KickStart Lite: SME Free

I started writing these pieces, first on LinkedIn then, taking the opportunity to get them out to a wider audience through FE News, to share the findings of my dissertation. This looked at what prevents construction employers recruiting NEETs into the industry. I am not for a moment suggesting that this was ground-breaking research, but felt there may be some findings that may be of interest to others. Since I completed the Masters we have entered the strange new world of Covid and as we move away from lockdown, the negative impact this is having on employment, especially for those younger people who already face barriers to employment, is becoming more apparent. 

As usual, these are my own views and in no way represent those of my current employer.

I had only produced a few pieces when the government announced that, in an attempt to address the impact on employment for these young people, they would be launching the Kick Start scheme. On initial reading this seemed to meet some of my conclusions: paid work experience in new job roles and targeted at 16-24-year olds furthest from the job market, NEETs. The only downside to the announcement was a lack of detail. I laid out my hopes on what this scheme would look like in a previous FE News piece.

We finally have the details and, as promised, it appears to meet everything they originally announced, which is great, but, my concern is that the scheme as it stands, seems designed to exclude SMEs. 

SMEs not welcome

The biggest stumbling block is the ‘minimum of 30 placements’ clause. As mentioned, my area of interest is construction where we have over 300,000 businesses operating in the UK, but only around 300 can be classed as large. I suspect that a vast majority of the other 99% would struggle to meet this commitment, especially as many will be sole, or micro-traders. With the best will in the world, they could not meet this condition, especially by the current scheme end date of 31 December 2021.

I should say here that I appreciate they have provided the option of consortia working and I will come onto that later.

I think I understand why the government has chosen this model. In order to be able to offer 30 placements a company needs to be fairly substantial, and as such, would have dedicated HR resources and the facilities to bring in these placements. These departments would, hopefully, provide the day to day support and mentoring, as well as identifying and arranging training needs. Most SMEs do not have these resources to call on. 

Anyone who has worked with NEETs will know that the issues that have meant they are now NEET require specialised support and perhaps governments view is that this is best provided by larger organisations. I am not saying that this is wrong, just that better developed scheme could open up Kick Start to many more potential employers. These are not just my views. The Federation of Small Businesses (FSB), as reported in the Financial Times (FT), have criticised the scheme as disadvantaging small businesses from being able to apply directly.

Looking at the recent piece in FE News by Paul Holcroft it is not hard to understand why many SMEs may struggle to address the minimum requirements.  Aside from the issues around the 30 placements, and something that came up frequently during my research, was the minefield of applying to government programmes, with most SMEs stating that they do not have the skills or capacity to do this. In order to complete the application process, employers will need to demonstrate that these are new, quality placements, not just backfilling vacant positions, show how these will support the participant to progress into further education or employment as well as meet the training requirements. 

Part of the research for my Masters identified that SMEs face a number of barriers in recruiting NEETs. These include:

• the time, and understanding of how to create new job roles, 
• navigating the intricacies of signing up to government programmes, 
• an understanding of who NEETs are, 
• the barriers that are preventing them moving into employment,  
• the support that these young people require, and
• the skills development these young people would need in order to progress from the placement.

What SMEs would value, and was felt to be of benefit to both the employer and the young person, was bespoke support, both prior to employing them and while on placement, ensuring that the company understood the young person’s needs and issues, and were given support to manage these, while ensuring the roles on offer provided the best opportunity to progress.  

Consortia

That said, there is the option for employers to join together and form a consortium to submit a bid, but this is easier said than done. I would suggest that most SMEs, especially in construction, may be able to offer one placement at a time. This means with the current end date for the scheme, they could squeeze in two before it closes. If this is the case, then each consortium would require fifteen employers. I am assuming here that the 30 placements would not be starting at the same time, it is unclear if this is the requirement.

The government has said that they will provide £300 to support the bringing together of these groups, along with £1500 to cover support and training, meaning there is potentially £45,300 available to deliver 30 placements over the year. While this may look generous I suspect that additional funding would be needed to deliver a scheme that actually supports these young people, as opposed to one that just massages the figures for the next year. Consortia would probably need to bring in trainers and support workers, as well as providing facilities for training, to help the young people as they near the end of their placement.

Forming consortium will not be a five-minute job, even for a large employer, and as such I can see many SMEs deciding not to pursue this option. As pointed out by the FSB in the FT, it could take months to prepare and recruit to these new posts, impacting on both time and finances for SMEs, who will already be struggling as they move into a post-Covid world. There is some light though as the Treasury have said that they will hold talks to see how the scheme can be made to work for SMEs.

Employment Intermediaries

A suggestion here, again from the feedback during my research, is perhaps if instead of employers applying directly for the funding, the government permitted intermediaries to apply for pots of funding. These could be local authority employment support teams, or third sector organisations, those already operating and with the skills and understanding to both support employers and the young people. In addition, these would have a better working knowledge of the local employment environment. I would go as far as to say that this may be a better model for all the placements to be managed.

These organisations would then contract with a range of local employers to provide the work placement while the organisations would manage the red tape, in-work support for the employers and young people, and post-employment support to move the young people into education or employment. Additionally, they would ensure that the roles offered were generally new roles, not replace current, or laid off staff. 

A fear is that the quality of the actual roles offered may be overlooked in the rush to get as many placements as possible. While I am sure most companies would enter this scheme and stick to the rules, we can all think of companies that may reclassify existing roles and use this as cheap labour. While I know that these potential intermediaries have been negatively impacted over the last ten years there are still a number of organisations operating who could fill this role. Local, available support and project management will help to monitor the quality of the programme and, by engaging with a range of employers from different sector, would make the 30 placement target easier to achieve.

Construction Opportunities

Due to the make-up of the construction industry it may be better placed than other sectors in meeting the schemes requirements. Most of the larger construction companies operate as project managers, using a supply chain of smaller companies to deliver the work. As such they could be in a position to apply for the funding and then contract with their supply chain to deliver the work experience. 

This could have the added bonus where the young people can be moved around with different suppliers over the six months, gaining a more comprehensive taste of the industry and identify the area that most interests them. This would introduce them to a number of employers and address another area that was flagged as a barrier to NEETs entering the industry, word of mouth recruitment.

Anyone that knows me, knows I am not the biggest fan of the current government, but they are due credit for acknowledging the issue faced by those young people furthest from the job market in these times, and launching a scheme that could help address this. My hope is that they take on board the concerns raised by the FSB, and others, review the scheme’s requirements, and come up with a more inclusive programme. I also hope that they recognise that the plight of NEETs is not just a short-term problem and extend the deadline, ideally making this an ongoing programme.  This could offer support to those young people in the future, who in most cases are not in this position through choice, moving from NEET to EET.

Steve Sugden