Generation exiled: the business risks of discarding young workers
The youngest employees are bearing the brunt of pandemic-induced redundancies, but this trend is likely to create problems for businesses in the longer term. Those operating last-in, first-out policies risk jettisoning highly talented post-millennials who could prove vital to their survival.
The Centre for Economic Performance at the London School of Economics surveyed just over 10,000 people aged 16 to 65 in the UK between September and October 2020 about their employment experiences during the pandemic. It found that 11.1% of respondents aged 16 to 25 had recently lost their jobs, compared with only 5.3% of those in the second most badly affected age group – the next youngest (26 to 35).
Lee Elliot Major, an associate of the Centre for Economic Performance and professor of social mobility at the University of Exeter, co-wrote the research report. He warns that the current high levels of youth unemployment could scar a whole generation.
“Evidence suggests that, if you lose a job early in your career, it can cause you to be in insecure employment for many years and permanently damage your lifetime earnings,” Major says.
Those aged 16 to 25 are more likely than older people to have been employed in industries worst hit by the lockdown restrictions. But, added to that, their typically lowly position in the hierarchy has been a key factor in the redundancy selection process of many firms, according to Parry.
“Quite often in organisations, it can be slightly easier to argue in favour of losing entry-level employees, either because they’re not as valued or they have yet to build up working relationships,” she says. “Redundancy decisions shouldn’t be based on any of these factors, of course, but it is something that we do see.”
What do businesses stand to lose?
There is a persuasive business case for keeping young people in employment. Losing a generation of talent could be crippling for employers in the longer term.
Parry says: “Evidence tells us that organisations that invest in their employees during economic downturns are the ones that do better coming out of them.”
Diversity of thought in an organisation has long been shown to have a positive impact on innovation and market growth. Research published in Harvard Business Review in 2013 found that firms with “two-dimensional diversity” – diversity across inherent factors, such as age, race and gender, as well as acquired diversity, such as language skills or cultural fluency – were 45% more likely than those lacking it to have increased their annual market share.
Any organisation that loses its youngest employees risks reducing its diversity of skills and attitudes, along with the proven benefits these bring.
Joanne Finkeldey, Head of People at razorblue says:
“It is evident throughout our company that young people have particular characteristics into being more motivated to learn and develop. They also bring fresh perspectives and new ideas that our company very much values.”
Ensuring a sustainable supply of young talent
Apprenticeship schemes offer a route into the workforce for many school-leavers. But such opportunities have decreased markedly, largely because of the Covid crisis. There were 36,700 fewer starts in the first half of the current academic year compared with the equivalent period in 2019/20.
Downturns in the market are short-lived; the value that young people bring lasts much longer.
At razorblue we chose to continue to invest in young talent during the pandemic. Not only hiring apprenticeships but looking for young people who were at the start of their career in IT, we look for those with a passion to learn and develop with us. We plan to bring more and more young people into the company this year, as well as working with schools, colleges, and universities to kickstart the younger generations career into technology.
Joanne Finkeldey commented:
“This year drove us to apply a degree of strategic thinking into our talent pipeline. The value of hiring young people lasts, and this is showing in the success of our company throughout the past 2 years.”
Grounds for optimism
As the lockdown restrictions are eased, confidence seems to be returning to employers and younger people. A survey published recently by LinkedIn revealed that hiring activity was up 22% per cent in April in the UK, while 84% of 16- to 34-year-olds were feeling optimistic about their career prospects — the highest proportion of all age groups.
“We tend to shy away from looking at how many years’ experience a candidate has, or the university they attended, we focus on skills, passion and their values. This goes a long way towards attracting a much more diverse pool of talent and it is what has helped us attain such a positive workforce.”
Joanne continues “Young candidates have also helped us operate better as a business, they tend to ask questions on topics like inclusion, sustainability, gender equality, the list goes on and these have prompted us to become an even more ethical company in all aspects.”