The great apprenticeship turn-off & the UK skills gap
by Kate Smedley
Apprenticeships are failing to attract the very people they were designed for, according to a new report from the Social Mobility and Child Poverty Commission. The number of people under 25 enrolling on apprenticeships rose by only 4% between 2010-2014 which currently represents only 4,200 in that age group. With a skills shortage across many sectors, such as tech, banking and finance and construction, the apprenticeship 'turn-off' is exacerbating the problem, but what is causing it?
What’s causing the turn-off?
Two principal issues are causing young people to turn away from apprenticeships:-
• Apprenticeships aren’t regarded as a positive move as they don’t represent an improvement in educational terms. The report found that 97% of apprentices age 18-21 are enrolled on schemes which are A-level equivalent or lower.
• Most apprenticeships for young people are in low skilled, low paid jobs, in industries such as social care, health and hospitality and catering. There is also some concern that the government’s apprenticeship levy, which comes into force in 2017, will result in employers using funding solely to give credibility to low level training schemes.
University is regarded as a better option by young people in terms of career prospects, but as we’ve previously reported, almost 60% of graduates are working in jobs that don’t require graduate qualifications.
Are younger people chasing university qualifications to no avail?
A recent article in the Guardian suggests not. Over the course of a career, graduates can reportedly earn up to £500,000 more than non-graduates. Headlines can be deceiving, however. The same article reported that young people who completed Level 5 apprenticeships could expect to earn £52,000 more during their career than graduates from what were considered ‘non-elite’ universities. A further report from the Bank of England suggests that the graduate pay premium is falling, standing at 34% in 2015, compared to 45% in 1995.
The number of graduate vacancies depends on geographical location and the type of job. For instance:-
• There are 30 times as many vacancies for graduates per capita in Cambridge compared to Sunderland.
• A third of jobs won’t require degree level qualifications across the UK by 2022.
• 60% of London-based jobs will require graduate calibre candidates by 2022.
It is also heavily influenced by the choice of degree. A recently published list of the preferred disciplines for employers was dominated by STEM (Science, Technology, Engineering and Maths), while the least popular were degrees in arts based subjects.
That’s not deterring young people. The Bank of England also found that one in three employees in today’s workforce is now a graduate. This compares to just one in 12 in 1985 and one in six in 2000. In terms of much wider access to further education, it represents a huge step forward, but the perception that the degree is losing its value persists.
Where does that leave employers?
The UK is facing a battle to attract young people into the areas affected by the skills shortage, such as STEM, which have seen 74% and 56% falls among girls and boys respectively at secondary school level. Furthermore, only a quarter of A-level students study two or more STEM subjects.
Moving forward, this skills shortage will intensify. As we highlighted in a recent article, UK employers are already facing a battle to attract the skills they need in key areas, such as tech and finance.
Apprenticeships are failing to fill the void, however. Until they are regarded as a feasible choice for young people, the skills gap will persist.
For employers in search of the best available talent, our advice is:-
• Identify the specific skills needed for open jobs. Some can be trained, while some require a formal qualification. Be realistic about what your business needs.
• Liaise with schools, universities and educational institutions to offer advice on the types of skills which are needed. One third of young people considering university don't know what to study and are, it seems, making choices that will fail to enhance their career prospects.
• Invest in apprenticeship schemes that offer viable career. The Social Mobility and Child Poverty Commission recommended that more apprenticeships should offer qualifications equivalent to a university degree.
• Create transparent cultures, offering equal opportunities, particularly addressing the gender pay gap which is apparent at all levels in the workforce, including among graduates.
• Implement effective talent acquisition strategies to hire the best fit for the job. This requires the removal of ‘graduate filters’ from screening processes to prevent unconscious bias or discrimination and encourage young people to consider alternatives to university.
The government has pledged to deliver 3m more apprenticeships by 2020, with the aim of attracting people under 25 to enrol on future schemes. It is destined to struggle unless its ‘employer brand’ undergoes an overhaul. Without a change in perception of the value of apprenticeships, UK employers will continue to experience a shortage of critical skills.
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