have been disproportionately affected by the pandemic.

To see the full report and additional commentary from the IFS, click here.

A new report from the Chartered Institute of Personnel and Development (CIPD) provides a qualitative examination of the labour market in the context of the pandemic and migration restrictions.

Its key motivations are both to assess the true extent of the re-emergence of labour market shortages, the underlying factors behind them, and to understand how employers are coping with and responding to them.

The report highlights several issues that are critical to understanding current labour shortages.  Firstly, it is clear that labour shortages are rising, but these are restricted to a narrower range of occupations and industries – such as hospitality, arts and recreation and transport and storage – than many commentators suggest.

As both the survey data and focus group discussions illustrate, the incidence of labour shortages in many low-paying sectors is no more prevalent than before the pandemic in the vast majority of cases.

The research shows that some employers, mainly larger ones, have become better at sourcing labour from the domestic workforce. Upskilling and apprenticeships are the most popular responses to labour shortages.

Raising wages is another popular tactic used by employers, although many feel that this is unviable or unworkable in their sector, especially hospitality and social care.

Other tactics include offering a wider range of flexible working arrangements, developing career paths for those in entry-level roles and developing relationships with local education institutions.

However, this is offset by a tail of employers who are either in denial about labour shortages or in ‘wait and see mode’ in terms of a response.

Results from the young, unemployed jobseeker groups reaffirms the negative perception many jobseekers have of low-paying industries despite the pandemic. It was a very common view among our two groups of young jobseekers that the six low-paying industries covered in the research represented jobs that involved hard work, low pay and insecure work which offered little prospect of progression.

On the upside, it seems that some young people would be prepared to endure low pay for a period provided that suitable training opportunities and promotion possibilities were provided. This suggests that the tactic to raise wages, and in some cases, to offer ‘golden hello’ financial incentives to join an organisation, needs to be broadened to attract more applicants.

Despite the efforts of some employers to increase interest in roles, it is clear that some could also improve their HR practices. The research shows that some employers in low-wage industries are constricted to a narrow range of recruitment channels and labour pools.

The most recent official data shows that virtually all the extra jobs since the onset of the pandemic have been for temporary staff (up by 136,000 or 9%) even as the proportion of the workforce in temporary employment that would like a permanent job rose sharply during the same period (up by 134,000 or 34%). It therefore appears that inadequate people management and development practices are a key under-reported factor behind the shortages reported by some employers.

In addition, relatively few employers are aware of or have the resources or expertise to take advantage of various government initiatives, such as Kickstart.

To see the full report and additional commentary from the CIPD, click here.