Youth unemployment is quickly becoming a global problem. Why?


Read the news and you’ll quickly be reminded that youth unemployment is a persistent problem not just for Australia’s youth. Let’s explore what experts suggest are the best ways that companies can help.

In a piece recently published by the World Economic Forum by Christopher J. Nassetta, president and CEO of Hilton Worldwide, the author discusses the biggest issue he hears about from world leaders, hotel owners and employees in the hundreds of communities where Hilton operates: youth unemployment.

It’s no surprise why, he says. The Economist estimates that there might be as many as 290 million 15- to 24-year-olds not participating in the labour force. And while it’s a global trend, the solutions he proposes highlight the ways businesses can position themselves as architects of change.

Global reasons for youth unemployment are many and varied, from lack of opportunity to skills gaps. Think tank Social Ventures Australia (SVA) suggests that the main reasons for the sustained growth in Australia’s high youth unemployment are:

  • A non-buoyant labour market for young people post Global Financial Crisis (GFC).
  • A downturn in the number of entry-level positions and apprenticeships available.
  • The casualisation of the workforce and the reality that older employees are not transitioning to retirement at the same rate as pre-GFC.

Actually, when compared to other countries, Australia’s stats are not all doom and gloom: The Global Youth Wellbeing Index rates Australia’s youth wellbeing at number one, ahead of Sweden, South Korea, the United Kingdom and Germany, respectively.

However, that’s probably not all that comforting if you’re an 18- to 25-year-old who’s currently sending hundreds of CVs into the ether each week with no job offer in sight.

That’s where you come in.

It’s clear that youth unemployment is an issue that’s bigger than any one company or industry, and multifaceted in its nature. The traditionally limited relationships between businesses and young people needs to improve as a first step to adapt to the demands of an evolving employment landscape in Australia.

This, as Nassetta suggests, requires a broader commitment by independent bodies and companies to help young people “become employable and employed.”

Hilton, for example, has committed to helping at least one million young people by 2019 by connecting with them through supply chain and volunteer programs, preparing them through mentorship and training programs, or employing them directly.

SVA, while recognising the policy role that Government must play, comes to a similar conclusion. Their study quotes Jonas Prising, global CEO of Manpower, who argues that “collaboration between government, industry and educators” is key to creating the “agile, flexible and more productive workforce” that Australia needs to reduce youth unemployment and meet its skills gaps into the future.

So, what can your business do to upskill young people for work?

  • If you’re finding it difficult to find appropriately skilled workers for entry-level positions, consider developing a targeted program to help get youth candidates ‘job ready’. If this isn’t within your capabilities, you can partner with a not-for-profit service provider who can help give unemployed youth the capabilities they need.
  • Build in a six-month traineeship or structured internship with a clear pathway to employment for youth looking to gain entry into your field.
  • Develop stronger ties to educational organisations and tertiary training programs. A recent report by McKinsey showed that while 72 per cent of education providers believed young people were graduating well-equipped for the workforce, only 44 per cent of employers felt the same way. More engaged business models between companies and educators are key to developing a job-ready youth workforce.
  • Re-set your thinking to appreciate that there are in fact many factors that contribute to youth unemployment, not just the individual. As The Conversation reports, there is much to find fault in Australia’s current youth unemployment policies. Newstart is set at a level that is unable to cover basic living standards, employment services set quotas for job applications – and stiff penalties for failing to meet those quotas. Finally, vocational training is costly, poorly regulated, and isn’t required to offer courses that address labour shortages.

For more references regarding hiring young employees, see the Fair Work best practice guide, or visit AHRI ASSIST.

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Youth unemployment is quickly becoming a global problem. Why?


Read the news and you’ll quickly be reminded that youth unemployment is a persistent problem not just for Australia’s youth. Let’s explore what experts suggest are the best ways that companies can help.

In a piece recently published by the World Economic Forum by Christopher J. Nassetta, president and CEO of Hilton Worldwide, the author discusses the biggest issue he hears about from world leaders, hotel owners and employees in the hundreds of communities where Hilton operates: youth unemployment.

It’s no surprise why, he says. The Economist estimates that there might be as many as 290 million 15- to 24-year-olds not participating in the labour force. And while it’s a global trend, the solutions he proposes highlight the ways businesses can position themselves as architects of change.

Global reasons for youth unemployment are many and varied, from lack of opportunity to skills gaps. Think tank Social Ventures Australia (SVA) suggests that the main reasons for the sustained growth in Australia’s high youth unemployment are:

  • A non-buoyant labour market for young people post Global Financial Crisis (GFC).
  • A downturn in the number of entry-level positions and apprenticeships available.
  • The casualisation of the workforce and the reality that older employees are not transitioning to retirement at the same rate as pre-GFC.

Actually, when compared to other countries, Australia’s stats are not all doom and gloom: The Global Youth Wellbeing Index rates Australia’s youth wellbeing at number one, ahead of Sweden, South Korea, the United Kingdom and Germany, respectively.

However, that’s probably not all that comforting if you’re an 18- to 25-year-old who’s currently sending hundreds of CVs into the ether each week with no job offer in sight.

That’s where you come in.

It’s clear that youth unemployment is an issue that’s bigger than any one company or industry, and multifaceted in its nature. The traditionally limited relationships between businesses and young people needs to improve as a first step to adapt to the demands of an evolving employment landscape in Australia.

This, as Nassetta suggests, requires a broader commitment by independent bodies and companies to help young people “become employable and employed.”

Hilton, for example, has committed to helping at least one million young people by 2019 by connecting with them through supply chain and volunteer programs, preparing them through mentorship and training programs, or employing them directly.

SVA, while recognising the policy role that Government must play, comes to a similar conclusion. Their study quotes Jonas Prising, global CEO of Manpower, who argues that “collaboration between government, industry and educators” is key to creating the “agile, flexible and more productive workforce” that Australia needs to reduce youth unemployment and meet its skills gaps into the future.

So, what can your business do to upskill young people for work?

  • If you’re finding it difficult to find appropriately skilled workers for entry-level positions, consider developing a targeted program to help get youth candidates ‘job ready’. If this isn’t within your capabilities, you can partner with a not-for-profit service provider who can help give unemployed youth the capabilities they need.
  • Build in a six-month traineeship or structured internship with a clear pathway to employment for youth looking to gain entry into your field.
  • Develop stronger ties to educational organisations and tertiary training programs. A recent report by McKinsey showed that while 72 per cent of education providers believed young people were graduating well-equipped for the workforce, only 44 per cent of employers felt the same way. More engaged business models between companies and educators are key to developing a job-ready youth workforce.
  • Re-set your thinking to appreciate that there are in fact many factors that contribute to youth unemployment, not just the individual. As The Conversation reports, there is much to find fault in Australia’s current youth unemployment policies. Newstart is set at a level that is unable to cover basic living standards, employment services set quotas for job applications – and stiff penalties for failing to meet those quotas. Finally, vocational training is costly, poorly regulated, and isn’t required to offer courses that address labour shortages.

For more references regarding hiring young employees, see the Fair Work best practice guide, or visit AHRI ASSIST.

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