“Double skills gap” holding back young people in the AI-era workplace

New report: “Double skills gap” holding back young people in the AI-era workplace, with employers highlighting a lack of emotional resilience and teamwork skills

• Employers are struggling to find young people with the life skills to succeed in a workplace increasingly shaped by the transition to net zero and the growth of AI, with 61% reporting a lack of emotional resilience and 45% reporting a lack of teamwork skills

• According to new research from Demos, recruiters are reporting a “double skills gap” with 60% struggling to find the right technical skills and 50% saying they can’t find the transferable skills they need, such as leadership and teamwork

• The think tank argues that the drive to net zero and the growth of AI have put a premium on the kind of transferable skills that cannot be automated, making their absence particularly alarming for the employability of young people  

• In the first quarter of 2023, the youth unemployment rate was 10.8%, compared to 3.7% for all UK adults. The cost of youth unemployment to the UK economy over the next decade has been estimated at £28 billion

• Among the report’s recommendations are greater government support for community-based extracurricular activities to make sure they are accessible to all children, regardless of socioeconomic background

• Bear Grylls, Chief Scout author of the report’s foreword, says opportunities to develop resilience, teamwork and leadership skills should be “available to all” to protect today’s young people who are under “more pressure than ever”

Employers are struggling to find young people with the life skills to succeed in a workplace increasingly shaped by the transition to net zero and the growth of AI. On average, 58% reported a lack of the kind of transferable skills that cannot be automated by new technologies, according to new research from the cross party think tank Demos. 

The Employability Badge: Skills for life, work and a stronger society, out today, reveals the challenges businesses are facing in recruiting young people:

• 69% of employers said they struggle to hire young people with sufficient leadership skills
• 61% of employers said they struggle to hire young people with emotional resilience
• 45% of employers said they struggle to hire young people with sufficient teamwork skills 

The report, based on polling, focus groups and expert interviews, also identified what it describes as a “double skills gap”: a lack of both technical and transferable skills that are crucial in the workplace. 60% of employers struggle to hire young people with sufficient technical skills and 50% say they struggle to hire young people with sufficient transferable skills like leadership, teamwork and emotional resilience.

However, the report found that while technical skills are important, transferable skills are particularly valuable for young people’s employability: 

• 57% of employers say they value transferable skills over technical skills, while just 10% value technical skills more
• 81% of employers and employment experts say they value teamwork either moderately or greatly 
• 70% of employers and employment experts say they value emotional resilience moderately or greatly; while 59% say the same for leadership skills 

The research also surveyed young people, including former Scouts, to understand their experience of entering the job market:

• 61% said a lack of work experience meant they did not feel sufficiently prepared for starting work after school or university 
• 44% said a lack of career guidance was the main reason they did not feel sufficiently prepared for starting work after school or university 
• 74% of Scouts alumni say they feel optimistic that they have what it takes to get what they want out of their career in comparison to 62% of people who did not attend Scouts
• 53% of Scouts alumni said they were prepared for starting work for the first time compared with compared with 37% of people who did not attend any extracurricular activities when they were younger

The Employability Badge also highlighted an alarming level of inequality around access. It found that people who accessed no extracurricular activities when they were younger were far more likely to be from lower socioeconomic backgrounds, and that one in four people from the lowest socioeconomic grade had never accessed any form of extracurricular activity.

Alice Dawson, Researcher at Demos and co-author of The Employability Badge, said:

“Our research shows a reckless disconnect between UK education policy and what the job market actually wants from new recruits.

“Education reforms of recent years have cultivated a narrow focus on academic education, leaving far too many young people exposed to a workplace that is increasingly concerned with transferable skills. As a country this means we’re left with an unfilled vacancies, and, most importantly, unfulfilled potential. 

“The mission for the next government must be to reverse this trend. Our report sets out clearly how this can be achieved and how we can ensure that the next generations of workers have the skillset to thrive in tomorrow’s workplace, where transferable life skills will have never been more important.”

Bear Grylls OBE, Chief Scout and author of the report’s foreword, said: 

“Our young people are under more pressure than ever to have the right skills and experience to help them succeed – while protecting their mental health and wellbeing.

“Employers say they struggle to recruit the resilience, teamwork and leadership skills they need. Gaining these skills depends on having the opportunity and the courage to reach out of your comfort zone to learn and grow.

“Ensuring access to the power of skills learned beyond the classroom would create real change for individuals and a stronger society.”

The report has set out a number of policy recommendations for local and national government, as well as extracurricular groups and organisations, to help address youth unemployment and tackle unequal access to opportunities among young people from lower socioeconomic backgrounds. They include: 

• National and local governments to provide additional funding targeted at widening access. While the Department for Culture, Media and Sport has recently announced a large amount of funding for the youth sector and uniformed youth groups to expand access, the report calls for longterm, sustained revenue funding commitments
• The UK Shared Prosperity Fund (UKSPF) to expand its criteria to allow some of the funding it provides to local authorities to be allocated to extracurricular and volunteering organisations to support more people to develop transferable skills 
• The UK government to work with employers to establish an employer-supported volunteering programme, enabling employees to take time off work each month to volunteer with extracurricular organisations or in schools 
• Extracurricular groups and organisations, including those run by schools, should tailor their activities to help to futureproof young people’s employability skills.
• The UK government should reintroduce the statutory requirement for Key Stage 4 pupils to undertake work experience.