Developing young workforce strategy - impact on employer engagement: evaluation

The current and changing context for DYW

This section sets out the current and changing context in which the Scottish Government and DYW operates in. It covers the impact of the COVID-19 pandemic on young people, the changing economy and labour market, the No One Left Behind approach, and what this means for the future focus for DYW.

COVID-19 and young people

The impact of the COVID-19 pandemic has highlighted and exacerbated a range of existing inequalities relating to skills and access to work. As employers adapted to home working, and to health and safety requirements for industries that could not transition to remote working, this had an impact on the type and scale of opportunities available to young people.

The recent DYW research report (DYW, 2021) on the Impact of Virtual Engagement on Young People demonstrated that, while online engagement can encourage more employers to volunteer their time, this presents a trade-off, with most young people preferring face-to-face engagement with employers and interactive work which inspires opportunities. This report has set out the importance of holding onto the benefits of greater virtual engagement – particularly in terms of extending the reach of introductory work around sectors and roles – while ensuring a balance in terms of recognising the preference of both employers and young people for face-to-face experiences that are more immersive.

However, there is a further aspect of COVID-19 that is relevant to DYW. Recent research has described the significant and long-lasting impact of COVID-19 on young people's mental health, particularly those in disadvantaged communities (Nuffield Trust, 2022). This makes the quality and coherence of the advice and support they receive around their progress into training and work even more important. DYW has a key role to play in contributing to this focused effort on more disadvantaged young people.

The changing economy and labour market

As a key part of the context for YPG, the recent Career Review, Careers By Design (Skills Development Scotland, 2022) set out the changing context for young people's employment, including:

The climate emergency. The Scottish Government's commitment to a just and fair transition to net zero (Scottish Government Just Transition Commission) is contributing to the creation of a range of new areas of work and changing roles and focus within existing employment. DYW has been part of this change, with some Regional Groups focusing on green jobs and the circular economy as an area of interest for young people.

Industry 4.0 and disruptive technologies. The report recognises the likelihood of 'frequent disruption in the labour market that requires recurring occupational change and a need to significantly and regularly retrain and upskill' (Skills Development Scotland, 2022). The COVID-19 pandemic was an example of how rapid change in technology, industries, processes and societal norms can be transformed. Overnight, businesses adapted to the pandemic by moving to entirely online and remote working, displacing traditional ways of working. This has changed how we work and the skills we need, and software required to do our day-to-day jobs.

A dynamic labour market. Before COVID-19, a labour supply shortage in Scotland encouraged employers to look beyond traditional ways of recruiting, including working with people who may need additional support at work. As the labour market emerges from COVID-19, the labour supply challenges have not improved, and the this research coincided with many employers recognising that they needed to develop new approaches to recruitment to meet their current and future skills requirements. However, with the cost-of-living crisis and the widely predicted recession, it is likely that unemployment will rise in the medium term and young people will be presented with both fewer opportunities and greater pressures on them to earn.

The nature of work. The Career Review recognises that the changing nature of work places an "increased emphasis on career management skills, meta skills and wellbeing, as part of a wider approach to fair work". DYW has a central role to play in helping young people to understand the advantages and risks of non-traditional working models and provide young people with insights into fair work and how to find it. This reinforces the importance of engaging with a wide range of employers and with a particular focus on those who offer fair work.

Put together, these aspects of the dynamism of the labour market reinforce the key conclusion of the Career Review Programme Board, which is that there needs to be a highly collaborative and systematic approach to the task of helping young people to gain the skills, information and confidence to make decisions about and manage their careers. DYW is an important part of this landscape, focusing on drawing employers into this area as a vital partner and ensuring that they are able to play their full role in guiding the curriculum and helping young people to gain a better understanding of, and be better prepared for, the world of work.

Our work has identified the importance of DYW working collaboratively with key partners, particularly local authorities, in helping to identify and fill gaps, respond to issues affecting young people, and creating a more coherent approach to helping young people make progress into the sectors that will be providing appealing and sustainable careers, based around fair work principles.

No One Left Behind

The current evolution of the NOLB approach (Scottish Government, 2020) is an important element in the evolution of DYW. The pooling of the Scottish Government's funding strands around skills and employment, and the devolution of this pooled funding to local authorities, who will work with their LEPs to take forward a locally appropriate and coherent approach to employability, provides two key opportunities for DYW:

• The flexible use of funding locally to ensure that there are coherent pathways for young people into work, and coherent approaches to key sector initiatives. We have heard examples of NOLB funding being drawn on to fill gaps in pathways for more disadvantaged young people on their way to work, and the flexibility of the funding is likely to be an opportunity for DYW, as part of each LEP, to influence the coherence and completeness of these pathways, particularly for young people who are more disadvantaged in the labour market.
• The creation of a more coordinated approach to engaging with employers will provide a range of activities and initiatives around experience of the world of work and intelligence about current and emerging needs. While in the short-term local authorities and their LEPs may have a focus on creating a more holistic and complete service around the needs of individual clients – particularly those further from work – there is scope for the LEPs to also drive a more joined up approach to employer engagement in each local authority area.

What this means for the future focus of DYW

These issues and trends, taken together with our main findings, suggest the following implications for the future evolution of DYW:

• A weakening economy means that employers may find it harder to find the time and resource to support young people, and young people may find it harder to gain work experience and find work.
• The rapid growth of initiatives around some key growth sectors such as digital and those around the green economy and sustainability mean that DYW is likely to have a role to play in helping to ensure that they are coherent and focused for both employers and young people, particularly at a time when some of the more mature sectors, such as retail and hospitality, will remain at risk, with a knock on effect on engagement and job opportunities.
• The ability of local authorities and their LEPs to apply funding more flexibly around specific local needs and relate these to the profile of jobs in the local economy, creates an opportunity for DYW to play an influential role through creating more comprehensive pathways for young people and a more joined up approach to engaging employers.
• The impact on young people's mental health – and specifically the impact on young people in more disadvantaged communities – suggests that the focus that DYW place on more disadvantaged young people over the next two or three years will make an important contribution to their future progress.
• This work suggests that it will be more important than ever for DYW to have a close working relationship with local authorities and to use these relationships to identify current and emerging issues and needs around more disadvantaged young people and put together appropriate responses with employers.

The key conclusion we draw from this is that DYW is a critical part of the information, advice and guidance 'assets' of a region and, in terms of the outcome from the Career Review, it has the ability to play a central role in helping to ensure that these assets work together effectively around the needs and aspirations of young people and the opportunities and insights that employers can offer. In practice this means:

• It will be important for DYW to play an exemplar role as a partner and collaborator in putting into practice the key theme of the Career Review.
• DYW Regional Groups can provide strong leadership in drawing together a coherent and joined up set of initiatives around recruitment and skills development for young people in locally significant sectors.
• DYW is in a position to draw together intelligence from employers about current and emerging local recruitment and skills needs and combine this with SDS research to use in informing its joint action with local authorities around areas of job opportunity.
• DYW has a central role to play in drawing in a range of employer membership groups and networks to promote engagement and its value and broadening the ownership of the agenda of helping young people make a successful and sustained transition into work.