Commission for Developing Scotland’s Young Workforce

Background, Conclusions and Implementation Programme

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Background to the Commission• The Commission for Developing Scotland’s Young Workforce was

established in January 2013

• Chaired by Sir Ian Wood, it drew its membership from Scotland’s industry and education communities.

• It was asked to develop recommendations to Scottish Ministers and COSLA on:

– Improvements to vocational and further education starting in the senior phase of CfE; and

– Increasing employer engagement with education and youth employment

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Approach• Significant amount of evidence gathering• Direct face to face discussions (300+ people)

• 2 consultations and a number of ad-hoc information collection exercises

• National summit• Young people’s summit• Employers seminar• HR directors seminar

• A number of regional sessions (Galashiels to Stornoway)

Since the start of the economic downturn youth unemployment has risen more quickly than for other age groups

• Unemployment rates for young people are consistently higher than those for other age groups, and have also seen the largest increases in the last few years.

• For 16-24s, initially (2008-2010) the sharp rise was due to more young people continuing in full-time education. This shift to education was largely from employment, causing the overall active population to shrink.

• Consequently, unemployed young people accounted for a larger proportion of the remaining active population.

• Between 2010 and 2011, the increase in the unemployment rate was driven by increasing unemployment.

• The unemployment rate for young people has fallen over the last two years but remains high by historical standards.

Source: Annual Population Survey, Jan – Dec, 2004 to 2013. ONS (2005-2014)

Unemployment rates in Scotland by age

unemployedUnemployment rate =

workers + unemployed

Young people are important in the labour force

• For at least the next 40 years, today’s young people (16-24s) will form part of Scotland’s working age population (defined as all people aged 16 to 64).

• By 2030, every person aged under 25 today (2014) will be aged between 16 and 40. Not including migrants, projections suggest this group will account for 45 per cent of the total working age population in 2030.

• Looking only at those young people aged under 16 today, they will account for 27 per cent of the working age population in 2030.

• Over time, estimates suggest the working age population will form a smaller part of the overall population - falling from 65 per cent in 2014 to 59 per cent in 2030.

• In Scotland in 2013, there were around 593,000 young people aged between 16 and 24 (Annual Population Survey, Jan-Dec 2013).

• Just under half of these young people were in full-time education, just over half were not. Most young people not enrolled in full-time education were working.

• Many young people who are in full-time education also work.Young people in Scotland’s Labour Market, Jan - Dec 2013Estimated change in Scotland’s population 2014 to 2030

Source: Annual Population Survey Jan – Dec 2013. Office of National Statistics (ONS) (2014) Source: Projected Population of Scotland (2012-based). National Records of Scotland (2013)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2014 2030

65+

25-64

16-24

0-15

Everyone under 25 in 2013 will be aged 16+ in 2029. This represents 45% of the total working age population in that year.

227,000in employment

53,000unemployed

42,000 are underemployed

51,000inactive

593,00016-24 year olds in Scotland

331,000not enrolled in full-time education

85,000in employment

147,000inactive

28,000unemployed

16,000 are underemployed

260,000enrolled in full-time education

10,000 are inactive due to temporary or long term sickness

20,000 are inactive as they are looking after family or home

22,000 are inactive for other reasons including because they are a student

The cost of youth unemployment is significant

• Being unemployed while young can affect future earnings as wages remain lower throughout their working life, even if the person is not unemployed again. It can also increase the chances of being unemployed again.

• Other consequences of being unemployed when young emerge later in life including lower life satisfaction and happiness, poorer health, a higher risk of depression and lower job satisfaction. The longer the initial spell of unemployment, the greater the negative effect.

• Those most at risk of the long term effects of youth unemployment are school leavers and vulnerable young people with low skills, no/low qualifications and no or little work experience. In 2013, there were 29,000 young people aged 16-19 not in education, employment or training.

• Estimates in 2012 suggested that the average annual cost in benefits of a young unemployed person (18-24) is £5,661.51. Based on this, moving 100 of these young jobseekers into employment would save over £500,000 a year in benefit spend.

Other sources:Local Area Labour Markets in Scotland - Statistics from the Annual Population Survey 2013. Scottish Government (2014)The Cost of Exclusion: Counting the Cost of Youth Disadvantage in the UK. Prince’s Trust (2010)The Cost of Youth Unemployment. ACEVO Commission on Youth Unemployment (2012) Young People and the Great Recession. Bell and Blanchflower (2011) A Stalled Generation: Transitions to Adulthood in Scotland Today. Anderson, S & Dowling, S (2012)

Number of under 25s unemployed by duration 2013

All under 25s unemployed for 12 months +

Source: Annual Population Survey, Jan – Dec 2013. ONS (2014)

Source: Annual Population Survey, Jan – Dec 2013. ONS (2014)

Many young people leave secondary school without achieving any Highers

• Around 51,000 young people left school in 2011/12. When leaving school, just over half had attained a highest qualification which was at Higher (SCQF 6) or above.

• Some groups of young people are more likely than others to leave school with lower levels of qualifications. These include looked after children, young people with disabilities and those from the most deprived backgrounds.

• The risk of becoming unemployed is greater for those with the lowest qualifications. Four out of every 10 young people who attained a qualification at SCQF level 3 or below become unemployed on leaving school.

• However, the number of young people leaving school with low qualifications (SCQF level 3 or below) is small. This means that only around one third of all unemployed school leavers have low qualifications.

• Even though they are less likely to become unemployed, the much larger groups of school leavers attaining qualifications at SCQF level 4 and 5 account for around two thirds of all unemployed school leavers.

Highest qualification of all secondary school leavers , 2011/12

Destinations of all secondary school leavers , 2011/12

Source: Summary Statistics For Attainment, Leaver Destinations and Healthy Living No. 3, – Follow Up Destinations 2011/12. Scottish Government (2013)

Source: Summary Statistics For Attainment, Leaver Destinations and Healthy Living No. 3, – Follow Up Destinations 2011/12. Scottish Government (2013)

Young people can face difficulties when moving into the labour market

Source: Employer Perspectives Survey 2012. UKCES (2013)

• The current labour market is challenging for all job seekers with only 45 per cent of employers in Scotland recruiting in 2012. Only three out of every 10 employers recruited a young person.

• The smallest firms (2-4 employees) are those least likely to recruit a young person (or to recruit at all) but, because they are the largest group of employers, they still account for around a quarter of all employers who did recruit a young person.

• The two main reasons given by employers who did recruit but did not take on any young people were that the young people were not of sufficient quality or that no young people had applied.

• The most commonly mentioned issues relating to the quality of young applicants were: a lack of work experience; a lack of skills; poor attitude and motivation; a lack of qualifications; and a poor quality application.

• The way employers recruit also has an impact on young people looking for work. Informal recruitment methods, such as word of mouth, can disadvantage young people who may not have these networks in place or be able to access these networks through family or friends.

• A 2013 survey looked specifically at the recruitment of education leavers, and found that 29 per cent of Scottish employers had recruited any education leaver. 17 per cent had recruited school leavers, 11 per cent had recruited college leavers, and 12 per cent had recruited higher education leavers.

• The survey also found that 65 per cent considered school leavers to be prepared, rising to 78 per cent amongst those employing recruits from FE colleges and to 85 per cent for recruiters of Scottish HE graduates.

Number of employers in Scotland recruiting by size, 2012

Proportion of employers in Scotland recruiting by size, 2012

Source: Employer Perspectives Survey 2012. UKCES (2013)

Other source: Employer Skills Survey 2013. UKCES (2014)

Modern Apprenticeships offer a route to sustainable employment

• In 2013/14 there were 25,284 Modern Apprenticeship (MA) new starts. Half of these (52 per cent) were aged 16-19, around one quarter (27 per cent) were aged 20-24 and the remainder (21 per cent) were aged 25+.

• The bulk of MAs were at Level 3 (59 per cent) and Level 2 (28 per cent). Only 3 per cent of MAs were at Level 4 and around 0.5 per cent were at Level 5.

• The majority (80 per cent) of MAs in Scotland last for more than one year, more than half (58 per cent) last for more than 2 years.

• In 2012/13, the most commonly undertaken MA frameworks by 16-19s were Business & Administration, Hospitality, Retail and Construction. For 20-24s, those most commonly undertaken were Hospitality, Health and Social Care, and Retail.

• MAs offer a route to sustainable employment - in 2012/13 nearly all apprentices (86 per cent) were in work 6 months after leaving their apprenticeship. The likelihood of being in work after leaving a MA increases with the age of the apprentice and the level of the apprenticeship.

Modern Apprenticeship New Starts 2013/14 (No.)

In work 6 months after leaving MA 2012/13 (%)

Most commonly undertaken frameworks (volume of new starts) by age 2012/13

All Levels

16-19 Business & Administration (1,670) Hospitality (1,226) Retail (1,203) Construction (1,165) Engineering (1,112) Hairdressing (989) Childrens Care, Learning & Development (949) Automotive (761) Health and Social Care (526) Customer Service (407)

20-24 Hospitality (1,580) Health and Social Care (1,116) Retail (788) Customer Service (442) Business & Administration (384) Freight Logistics (381) Construction (328) Management (261) Food Manufacture (240) Engineering (215)

Source: Training Programmes statistics 2013/14 Skills Development Scotland (SDS) (2014)

Source: Training Programme Statistics, 2012/13* SDS (2013)

Source: MA Outcomes Survey 2012/13, SDS (2013)*

*2013/14 data not yet available at time of writing

The majority of employers are not involved in apprenticeships, those that are report high satisfaction

• Only 13 per cent of establishments in Scotland currently have or offer apprenticeships. Smaller employers are much less likely to have/offer apprenticeships than larger employers. However, in terms of the volume of employers involved, the smallest employers (2-4 employees) are the largest group.

• There are two main reasons why employers in Scotland do not currently offer apprenticeships – they either actively choose not to (staff are already fully skilled or they prefer to recruit skilled staff) or they perceive a range of structural barriers which prevent them from doing so (apprenticeships are not offered for their industry, are not suitable for their business or they currently have a recruitment freeze).

• Satisfaction of Scottish employers involved with MAs is high with 85 per cent reporting they were satisfied with the relevance of the training to their needs and 83 per cent stating they were satisfied with the quality of the training provided.

• Many Scottish employers who offer MAs have been offering them for several years. Nearly three quarters have been offering them for more than three years and over a third for more than 10 years.

• Over half (53 per cent) of Scottish employers who are involved with MAs said were vital to their business and a further 22 per cent viewed them as important.

Source: UK Employer Perspective Survey 2012. UKCES (2013)

Proportion of establishments in Scotland who have apprentices or currently offer an apprenticeship by size and sector

Establishments in Scotland who have apprentices or currently offer an apprenticeship by size

Other sources:Modern Apprenticeship Employer Survey 2012. SDS (2013) Source: UK Employer Perspective Survey 2012. UKCES (2013)

The transition story for young people varies• Most young people move into a ‘positive destination’ after

leaving school. This includes continuing their education, starting work, training, undertaking voluntary work or an activity agreement. However, the underlying transition story is more complex.

• Girls are most likely to continue their education after leaving school - nearly 7 out of every 10 female school leavers go down this route (4 to higher education, 3 to further education). However, they tend to cluster into specific subject areas, reflecting the wider occupational segregation seen in the labour market.

• Over half of male school leavers continue their education. They are more likely to go into work after leaving school than their female peers.

• Similar to young women, the majority of black and minority ethnic young people continue their education after leaving school. Just over half (53%) of all Non-white young people are in higher education 9 months after leaving school. Again, they tend to be concentrated into a limited range of subjects.

• Half of all young people with a declared or assessed disability are in further education 9 months after leaving school. However, by the time they are 26 they are four times as likely to be unemployed as their non-disabled peers. Those in work will be earning 11% less than others with the same level of qualification.

• Looked after children are least likely to go into a positive destination after leaving school – one in three are unemployed 9 months after leaving school. Very few go into higher education. This is related to looked after children leaving school at a young age with low levels of qualifications.

Destinations of all secondary school leavers by characteristic , 2011/12

Chart sources: Summary Statistics for Attainment, Leaver Destinations and Healthy Living No. 3, – Follow Up Destinations 2011/12. Scottish Government (2013) Education Outcomes for Scotland’s Looked After Children, 2011/12. Scottish Government, (2013)

Other sources: Fulfilling Potential Slide Pack. Office for Disability Issues

Chart notes:1 White includes White-Scottish, White-Other, White-Gypsy Traveller, White-Other British, White-Irish or White-Polish. All other known categories are classified as Non-White.2 Data for Non-White young people in Activity Agreements is suppressed due to small numbers.3 Disability is either declared or assessed.

1,2

3

Some countries have consistently low youth unemployment but the reasons are complex

• International youth unemployment rates vary widely and the reasons for these differences are complex. These could include the education system, labour market institutions and the strength of the national economy.

• In some countries, youth unemployment has remained low despite the global economic downturn. Countries such as Germany, Austria and the Netherlands have consistently had low youth unemployment over the last 5 years.

• Other countries, such as Spain and Greece, have persistent and high levels of youth unemployment. This has been a feature of their labour market for some time.

Other sources:International Lessons: Youth Unemployment in the Global Context. The Work Foundation (2013)

Youth (15-24) Unemployment Rate – EU 28 and Scotland – February 2014 (non-seasonally adjusted)

Notes 1. Estimates for Scotland and UK from the LFS, Jan-Mar 2014 and covers those aged 16-24. Rankings for Scotland and the UK are based on unrounded data. Data for other EU countries are from Eurostat.2. * indicated data rolled over from most recently data available 3. UK includes Scotland

Source: Labour Market Briefing – May 2014. Scottish Government (2014)

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International Best Practice

• The best performing European countries in terms of youth unemployment have 2 things in common:

– A highly regarded vocational education system which starts in secondary school and allows for progression with a significant element of work-based learning; and

– Significant employer involvement in the development and delivery of education.

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Headline Findings• Focus on university pathways in schools. • Careers advice starting too late to influence choices.• College system going through significant reform – creates opportunities.• Limited progression opportunities within MAs – opportunities to

develop.• Limited employer engagement with education.• Poor parental understanding of options.• Work experience is of fundamental importance to young people and

employers but is generally very formulaic.• Some groups of young people are at greater risk of employment than

others.• Majority of young people leaving school with only limited preparation

for what comes next.

Headline Recommendations

• Earlier range of career education opportunities to a national standard

• New approach to work experience• Senior phase vocational pathways delivered in partnership

between schools and colleges• Expansion of Modern Apprenticeships at the higher levels• Regional Invest in Youth Groups• Focus on small employers and young people facing barriers

within recruitment incentives• Sustained focus on addressing equalities issues• Focus on Key Performance Indicators

Government Response

• Developing the Young Workforce Programme 2014-2021

• Our vision: To develop Scotland’s young workforce by providing young people with learning which is directly relevant to getting a job, benefiting individuals and improving the economy through increased youth employment

Responding to ambitious recommendations

• Fundamental cultural change (parents, young people, schools, employers) + accompanying further development of supporting policy = system change

• Changing the way we support at least half of all young people into employment.

• Covers a range of Ministerial portfolios

Government response – changing the system through a seven year programme

Short term: business shaping apprenticeships ; new invest in youth accolades; employability features in school inspections;

Medium term: senior phase pathways introduced for learners; roll out of high level apprenticeships;

Longer term: learners benefiting from these opportunities will enter labour market from end of academic year 2016/17 and beyond.

Engaging those intended to benefit

• Parents and teachers – need to feel confident that Highers and university aren’t the only route to success and that the pursuit of vocational qualifications do not limit aspirations; need to be informed about the variety of options on offer.

• Young people – need to consider different options with a clear view about their job prospects.

• Employers – need to recruit younger people and take on a role in education and training.

• But none of these groups can be brigaded easily.

• We need to influence their thinking through innovative engagement, at both a national and regional level.

Governance Structure

Programme Board

A system underpinned by

industry engagement

A college system fully focussed on

employability and responding to

industry’s skills needs at the regional and

national levels

Apprenticeship opportunities for young people to

achieve a flexible set of qualifications up to and including degree level

while in work.

Clearer vocational pathways, starting in the senior phase

which lead to industry recognised qualifications

A more intensive, industry influenced

focus on employability within the CfE broad

general education

Equalities

• Career education in schools;

• Careers advice;• Teacher Education.

• Regional & Local structured creation of senior phase vocational pathways;

• Interventions to support re-engagement;

• Measuring attainment across academic and vocational routes.

• Higher level MAs targeted on economic growth;

• STEM ring-fence;• Access to

apprenticeships;• Pre-apprenticeship

training.

• Focusing college outcome agreements;

• Higher level skills/STEM;

• Employment services.

• Education Scotland focus on industry;

• Skills planning;• Employer

contribution.

National Advisory Group Political and senior

stakeholder leadership

Chan

ge T

hem

es

Schools Colleges

The right elements for change• A clear vision

• A defined set of actions and measures

• An approach of building on existing assets with renewed focus and some additional resource

• A disciplined Programme management approach

• Implementation plans, set in context of refreshed youth employment strategy, published at the end of 2014

• A means of sustaining the political will through the National Advisory Group

Key Documents

• Commission reporthttp://www.scotland.gov.uk/Publications/2014/06/4089

• Implementation plan http://www.scotland.gov.uk/Topics/Education/edandtrainingforyoungple/ScottishGovernmentResponse/DevelopingYoungWorkforceStrategy

Questions?