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Australian employers not doing enough to help young people secure jobs
10/11/2021
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Authors
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Shani Alexander
Shani Alexander, Senior reporter

Employers in Australia are not investing enough to create opportunities for young people, a new report has found, with costs associated with training, mentoring, and supervising identified as a significant barrier to employing young workers.

The “What Will It Take” report from PwC, Social Ventures Australia, the Global Apprenticeship Network, and the Apprentice Employment Network says that employers are reducing investment into training, which is impacting young people’s ability to progress.

The number of entry-level jobs in Australia has fallen by 50% since 2006, with some “middle-skill” jobs that once provided a “stepping-stone” to career progression having disappeared.

It now takes, on average, 4.7 years after graduating for a young person to move into  employment on a full-time basis. This slow climb up the employment ladder is resulting in long-term societal and economic impacts, according to the report.

The report states that young people face an increasingly difficult labour market as traditional entry points into quality jobs for young people have been in decline. This, it said, signalled a loosening of the bond between employer and employee, which can, in turn, impact young people’s ability to progress and compete in the market.

Despite ongoing skills shortages in areas that require vocational qualifications, many young Australians without degrees cannot find jobs that allow them to learn while they work.

“Employers told us that they want to see better-designed incentives, more coherent and comprehensive intermediary support, and a quicker return on investment when they hire young people,” said the report.

Employers recognise and are concerned that, when hiring a young person, there is a cost around training, mentoring and supervising. There was a sense among employers that better-designed incentives that more readily offset all these costs could change organisations’ attitudes towards young worker investment.

“Employers are telling us that they need more skilled workers. Yet employer spending on training has gone backwards and young people are getting fewer opportunities to build their skills at work,” said Dr Lisa Fowkes, director of employment at Social Ventures Australia.

“Young people from lower-income backgrounds are hardest hit. They have fewer opportunities than their parents did to get into the labour market and grow their skills and incomes over time and cycle through insecure work,” she added.

The report said that employers indicated in one-to-one interviews they want to hire young people, but this does not always align with the desire to have employees that can contribute on the job from day one.

“Need for skilled workers has increased, cost of apprenticeships have also increased, but so has uncertainty about future work to support employing apprentices,” said one employer, quoted in the report.

“The increased demands made on employers to cover the training, travel, and accommodation cost for regional apprentices, the need to cover the costs of apprentices’ travel to and from work, and increased workers’ compensation costs have added to the lowering of demand for apprentices,” another employer said.

Key recommendations
The report proposes five measures that could lead to employers hiring more young people:
– the provision of financial levers, which include more tailored subsidies, investment via intermediaries and consideration of schemes to promote training investment by employers;
– revitalising existing support models for employers, which will help them navigate the system;
– the provision of collaborative pre-employment training models where employers are directly linked. This will help ensure risk is shared and does not weigh too heavily on an individual employer;
– the use of apprenticeships to suit industry needs; and
– the procurement and contracting to drive skills development by encouraging employers to consider opportunities for young people, as well as disadvantaged groups through their supply-chain management.

“Past attempts to update the apprenticeship system and support businesses to establish strong training pipelines have repeatedly failed because they have overemphasised some policies at the expense of others,” said Gary Workman, CEO of the Apprenticeship Employment Network.

“Governments have tried lots of different things in an attempt to fix our training system,” Workman added. “But individual measures usually fall short.”

“For instance, wage subsidies can act as a sugar hit by encouraging employers to hire apprentices, but without the right support to manage and retain the apprentice through to a completed qualification, they often crash back out of training. Ultimately this is a bad outcome for the employer and the apprentice, as well as the productivity of the whole country.”

Fowkes concluded that the report showed: “Government investments in training can help but it can’t be training for training’s sake; it needs to be directed to ensuring that more employers step up and create quality job opportunities for young people that allow them to learn while they work.”