In a high-turnover workforce, the recruitment – and retention – of the graduate generation is essential. Helen Swire looks at how firms can attract the best talent
Just about everyone dreams of winning the lottery. What must it be like winning – or sharing – a multi-million pound prize, and what would do if you did won? So if you were told you had won £30,000, what would you do? For many people, such an amount is life changing.
Now imagine the other side of the coin – literally. What if you owed £30,000? What would that mean to your life? What would your concerns and priorities be?
It’s a crucial question – and one that teenagers as young as 16 now have to ask themselves as they make huge decisions about the next step in their lives.
The £30,000 is significant because it is the cost of tuition fees alone for a standard three-year university course. That doesn’t include food, accommodation, travel or books. It doesn’t include the socialising, without which university would be extremely lonely for an 18-year-old who may be away from home for the first time. And it doesn’t include the cost for any student on a course that is longer than three years.
Some will still decide they want a higher education qualification. For others, the first step into the workforce is a welcome relief from the debt-ridden first steps of the average adulthood today. Either way, employers looking for the brightest and best in young talent have the same question: how are they to attract and retain them?
The first question to ask is what graduates are actually looking for: it is unlikely that childcare benefits or long-term health insurance will be high on the list of priorities. Then again, for a cash-strapped generation, traditional ‘young people’ benefits – experience days, restaurant vouchers and so on – don’t necessarily have the same appeal as they used to.
There are, however, benefits on the market that can help younger members of the workforce in a way that finds the middle ground between the ‘fun’ and the long-distance financial.
“Employers don’t necessarily realise what’s important to their graduate employees – it might be something the company can help with, for example help to rent or explaining help to buy,” says Jo Thresher, head of Money at Work at independent consultancy Jelf. “Things like that might be much more relevant to them at this stage than pensions.”
Offering standard benefits via salary sacrifice or other loan repayment schemes is highly attractive. For example, travel loans – even without the salary sacrifice benefit of tax and National Insurance savings – make a huge difference to employees who have to add prohibitive transport costs to already tight monthly budgets.
Numerous reports over the past 12 months have focused on the link between financial worries and mental wellbeing – and so for many employers the focus is not simply on offering cost-effective benefits, but also on having educative ones.
For example, workshops and seminars on workplace savings and personal money management are growing in popularity, and helping graduates have an idea of their potential overall assets as well as the pension they will be enrolled into.
“Younger employees can be engaged with benefits, even long-term ones like pensions, but you’ve got to spend the time getting them to understand their finances in steps,” comments Thresher.
“If you talk about what would happen in certain circumstances, and ask if they are prepared or have emergency savings, then you start the thought process for that graduate or apprentice.”
The road ahead
Much as in the case of financial education, employers are now realising that graduates and apprentices are not necessarily seeking tangible benefits.
“The shift over the past few years is that the need for workplace progression and development is over-arching for all graduates and school-leavers alike,” says Ryan Longmate, joint managing director at Positive Outcomes.
Longmate’s colleague and fellow MD, Kelly Ball, agrees: “They need time and dedication. We make sure the employers we work with are committed to that – we need to ensure young people are nurtured, have their confidence built, and see progression, so that they have a great experience and education as well.”
Many new employees are now citing their greatest workplace disappointment as the lack of personal development or training opportunities they are offered in their job. The chance to work in an organisation – either as a graduate employee, or as an apprentice – that values them as a person and invests time in their career can make a world of difference.
When working with employers and apprentices, Positive Outcomes looks to match the needs of both parties in setting up a scheme.
Ball says: “We make sure that the employer takes them on for 12 months knowing it’s not just a one-year apprenticeship – it’s the start of their career.”
Paying for the apprenticeships
The pledge made by chancellor George Osborne in last year's Autumn Statement to increase apprenticeships by a further three million places by 2020 has ensured that employers will be thinking about how to turn the increased funding into an opportunity for both themselves and young talent seeking to enter the workforce.
However, there remains some controversy around the promise of increased apprenticeships because of the levy that is to be imposed on companies that have a payroll of more than £3m. The levy means these businesses will contribute 0.5% of payroll to the national funding of all apprenticeships.
Larger businesses have reacted to the apprenticeship levy with anger, with retailers such as Tesco and Timpson criticising the policy and saying that it is effectively a payroll tax that will leave them struggling to fund their own apprenticeships.
For smaller businesses, however, the levy can only encourage them to take on more trainees – and the flagship policy signals the government’s commitment to increasing job opportunities.
The initiative is due to come in April 2017 via a digital scheme, and legal and industry experts are wondering how it will be regulated.
“It will encourage employers – but we must ask whether that will be to use apprentices as cheap labour or provide proper training,” says Tessa Fry, partner at GSC Solicitors.
“There've been such schemes before – but they haven’t been very well managed or subject to proper checks, and therefore open to abuse.”
Nevertheless, for many companies, running apprenticeships is a good way of introducing fresh talent that can be trained and developed in-house – as well as avoiding recruitment costs.
“It can work,” Fry says. “But we’re going to need proper regulation, and at present we don’t have that.”
The full spectrum
Fry and others remain positive about the impact on smaller businesses of an increased number of apprenticeships, and the combination of the levy and the heightened focus on student fees has opened up a wider debate for businesses on how they can nurture the youngest talent in the workforce.
Of course, another question is that of the ageing workforce, particularly in the wake of the abolition of the default retirement age – and this will be another management hurdle for HR, albeit at the other end of the demographic scale.
“It would be great if we could join up the thinking around new employees and the later generations,” says Jelf's Thresher. “We want, and need, to keep the skills of the older generations, but we need to have a conversation about when they are ready to go – and then they could train the graduates to fill their shoes when they leave.”
Indeed, the concept of skill-sharing is increasingly being regarded as a benefit for employees both old and new. Those who are approaching retirement have the benefit of the accumulated skills and experiences in their company and the British workforce as a whole – but equally, new joiners bring new skillsets and different ideas, views and suggestions.
Longmate of Positive Outcomes says: “There’ll always be a need for young, ambitious and dynamic people in a workforce, and most places will continue to recognise that.”