How to get more young people into employment and self-employment

Enterprise Nation recently held a roundtable event to discuss what can be done to get more young people into employment and self-employment.

The event was part of Enterprise Nation's Talent Hub, supported by Indeed and Employment Hero, which provides entrepreneurs with support on finding, attracting, recruiting and training talent to fuel business growth.

Taking part in the discussion were:

• John Carroll, head of marketing, Employment Hero

• Jessica Hale, senior PR and comms manager (UK), Employment Hero

• Alexandra Neal, engagement strategy senior manager, Department for Education

• Philip Salter, founder, The Entrepreneurs Network

• Erica Chamberlain, head of strategic business partnerships, The Careers & Enterprise Company

• Anita Tiessen, CEO, Youth Business International

• Polly Dhaliwal, COO, Enterprise Nation

• Dan Martin, news reporter, Enterprise Nation

• Liz Slee, head of Media, Enterprise Nation

• Belle MacLeod, people and operations adviser/degree apprentice, Springpod

• Laura Symmons, development director, Launch It

• Sumaya Mahamud, founder of Asleen Online (supported by Launch It)

• Lucille Moffatt, founder of Lucille's Decor (supported by Launch It)

• Debs Ormondroyd, people and retail director, Bird & Blend Tea Co.

• Emma Shields, people and culture manager, Bird & Blend Tea Co.

• Jack Speckman, head of employer engagement, Movement to Work

Read a summary of the discussion below.

Setting the scene

Time poor small businesses with no HR departments are finding it hard to attract and nurture talent. A survey of founders by Enterprise Nation conducted to launch Talent Hub revealed a significant need for support when it comes to hiring, with 62% of early-stage employers seeking guidance on hiring and retaining staff.

Underlying challenges in the labour market remain too. The latest ONS figures show that while there has been a general increase in employment for 16 to 24-year-olds, unemployment has also gone up by 159,000.

Economic inactivity among NEETs (those not in education, employment, or training), has remained broadly stable and coupled with a general decrease in job vacancies, the question is how do we get more young people and so-called "digital natives" into work?

Insights into young people's attitude to work

Data from Talent Hub partner Employment Hero suggests that while the immediate situation might be challenging, Generation Z is actually outpacing other generations in long-term employment trends.

The firm's surveys of SME employees in the UK reveal that soft business skills and experiences are incredibly important to Gen Z. Onboarding, for example, is twice as important to a Gen Z employee compared to any other generation, and diversity and inclusion are four times more critical.

Interestingly, job security is less of a priority for Gen Z, who are more willing to try different roles to find the right fit, showing less long-term commitment to a single employer. Their work patterns also differ, with the younger generation finding they work more productively and efficiently in the afternoon rather than earlier in the day like many older people.

It's important that employers acknowledge these generational differences to build lasting relationships with young talent.

The experiences of young people

Among those taking part in the roundtable were two young people who run their own businesses with the help of Launch It, and another who is taking part in an apprenticeship.

One of the young business owners said she decided going to university might not be for her so looked for something else to do. With just £50 and supported by Launch It, she embraced her creative passion to start an event business. Her initial aims of taking a gap year transformed into a thriving venture, proving that alternatives to the traditional university path can lead to success.

The other young business owner began her venture while studying part-time. Launch It's support in areas including financial literacy has been key to her business's growth.

While she initially considered getting a job to experience both worlds, her current success and enjoyment of her business point towards a sustained entrepreneurial path. This aligns with broader research suggesting many young people desire both a traditional job or career and the opportunity to run a business at some point. Enterprise Nation research showed that 62% of 18-30-year-olds are planning to start a business.

The apprentice joining the roundtable said she had received limited guidance on apprenticeships in college, but she was inspired to do it by her older brother. Her primary motivation was to "hit the ground running" and enter the world of work directly. She balances four days a week at her company with one day at the university studying chartered management. She acknowledged the demanding time management skills required but praised the support she has received from her employer, saying that she "couldn't imagine myself doing anything else now."

Complexities of the apprenticeship system

Apprenticeships are one way to get more young people into employment.

Employers in the room praised the value of apprenticeships in providing practical work experience but highlighted the challenges of the government's apprenticeship levy.

They said that for larger organisations with a substantial levy pot, spending it effectively can be difficult, while smaller businesses struggle to build up funds. The employers said that the current system sees a significant amount of unspent levy expiring and being returned to the Treasury, rather than being reallocated for learning and development.

It was pointed out during the discussion that the apprenticeship levy is being reformed by the government including the increase last year to 50% for levy transfers (up from 25%), allowing large businesses to donate a portion of their levy to smaller companies or other levy payers like the NHS.

The government also offers various incentives, such as employing an apprentice under 25 means no employer National Insurance contributions, and businesses taking on an 16-18-year-old apprentice receive an additional £1,000 incentive. Crucially, for small businesses employing someone under 22, the government fully covers the training costs associated with the apprenticeship. While these incentives exist, the consensus was that more needs to be done to make them more widely known by small businesses

A key concern raised was supporting apprentices from diverse socioeconomic backgrounds. One attendee questioned how to ensure that apprenticeships are accessible to all, not just those with parental support, given the often-modest apprenticeship pay rates. The government does provide a £3,000 bursary for care leavers paid directly to the apprentice, but it was acknowledged there is low uptake due to a lack of awareness.

The discussion also touched on foundation apprenticeships, a new government initiative aiming to bridge the gap between initial entry into a sector and settling on a specific career path within it. These shorter programmes offer exposure to a sector such as construction or digital before committing to a longer-term specialisation.

A crucial takeaway regarding apprentices is their higher retention rate and company loyalty compared to non-apprentices. This makes a strong business case for SMEs to consider apprenticeships, despite initial perceived complexities.

Attendees highlighted examples of resources launched to help young people and employers navigate apprenticeships, such as Amazing Apprenticeships and The Sixth Formers' Guide to Degree Apprenticeships.

Redefining work experience

The importance of early intervention in careers education was discussed. Research shows that career stereotypes can form as early as age seven or eight, making it vital to expose young people to diverse industries and roles from the beginning of secondary school.

Traditional, week-long work experience placements often pose logistical challenges for small businesses. The Careers & Enterprise Company is the government's partner in delivering its ambition for work experience and is piloting a range of approaches and models supported by Careers Hubs and five Multi Academy Trusts.

These new approaches to modern work experience will provide a more flexible approach, encouraging shorter, multi-layered engagements, across different industries, such as half-day visits, project-led work, and virtual experiences. This aims to ease the burden on SMEs while still providing valuable insights for young people. The goal is to move beyond the "making coffee" stereotype of work experience towards meaningful interactions that build essential skills like speaking, listening and problem solving and build the knowledge and behaviours such as email etiquette, basic finance, and increased confidence.

Another point raised at the roundtable was the lack of a clear pathway into entrepreneurship within traditional education. It was noted that young people often "stumble into it," which underscores the need for earlier exposure to entrepreneurial concepts and practical business skills, potentially through flexible work experiences in SMEs, where young people can gain diverse skills like communication and problem-solving more easily than in larger corporations.

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