Generation exiled: the business risks of discarding young workers

After she was made redun­dant from her role as a writer for French trav­el firm Voy­age Privé in July, Abi­gail Lis­ter, 24, found her­self “fir­ing off appli­ca­tions for lit­er­al­ly any job I could find”. Despite apply­ing for near­ly 100 vacan­cies, she was unable to secure per­ma­nent full-time employ­ment.

“It just seemed impos­si­ble,” says Lis­ter, who esti­mates that she heard back from only 10% of the employ­ers she’d con­tact­ed. “So many young peo­ple with sim­i­lar skills were apply­ing for the same jobs.”

Lis­ter has since become a suc­cess­ful free­lance writer, but her expe­ri­ence dur­ing the Covid cri­sis is not unusu­al. The num­ber of pay­rolled employ­ees in the UK over the 12 months from March 2020 fell by 813,000, accord­ing to the Office for Nation­al Sta­tis­tics. Of this total, 53.7% were aged under 25.  

The Cen­tre for Eco­nom­ic Per­for­mance at the Lon­don School of Eco­nom­ics sur­veyed just over 10,000 peo­ple aged 16 to 65 in the UK between Sep­tem­ber and Octo­ber 2020 about their employ­ment expe­ri­ences dur­ing the pan­dem­ic. It found that 11.1% of respon­dents aged 16 to 25 had recent­ly lost their jobs, com­pared with only 5.3% of those in the sec­ond most bad­ly affect­ed age group – the next youngest (26 to 35).  

Lee Elliot Major, an asso­ciate of the Cen­tre for Eco­nom­ic Per­for­mance and pro­fes­sor of social mobil­i­ty at the Uni­ver­si­ty of Exeter, co-wrote the research report. He warns that the cur­rent high lev­els of youth unem­ploy­ment could scar a whole gen­er­a­tion.  

“Evi­dence sug­gests that, if you lose a job ear­ly in your career, it can cause you to be in inse­cure employ­ment for many years and per­ma­nent­ly dam­age your life­time earn­ings,” Major says.

Such find­ings are also a con­cern for Emma Par­ry, pro­fes­sor of HR man­age­ment and head of the Chang­ing World of Work Group at Cran­field Uni­ver­si­ty. She agrees that there’s “a lot of evi­dence that young peo­ple don’t have the same out­comes in the labour mar­ket lat­er in life if they have become unem­ployed ear­ly in their careers. But, per­haps even more wor­ry­ing­ly, an ear­ly job loss also has an impact on people’s well­be­ing. At the extreme, it can lead to social with­draw­al and men­tal health prob­lems.” 

Those aged 16 to 25 are more like­ly than old­er peo­ple to have been employed in indus­tries worst hit by the lock­down restric­tions – hos­pi­tal­i­ty, retail and trav­el, for instance. But, added to that, their typ­i­cal­ly low­ly posi­tion in the hier­ar­chy has been a key fac­tor in the redun­dan­cy selec­tion process of many firms, accord­ing to Par­ry. 

“Quite often in organ­i­sa­tions, it can be slight­ly eas­i­er to argue in favour of los­ing entry-lev­el employ­ees, either because they’re not as val­ued or they have yet to build up work­ing rela­tion­ships,” she says. “Redun­dan­cy deci­sions shouldn’t be based on any of these fac­tors, of course, but it is some­thing that we do see.” 

What do businesses stand to lose? 

There is a per­sua­sive busi­ness case for keep­ing young peo­ple in employ­ment. Los­ing a gen­er­a­tion of tal­ent could be crip­pling for employ­ers in the longer term. 

Par­ry says: “Evi­dence tells us that organ­i­sa­tions that invest in their employ­ees dur­ing eco­nom­ic down­turns are the ones that do bet­ter com­ing out of them.” 

Diver­si­ty of thought in an organ­i­sa­tion has long been shown to have a pos­i­tive impact on inno­va­tion and mar­ket growth. For instance, research pub­lished in Har­vard Busi­ness Review in 2013 found that firms with “two-dimen­sion­al diver­si­ty” – diver­si­ty across inher­ent fac­tors, such as age, race and gen­der, as well as acquired diver­si­ty, such as lan­guage skills or cul­tur­al flu­en­cy – were 45% more like­ly than those lack­ing it to have increased their annu­al mar­ket share. 

Par­ry believes that any organ­i­sa­tion that los­es its youngest employ­ees risks reduc­ing its diver­si­ty of skills and atti­tudes, along with the proven ben­e­fits these bring. 

“There is evi­dence that younger peo­ple have par­tic­u­lar char­ac­ter­is­tics in being more entre­pre­neur­ial and more moti­vat­ed to learn and devel­op,” she says. “They also bring fresh per­spec­tives and new ideas.” 

Ensuring a sustainable supply of young talent  

Appren­tice­ship schemes offer a route into the work­force for many school-leavers. But such oppor­tu­ni­ties have decreased marked­ly, large­ly because of the Covid cri­sis. There were 36,700 few­er starts in the first half of the cur­rent aca­d­e­m­ic year com­pared with the equiv­a­lent peri­od in 2019/20. 

“We know that organ­i­sa­tions that devel­op tal­ent pipelines, rather than bring­ing peo­ple in at mul­ti­ple lev­els, are often more pro­duc­tive,” Par­ry says. “They have a more loy­al work­force and a more trust­ing rela­tion­ship with their employ­ees.” 

Siemens is one firm that chose to con­tin­ue invest­ing in young tal­ent dur­ing the pan­dem­ic. The British arm of the Ger­man man­u­fac­tur­ing group took on 176 grad­u­ates, interns and appren­tices in 2020, for instance. It plans to bring in a fur­ther 180 young peo­ple through its ear­ly careers pro­gramme this year. 

Valerie Todd, HR direc­tor of Siemens UK and Ire­land, explains the deci­sion: “Down­turns in the mar­ket are short-lived; the val­ue that young peo­ple bring lasts much longer. You need to apply a degree of strate­gic think­ing to main­tain your tal­ent pipeline.” 

She warns that busi­ness­es that fail to do this will be left with skills gaps when their more expe­ri­enced employ­ees leave. “You’re then reliant on recruit­ing in the open mar­ket, where you can face heavy com­pe­ti­tion with oth­er com­pa­nies that have done the same. You’ll find that you’re pay­ing an esca­lat­ed wage bill.”  

Siemens has built rela­tion­ships with numer­ous edu­ca­tion­al insti­tu­tions, includ­ing the Teach First char­i­ty, New­cas­tle Uni­ver­si­ty and the Uni­ver­si­ty of Sheffield. Its schools engage­ment pro­gramme also involves devel­op­ing STEM resources linked to the nation­al cur­ricu­lum. 

For Todd, who has served as a gov­ern­ment advis­er on employ­ment and skills, build­ing a strong tal­ent pipeline entails “tap­ping into com­mu­ni­ties or indi­vid­u­als who may not pre­vi­ous­ly have thought about your organ­i­sa­tion as a poten­tial employ­er”. 

She adds that the stu­dents who engage with Siemens “get an insight of what it’s like to work in an engi­neer­ing or tech­nol­o­gy organ­i­sa­tion. There’s a wider agglom­er­a­tion of ben­e­fits to run­ning these kinds of pro­grammes, because they ben­e­fit the sec­tor you’re in, as well as your own com­pa­ny.” 

Grounds for optimism 

As the lock­down restric­tions are eased, con­fi­dence seems to be return­ing to employ­ers and younger peo­ple. A sur­vey pub­lished recent­ly by LinkedIn revealed that hir­ing activ­i­ty was up 22% per cent in April in the UK, while 84% of 16- to 34-year-olds were feel­ing opti­mistic about their career prospects — the high­est pro­por­tion of all age groups.

LinkedIn’s UK coun­try man­ag­er, Janine Cham­ber­lin, believes that many employ­ers need to change their approach to recruit­ment to bring young tal­ent back in from the cold.  

“Instead of look­ing at how many years’ expe­ri­ence that can­di­dates have or the uni­ver­si­ties they attend­ed, employ­ers should be focus­ing on skills,” she advis­es. “This can go a long way towards attract­ing a much more diverse pool of tal­ent.” 

But any recruiter seek­ing to attract younger work­ers will still need to demon­strate the val­ues they tend to find desir­able in an employ­er, accord­ing to Todd.  

“Even though they’re hav­ing a hard time in the jobs mar­ket at the moment, young peo­ple remain dis­cern­ing buy­ers of employ­ment,” she stress­es. “The things that these can­di­dates most often ask recruiters about are inclu­sion and sus­tain­abil­i­ty. Woe betide you if you can’t give them a good account of what you’re doing in those spaces.”