The challenges facing Generation Z

The difficulties Gen Z have faced and how they can be supported during this challenging period.

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It is National Careers Week 2021 (#NCW2021) and this year it looks a little different.  For the past year, the pandemic has been a key decision maker in terms of careers. Furlough has become a household word. Whilst there is no doubt that the scheme has helped protect jobs, unemployment still rose  by 5.1% (between October and December 2020) and is expected to increase further.

The devastating impact of mandatory Covid-19 closures upon industries such as hospitality, retail and entertainment are a regular feature of business news. What is reported less frequently, however, is the impact of the pandemic on youth unemployment. In March 2020 half of those aged 18-23 were found to have lost their jobs. More recently, it has been reported that the under-25s account for more than half of the fall in total number of employees.

These 18-25 year olds, also referred to as Generation Z, have undoubtedly suffered because of the pandemic. Getting on the job ladder is no easy task but now even those who have been successful are in fear of losing their jobs.

In this blog we look at Generation Z, the difficulties they have encountered during the pandemic and how young people can be supported during this challenging period.

How the pandemic has affected Gen Z

Gen Zers were born between 1996 and 2010 making many recent university graduates. In the first half of 2020, graduate job advertisements fell by 60.3% compared with a 35.5% fall in total job adverts. This has caused a significant increase in competition for grad jobs. In the recruitment sector, for example, the average number of applicants for each graduate job rose from just under 50 in 2019 to nearly 200 in 2020. There are fewer jobs around for Gen Zers and those available are far harder to secure.

In addition to graduate jobs, apprenticeships have also stalled. Between 23rd March and 30th June apprenticeship starts halved compared to the previous year. Whilst apprenticeship starts are beginning to recover, there is still much work to be done if pre-pandemic numbers are to be reached.

The pandemic has also seen reduced pay for many Gen Zers.  This is partly due to the fact young people are willing to “trade down” as entry level jobs become more competitive.

Young people are facing serious difficulties because of Covid-19. The government has stated that education will play a key role in helping young people, and indeed the economy, to recover post-pandemic. With many Gen Zers now past school age we found ourselves asking what options are available to them?

Investing in Generation Z

To bridge the skills gap brought about by the pandemic, the government is investing in education and aims to support Gen Zers as they look to progress in their chosen career paths. On Wednesday 3rd March 2021, Chancellor Rishi Sunak delivered his spring budget and made several important announcements regarding the FE sector:

Cash incentives for employers to hire new apprentices to be doubled.

The Chancellor has announced that any employer hiring an apprentice between 1st April 2021 and 30th September 2021 will receive £3,000 regardless of the apprentice’s age. This sum does not include the £1,000 given to employers who hire apprentices aged 16-18 and those under 25 with an Education, Health and Care Plan.

Matt Wood, Funding and Compliance Manager at Bud said:

“The increase of the incentive sounds positive on the surface, but the old incentive had a low take-up. The ESFA budgeted for 100,000 payments for new hires but saw just over 25,000 claims up to 1 February. Is increasing the incentive simply throwing more money at it and hoping it works? Perhaps the old incentive wasn’t enough to encourage employers to hire new apprentices and the £3,000 incentive, along with the easing of lockdown measures, will result in a much-needed boost for employment and apprenticeships.

There’s also a danger that some employers will see this as an opportunity to gain cheap, temporary workers and not provide long-term employment prospects.”

£126 million investment in traineeships.

The government will be investing £126 million in traineeships with the purpose of delivering higher quality work placements for 16-24 year olds. It is hoped that an additional 40,000 traineeship starts will be achieved in the next year.

Matt Wood, Funding and Compliance Manager at Bud explains:

“Traineeships are excellent programmes for young people looking for employment skills and experience, but they are very challenging for providers. The challenges are greatly exacerbated by Covid and, at the moment, the government shows no sign of allowing more flexible work placements. So, whilst workplaces remain closed or partially open, a key aspect of traineeships will be difficult to deliver.

The target of 40,000 new trainees is very ambitious when only 12,000 trainees started in 2019-20. Hopefully the flexibilities introduced this year and the additional funding announced in the budget will help reverse the decline of traineeships.”

‘Portable’ apprenticeships to be launched.

In July, a £7 million fund will be established to “help employers in England set up and expand portable apprenticeships”. It is hoped that these apprenticeships will enable people to work across multiple projects with different employers. This scheme has been coined “flexi-job” apprenticeships and is set to start in January 2022.

‘Help to grow’ scheme for SMEs to upskill.

In the next three years, the government plans to develop the skills of employees in 30,000 small and medium-sized enterprises. The government has allocated £60 million for this scheme in 2021-22 and a further £75 million for 2022-23.

These funding schemes represent an opportunity for Gen Zers. It is great that the government has increased apprenticeship funding regardless of the age of the apprentice. The ‘portable’ apprenticeships and ‘help to grow’ scheme will also benefit Gen Zers.

The National Skills Fund

The government has promised £2.5 billion will be made available over the next five years through the National Skills Fund (NSF). This will allow Gen Zers to train, become more skilled and enter better-paying jobs. The Level 3 Adult Offer and Skills Bootcamps will form part of the NSF. Whilst the Level 3 Adult Offer will ensure all adults aged 24+ can achieve their first Level 3 qualification, Skills Bootcamps will allow individuals to develop at an even higher level. The Bootcamps will afford people the opportunity to build up sector-specific knowledge and fast-track to an interview with a local employer.

The National Skills Fund provides an opportunity for Gen Zer’s as they work to become more qualified and enter the job market.

The Future

The pandemic is far from over and we have yet to face all its consequences. Unemployment is expected to continue rising for some years and the future looks particularly uncertain for Generation Z. It is predicted that young people are a third less likely to be in employment three years after entering the job market than previously because of the pandemic. Government funding could, therefore, prove crucial to the career prospects of Gen Zers.

Vocational training such as apprenticeships and courses funded by the NSF will help provide young people with the skills needed to progress in their chosen career paths. Additionally, such training will provide employers with skilled employees who have sector-specific knowledge and experience. Today, it is more important than ever that the FE industry pulls together to optimise the ability of Gen Zers to enter the skills market.

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