Since the 2008-09 global financial crisis young people in the UK, lacking in both seniority and experience, have tended to be the first to be let go by a number of companies that have scaled back. The few companies that continued to hire often preferred to take on older, more experienced workers. According to the UK Commission’s Employer Perspectives Survey 2012 (UKCEPS 2012), only 27% of employers in England recruited a young person in the previous 12 months, compared with 40% in 2007, before the recession. 

In recent months, however, a modest recovery in the UK economy has started to improve the job situation for young people. The unemployment rate for 16-24-year-olds eased by four-fifths of a percentage point to 19.9% in the three months ending December 2013 compared with the same period in the previous year, according to the Office for National Statistics. That is lower than the rate of 22.3% registered at the peak in the November 2011-January 2012 period. 

But even before the recession, 14% of the 16-24-year-old group were unemployed (January-March 2008). “Young people have been affected disproportionately since the recession began, but they were already finding it harder to get jobs compared to adults,” says Tony Dolphin, associate director for economic policy at the Institute for Public Policy Research.  So, will the current recovery alone be enough to get young people back into jobs?
 
Old-school education
According to Mr Dolphin and other experts, the UK’s education system has been slow to catch up with transformations in the UK economy and labour market, driven by technology and globalisation. Results of the first annual Survey of Adult Skills by the OECD, published in October 2013, suggest that schools in the UK are falling short in terms of educating students in the technology skills that are vital for many 21st-century jobs. According to the survey, less than one-half of young people in England and Northern Ireland (42.4%) demonstrate high levels of proficiency in computer functions—lower than the OECD average and 21 percentage points below top-performing South Korea.
 
As a result, many young people entering the job market for the first time are not well equipped, or even sufficiently qualified, to fill available positions. The UK currently has 28,000 open IT jobs, and it will need 300,000 digital workers by 2020, according to CompTIA UK, an IT trade association. Despite the large number of young people who are looking for jobs, member companies of the association say they have difficulty finding workers. Graham Hunter, the association’s director for Western Europe, says one problem is that many young people have a negative perception of IT jobs. Schools also need to teach high-value skills, such as coding, not just end-user skills, such as how to format a document.

Microsoft has also noticed a skills gap in the technology sector. Hugh Milward, Microsoft UK’s director of corporate affairs, says jobs requiring technology skills will increase both inside and outside the technology space. “But kids aren’t leaving school with the skillset that will help them to find a job now or to take advantage of future developments in technology.” 

The type of skills employers look for now is also influenced by the UK economy’s focus on the service sector. For Barclays Bank, these skills include confidence and experience when interacting with customers as well as “employability” skills—from workplace-appropriate behaviour to collaborating and problem-solving. “Young people we come across who are struggling for work are low on skills,” says Mike Thompson, Barclay’s head of employability and early career programmes. He says the bank is partnering with schools to work with students in these areas, as well as offering its own apprenticeships. 
 
Lena Levy, head of labour market policy at the Confederation of British Industry (CBI), a lobbying group, says many of the organisation’s members are also concerned that “young people don’t have the right attitudes, behaviours or social skills”. She cites the example of how a young person on a shop floor might stop to answer a text call, and suggests part of the problem may lie with how school systems prepare young people.

A job for the government?
The UK government faces a number of challenges as it tries to get more young people into jobs. For one, it has to address the skills gap. Part of the problem is that schools, community colleges and universities are too separate from the world of work, says Matthew Hancock, minister of state for skills and enterprise. By contrast, in Germany, which has the lowest youth unemployment rate in the EU, employers work closely with the government and unions to ensure that the education system, apprenticeships and vocational programmes teach skills that businesses need. 

Mr Hancock wants there to be more employer involvement in education. To achieve that goal the Department for Education is getting employers involved in study schools and technical colleges. Other reforms include giving teachers more freedom and making computing part of the national curriculum for schools, starting in September 2014. As well as studying a rigorous curriculum and taking examinations to match the world's best, pupils also need to develop the necessary skills and attitudes that employers want. With that in mind, the careers advisory services of academic institutions should have a strong awareness of the skills that employers are looking for, as well as what the local labour market needs. 

The classroom isn’t the only place to teach skills. The UK has a long tradition of apprenticeships that help young people gain the kind of work experience needed to kick-start their careers. But these have tended to be in manufacturing, not the service sector, which today accounts for three-quarters of the economy. That imbalance should be addressed to ensure that the available apprenticeships better reflect the needs of the British economy.

Another problem is how both employers and prospective employees view non-academic qualifications. The previous government’s focus on university education cast a shadow over the benefits of vocational routes. Now such alternatives to university are a distant second choice for many young people, to be avoided if possible. For employers, the problem with the UK’s vocational pathway, says Glenda Quintini, a senior economist at OECD, is that “the whole vocational system and apprenticeships remain a bit scattered”, with employers uncertain about the quality of certifications. Reforming standards, which is part of the current government’s plan for apprenticeships, could help restore trust in such programmes. Setting out clear benefits to both the student and the employer and offering widely recognised qualifications could also help to change these negative perceptions. 

As the UK economy continues to grow, a number of young people will be absorbed by companies as a matter of necessity. But higher GDP figures won’t solve the UK’s youth unemployment problem. Identifying which skills the economy is likely to need in the future should inform educational reform, taking on board the views of employers in key sectors. Better education and greater work experience won’t just help the individual young person looking for a job—it will strengthen the UK’s labour force, improving its competitiveness in the global economy.