Why we need a Careers Strategy to support economic growth

The UK is experiencing an unusual economic problem.  We have signs of a thriving economy – low unemployment and skills shortages, but with an economy teetering around stagnation and recession. Through a comprehensive strategy, career development can play a key role in unlocking the workforce potential of the large number of working age people who are economically inactive, as well as enable people to upskill and reskill.

The UK’s skills-based growth problem

We hear repeatedly from industries as diverse as the creative arts and engineering about the challenges of recruiting and retaining staff with relevant skills.

With an unemployment rate of only 4.2%, this is normally an issue associated with a thriving economy and high levels of employment. But the UK economy isn’t thriving, it’s stalled, and the numbers of adults who are not working (‘economically inactive’) is at a staggering 21.9% – that’s 9.3 million people economically inactive compared to 1.4 million unemployed.

Young people not in education, employment or training (NEET) has risen to 1.2 million, while there are an estimated 1 million fewer over-50’s in the workforce since the pandemic started. [All figures from Learning and Work Institute analysis of ONS data]

Driving economic growth and removing barriers to opportunity

Economic growth and removing barriers to opportunity are at the heart of the new government’s agenda, and these two goals can be addressed with some of the same solutions. We need to help those not working to move back towards and into the world of work, as well as enabling everyone to develop new skills to meet changing employer needs. This adds capability to the workforce that fuels economic growth, while ensuring more people experience fulfilling work.

Reducing record NHS waiting lists will help those off work because of their own ill-health or who care for family members who are unwell. And investment in other support services will help those with other barriers to working, such as ensuring benefits policies don’t penalise work or skills development. But a key enabler of bringing people back into work has been undervalued for far too long – career development.

At its heart, career development helps people make informed decisions about their future and act upon them – defining the career they aspire to and how it aligns with their current and future life situation, identifying the skills they need to develop, the pathways that will best suit them to gain those skills and ultimately moving into work that puts those skills to good use. To support young people and adults, career development professionals maintain an understanding of the skills required by employers, the routes through education and training and the jobs available. They bring this knowledge together with their professional training and development to help each individual make informed decisions that are right for them.

The evidence for career development impact

Every career development practitioner can give inspiring examples of how their work has helped someone change their life for the better. There is a strong social justice and moral argument for ensuring that those who need help getting into and on in work receive it. But from a policy perspective, career development is sometimes treated as a cost to contain, despite the growing arguments showing that investment in high quality career development pays for itself many times over.

The Investing in Careers report, written by the International Centre for Careers Guidance for the Career Development Policy Group (CDPG), outlines the cuts to careers guidance in England over the past 14 years, limiting the focus of career development activities. It also captures the evidence for the positive return on investment from career development – with every £1 spent on supporting young people yielding a return of £2.50 and each £1 spent supporting out of work adults generating even more at £3.20.

To further understand the potential of career development, the CDI commissioned a YouGov survey of 5,004 UK adults in May 2024, asking about their perceptions of their career, the careers support they have received and their views on the career development profession. We found that, while 54% of adults are positive about their future career, this drops dramatically as people get older, from 71% for 18-24-year-olds to 33% for 55-65-year-olds. Similarly, those on incomes of £100,000 or more were most positive about their future careers, at 84%, dropping to only 32% for those on £10,000 or less.

76% of people stated at least one aspiration for their career over the next 5 years, but while 80% reported facing one or more barriers to achieving these, the proportion accessing employability and career development services was low. The highest used service, at 13% of respondents, was Jobcentre Plus only 48% of users would recommend the service, while 86% would recommend private career development professionals and 78% would recommend public careers services such as the National Careers Service, Skills Development Scotland, Careers Wales or the Careers Service Northern Ireland.

Around 90% of those supported by a career development professional found it helped them make career decisions, but we estimate that fewer than 10% would access professional support. This is down to lack of awareness, concerns over cost and lack of understanding of what careers services do and who they support.

In short, many people have career aspirations and career development has been shown to have a positive impact, but they aren’t aware of – or able to access – that support. [CDI research to be published in autumn 2024].

A strategic approach to careers policy

Yet, for all the evidence, policy continues to focus on operational delivery – how can a pre-defined level of service be delivered to young people and adults within a constrained budget? Of course governments need to work within budgetary constraints, but this cost-based approach to setting career development policy restricts thinking about its potential.

Switching to a strategic perspective establishes career development as an investment opportunity; how can career development play a greater role in addressing the economic and social challenges we face, and how would further investment drive economic growth, reduce cost elsewhere in the system and have a far greater social impact?

This is most critical in England, with the more fragmented and variable nature of delivery of careers services. But the public careers services in Scotland, Wales and Northern Ireland are also under budgetary pressure and it would be a backward step if financial pressure caused them to reduce their more complete services.

In England, we need a comprehensive career guidance strategy that doesn’t just look at how the standards are delivered, but looks at the potential beyond that. The government are committed to developing an industrial strategy, supported by a skills strategy through the new Skills England body. We need this in turn to drive a careers strategy that engages people with the skills system to develop the capability that is needed by the current and future economy, and will lead to fulfilling careers.

We need young people to leave school with both lifelong learning and career management skills, so they can not only move onto their next step, but have the core capabilities to define and achieve career goals throughout life. We need people of all ages to be able to access appropriate levels of careers support so they can continually evolve the capability they bring to the workforce, react to life changes and remain in fulfilling work for as long as they wish.

Over the last few years, many of the building blocks for a good foundation of careers provision have been put in place, but they are still constrained and the pace of improvement isn’t going to address our challenges as a country. Pilot programmes such as the work in primary schools are a positive step, and we need more of these opportunities to test approaches, but then also the backing to scale them where they are shown to have impact.

We have many frameworks – such as the CDI’s Career Development Framework – outlining what great career development outcomes look like for individuals, as well as policy initiatives from many organisations, including the CDPG’s Career Guidance Guarantee, setting out the attributes of a comprehensive careers system.

Every interaction between a client and a career development professional can be life-changing, and the cumulative impact of these millions of interactions can add up to an enormous effect on the economy and society. We just need to think differently about the potential of the profession – as an investment rather than a cost.

By David Morgan, Chief Executive for Career Development Institute