Youth Employment Scotland Fund (YESF): evaluation report

6 Employers providing YESF jobs

Introduction

6.1 This chapter sets out the analysis of employers' experiences of providing YESF jobs. Drawing on the results of the survey, employer case studies and findings from the Local Authority and stakeholder consultations, it considers the jobs provided and how employers engaged with the YESF. It goes on to examine the experience of employers and the outcomes of participating in YESF.

Employer respondent profile

6.2 A total of 183 employers responded to the YESF survey, either by telephone or online. 78% of these were private businesses, 16% were social enterprises or voluntary organisations and the rest described themselves as either public sector or other.

6.3 The highest number of respondents were from Glasgow (13% of the total) and Inverclyde (10%). There were no respondents from nine Local Authority areas. ^[8] The most represented sectors in the survey were construction (15%), food and drink (10%) and manufacturing (9%). Respondents were most likely to be micro and small SMEs (90%). Medium size employers accounted for 8% and a small number were large enterprises (around 2%).

YESF jobs provided

6.4 Respondents to the survey provided a total of 353 YESF jobs. Table 6.1 sets out the number provided by type of job and size of employer within this sample. It shows that the majority of jobs were full-time (57%), with MAs constituting almost another third. The average number of jobs provided per employer was 1.93. Micro businesses (0-10 employees) provided 48% of job at an average of 1.68 job per employer, with small enterprises (11-49 employees) providing a further 35%, at an average of 1.89 jobs. Medium-sized enterprises provided a smaller proportion because there are fewer businesses of this size, but at a higher average of 3.53 jobs per employer. Where employers provided multiple YESF jobs, the majority (71%) did so in a phased way rather than starting them all at the same time.

Table 6.1: Total jobs by size of employer based on a sample (n=183)

(n=183) Employer size	Full-time	Part-time	MA	Total Jobs	Average Jobs
0-10 employees	104	27	39	170	1.68
11-49 employees	65	14	40	115	1.89
50-249 employees	24	0	29	53	3.53
250+ employees	3	0	2	5	1.67
Not specified	7	0	3	10	3.33
Total	203 (57%)	41 (12%)	113 (32%)	353	1.93

Additionality of YESF jobs

6.5 This section examines the evidence of additionality, deadweight, displacement and added value of the YESF.

Additionality

6.6 Whilst the YESF was very clearly about additional job creation, some employers participating in the evaluation seemed to view it as a trial period during which they could assess whether they wanted to keep the young person on, even though the young person was given a permanent contract from the outset. This perception may mean that a clearer message was required to be given to employers by Local Authorities.

6.7 Having said that, the research shows that the YESF fund helped to create additional jobs and sustained employment for young people in Scotland (sustainable employment is discussed below). More than one third of YESF job providers who answered this question indicated that the jobs were additional - i.e. they created a new post within the organisation. A further 15% said that the YESF brought recruitment forward (time additionality).

Table 6.2: Impact of YESF on job creation and recruitment

Job creation and recruitment (n=177)	No. of employers	%
It created a new job	60	34%
It brought recruitment forward	26	15%
We had a vacancy to fill	91	51%

6.8 The additionality of jobs is substantiated by views and evidence from stakeholder and Local Authority consultees. There is a strong view that the YESF encouraged employers to employ a young person as the ERI made it less of a financial risk to them, effectively enabling them to "take a chance". This reduced risk led to the creation of a variety of employment opportunities and is seen by many Local Authorities as the real added value of the programme.

6.9 Evidence from the survey suggests that the YESF has enabled businesses to offer jobs and take on young people, when they otherwise wouldn't have. 69% of employers either wouldn't have provided the job or were unsure if they would have or not. This backs up Local Authority opinions that there are now young people in employment that wouldn't be in a job without YESF.

6.10 The additionality was boosted by the existing relationships between Local Authorities and employers and the 'contracting' approach taken by some Local Authorities, where they developed contracts with employers, setting out terms and conditions stipulating that the job must be guaranteed and treated as a permanent job beyond the ERI.

6.11 Feedback from voluntary sector stakeholders indicates that third sector organisations were very unlikely to have been able to take on a new person without the YESF ERI. The survey supports this with only one of the 29 third sector organisations responding to the survey stating that they would have taken on a young person without the YESF.

Deadweight

6.12 Deadweight is the extent to which an intended outcome would have occurred anyway without an intervention. There is some evidence of deadweight from the survey findings and some Local Authorities reported a degree of deadweight ( i.e. employers providing jobs where they would have taken on a young person anyway). In the survey, 31% of employers stated that would have taken on a young person without the YESF ERI but the figure for micro businesses is lower at 28%, though both are relatively low.

Case study EM1:

Engaging with YESF to maximise apprenticeship opportunities

Western Isles | Construction | 10-49 employees

EM1 is a leading construction company based in Stornoway, Western Isles, specialising in roofing and historic building repairs. They have been trading for over 25 years, and undertake a range of public and private works.

Most recently, they have provided jobs through the YESF, but the company has provided others before, through a variety of schemes, all builder apprenticeships. Generally they try and keep the young people on as employees. Some in the past have gone on to do other things - attending college full time, or working elsewhere. Those with them currently are doing well, and are also gaining qualifications part time at college.

Experience of the YESF

The company first got involved a couple of years ago when they initially found out about the YESF. They learned about it through the Council's apprenticeships officer, with whom they have an ongoing relationship. They always try and provide apprenticeships, and take on a batch of apprentices every year. Whilst the YESF-supported jobs that they provide, and the apprenticeships that they provide more generally, give the company extra capacity to take on jobs, they see them more as benefitting the young people, so in that sense taking them on is very much part of a company/corporate social responsibility.

They found the application and claims process fine, and not much different from what they were used in taking on apprentices through other schemes or channels. The YESF jobs have just helped with numbers, and they have been able to help more apprentices, and get more doing their CITB qualifications.

Benefits and impacts

The young people taken on they found to be brilliant. Some are still undertaking their apprenticeship now. At the moment, they are all staying on, and they fit in well to the company. They didn't bring any particular skills as they were just out of school, but they do bring enthusiasm and ability, and they have allowed the company to take on more work that they otherwise wouldn't have had the capacity for.

Taking on the young people through the YESF has also allowed the company to take on a couple of slightly older Modern Apprentices, too. The additional funding has freed up other resource within the company to take them on, countering any potential displacement effect.

Challenges

The company sees providing jobs to young people a worthwhile activity in general, and it is something they always try to do. In that sense, providing jobs through YESF is no different. They haven't faced any challenges as such, only in being a little constrained in how many they could take on; but this is a reflection of company resource rather than YESF.

Future outlook

They will always look to offer apprenticeships. YESF has really helped them to do this, and the company consider it a shame that it is finishing. They hadn't really heard about the Scotland Employer Recruitment Incentive ( SERI), but are keen to know more, and would consider providing a job through it.

Displacement

6.13 Displacement is the extent to which benefits for intervention beneficiaries are offset by a reduction in activity/benefits for non-beneficiaries. Over half of respondent employers reported that they had an existing vacancy to fill and took on a young person for the role. Whilst this can be considered deadweight (they may have taken on a young person for the role without the ERI), a proportion of this will actually be displacement, since the YESF ERI meant that they perhaps took on a young person in place of another worker. However, this is again likely to be a relatively low rate.

6.14 More than three quarters of respondents (75%) stated that taking on young people did not displace other potential employees. This may have been influenced by the targeting of YESF jobs. For example in Dundee, YESF delivery was specifically targeted at entry level positions, the expectation being that older unemployed people would be looking for posts that required more experience rather than entry level jobs.

6.15 In the survey, 21% of employers said that the YESF meant that they took on a young person in place of recruiting a different employee, so displacing them. Local Authorities also observed that as a result of the YESF, some employers recruited a young person at entry level, whilst their original intention had been to recruit someone with experience which represents a degree of displacement. In West Dunbartonshire, when the YESF was introduced, the number of people securing employment through the Local Authority's 30+ grant scheme dropped and the council believes that this was because the YESF encouraged employers to take on young people rather than people aged 30 and over.

6.16 Some Local Authorities changed other employability support programmes as a result of the YESF in a bid to address the potential for displacement. When the YESF criteria were broadened to include those aged 25-29, Dumfries and Galloway Council altered its local 25+ employability scheme by changing the age range to start at people aged 30, rather than 25.

Additional training

6.17 The findings show that the YESF ERI enabled employers to provide support to the young person that they would not have been able to provide without it. Almost a third (30%) of employers in the survey indicated that they were able to provide training to the young person that otherwise would not have been possible. This is a very positive outcome and one that could be built on in future ERI programmes.

Engaging with the YESF

6.18 The main source of information and employer referral to the YESF was through the Local Authority with 41% of respondents hearing about it either directly from the Local Authority (22% of respondents), or through the Local Authority website (19%).

6.19 Over one quarter of employer respondents (27%) were referred to the YESF by other organisations such as SCVO and training providers. As one social enterprise stated:

"We first heard of the YESF through the Community Jobs Scotland Programme, which we already had some job placements through. We were directed towards the Local Authorities, and we got in touch with two Councils regarding jobs for young people."

6.20 A further 24% of employers in the survey found out about the YESF through word of mouth and Local Authorities also reported that peer recruitment/word of mouth was an important source of referrals. For example, the three Ayrshire councils stated that 'industrial estate word of mouth' was very useful in attracting employers to the YESF and in Dumfries and Galloway it is estimated that more than half of referrals came through word of mouth.

Case study EM2:

De-risking recruitment and lowering the cost

Clackmannanshire | Construction merchant/retailer | 100-249 employees

EM2 is a building supplies company based in Clackmannanshire, with stores across eastern Central Scotland. It has been trading for almost 50 years, and recently opened a specialist roofing division. The company provided two YESF-funded jobs, and have previously engaged in various youth employment funds. One young person was offered a permanent position.

Experience of the YESF

The company heard about the YESF from the training provider that they had used for around three or four years previously, who facilitate SVQ training. They approached the training provider to source new employees for their new e-commerce business venture. The company have engaged with a number of similar funds over the years in various parts of the business and provided various employment opportunities for young people. They have done so as they see important to continue training young people so they become long-term members of the team, as in the construction industry there is a limited supply of experienced workers. Providing jobs and full-time positions to young people is a cost-effective method of achieving continuity.

The main motivation for getting involved the YESF was the launch of a new e-commerce business venture. They believed that having young, enthusiastic employees would bring the right skills and experience to this venture, for example knowledge of social media outlets, which older employees may not have. As the venture was new, it was important to keep costs to a minimum and the YESF provided financial support to do this. This influenced the company's decision about who they were going to take on as it substantially reduced the cost. The YESF funding allowed the company to provide SVQ Level 2 and parts of level 3 training to the two young people that the company took on. The company also provided additional training through their own resources.

Benefits and Impacts

The recruited young people made a positive impact within the company. They undertook general e-commerce assistant positions - dealing with orders, supplier administration, order fulfilment and web/social media publishing, etc. The company feel that they brought a youthful perspective and fresh outlook to the new venture.

After the ERI subsidy came to an end, one of the young people were offered a permanent position, has progressed into the main sales team and are hoping to continue through the company's management training scheme. The other young person was offered a permanent position but then let go due to continued poor performance. They are now working for a competitor.

Challenges

The company did not face any particular challenges when providing the jobs, they just believe that the young people required the correct training. The young person who was offered a permanent position had a great attitude and skills learning ability but a learning environment such as school and college was not appropriate for them.

Future outlook

Their YESF experience was positive, and the company will continue to offer jobs for young people. They have recently tried to provide a new e-commerce scheme for young people; however they could not recruit suitable candidates in the timescale. They have since developed an internal training regime for young people which aims to guide and allow them to develop from apprenticeship to management and director levels.

6.21 Clarity of communication and information is critical in recruiting participants to a programme and overwhelmingly, employers (97%) found the YESF information provided by Local Authorities to be helpful and within that, 60% found it very helpful.

Motivations to engage

6.22 A sense of social and community responsibility was an important driver in motivating employers to engage with the YESF. Fifty-nine percent of survey respondents were motivated to provide YESF jobs because they wanted to help local young people in their area to find employment.

6.23 Gaining additional workforce capacity was also a key factor with 31% of employers in the survey indicating that the YESF helped them to increase their capacity at a busy time (10 of these were third sector and voluntary organisations). Almost half of employers (48%) reported that they were going to recruit anyway, and the ERI influenced the decision to take on a young person to fill the post. As one employer stated:

"The main motivation for getting involved with Youth Employment Scotland Fund was the launch of a new ecommerce business venture. [We thought] that having young enthusiastic employees would bring the right skills and experience to this venture, for example, knowledge of social media outlets which older employees may not have… as the venture was new, it was important to keep costs to a minimum and the YES Fund [sic] would provide the financial support to do this."

6.24 In one area, the Local Authority found that a small number of employers used the YESF to increase capacity with no intention of retaining the young person at the end of the ERI. Having terminated the contract with the YESF young person, these employers then looked to recruit another young person through the YESF. The council introduced contracting processes to stop employers doing this.

Employing young people

Experience during the YESF job

6.25 Employers reported a generally positive experience of employing young people through the YESF. Eighty-three percent of employers found that the young people they employed were willing to learn, with 77% also reporting that they were enthusiastic. Sixty-six percent of employers stated that the young person worked well as part of a team, and 61% considered that the young person had a good level of ability. In total, almost 40% of employers reported that young people in the YESF jobs had all the qualities as illustrated in Table 6.3.

Table 6.3: Skills and abilities of the young people

Skills and abilities n=(173)	No. of employers	%of employers
Enthusiastic	134	77.5%
Good level of ability	105	60.7%
Willing to learn	144	83.2%
Works well as part of a team	115	66.5%
Good at time-keeping	112	64.7%
Very committed to the job	96	55.5%
All skills and abilities	69	39.9%

Case study EM3:

Social enterprise development and capacity-building

Glasgow | Community Interest Company/Social Enterprise | 10-49 employees

Business overview

EM3 are a social enterprise/community interest company that was set up in 2011. It promotes local food growing and cookery, and operate a shop and community hub in the South of Glasgow, having recently moved from their original premises. The company structure consists of four directors and a number of food growers, drivers, cooks, and shop staff. They also deliver a number of sustainable food projects.

The company provided three jobs in total; these followed a number of placements provided through the Community Jobs Scotland ( CJS) initiative.

Experience of the YESF

EM3 first heard of the YESF as a result of their involvement in the Community Jobs Scotland ( CJS) Programme. They got in touch with officers from two different councils, Glasgow City Council and East Renfrewshire Council, who then co-ordinated the provision of their jobs.

They are growing pretty quickly as an organisation, and needed to increase their capacity and meet demand. The YESF money helped them to take on staff to fulfil roles that initially would not have been covering costs. It also helped them ease off CJS funding and test the water for full employment for some posts. It also helped the young people to develop, and the positions to become financially viable.

The organisation found the application and claims process manageable, though not necessarily easy. Compliance was a little awkward, but the only thing that they found difficult was the payment in arrears. For a social enterprise of their size, cash flow is always a challenge, so they felt that at least some payment up front really would have beneficial.

Benefits and Impacts

The young people they took on through the YESF have fit into the organisation well. They progressed from the CJS Programme on to YESF-supported jobs, and have done very well. Two of the three that EM3 took on are still with them, and have permanent roles.

As well as developing individually, they think that the young people have contributed to the development of the company. It has also given them a degree of continuity and stability in delivering their sustainable food projects, as well as their teaching activity (they also teach a range of food and cooking skills to local people).

Challenges

There were no challenges in providing jobs through the YESF as such, they just needed to make sure that following the end of the YESF subsidy, the new permanent posts created were meeting costs and contributing to the business.

Future outlook

The company have had a positive experience through the YESF, and given plans to continue developing and meet the needs and demands of their service users, they would absolutely do the same again.

Sustained employment

6.26 Overall there is a positive level of job sustainment amongst respondent employers, although this might, to some extent, reflect the fact that employers who retained the young person may be more likely to participate in the evaluation. Seventy-two percent of employers in the survey indicated that they retained the young person once the ERI had finished which fairly closely reflects Local Authorities' estimates of a likely rate of sustained employment (by the end of the final phase) in the region of 60-75%. One Local Authority commented that:

"It isn't just a case of employers acting for the cash, as it is limited; the young people are proving to be assets, and the risks taken are paying off."

6.27 Table 6.4 shows that the key reasons given by employers for retaining young people were that the young person had a positive work attitude (66% of employers), and 63% said they kept the on because they had proved to be hard working. Sixty percent of employers said that they kept the young person on as they demonstrated good team-working and 57% reported that the young person was kept on as they had contributed to the business, whilst almost half said that the young person had the required skills. However, survey results indicate that the job sustainment rate for voluntary organisations and social enterprises was lower, at 65%.

6.28 Very positively, 28% (37) of employers in the survey who had kept a young person on indicated that they had created a job for the young person because of the skills and abilities they had demonstrated. This is a clear signal that the YESF has led to new job creation for young people.

Table 6.4: Reasons for retaining young people

Reasons for retaining young person n=(131)	No. of employers	% of employers
We had a permanent position to fill	70	53.4%
We created a job for them	37	28.2%
They have the skills we need	65	49.6%
They are hard working	82	62.6%
They have a positive work attitude	86	65.6%
They have contributed to the business	74	56.5%
They are good team workers	79	60.3%
Other	8	6.1%
All reasons for retaining	3	2.3%

6.29 Where a young person was not maintained in employment following the end of the ERI (27 employers reported this), nine of these employers indicated that it was because the young person had not demonstrated the right attitude to work. However, 72% of this 27 (23) stated that they were still able to recommend the young person to another employer. Young people from 24 of these 27 employers who were not offered a post were able to get a job with another employer.

Outcomes for employers

6.30 The study evidence shows that the YESF delivered a range of positive outcomes for employers as illustrated in Table 6.5. Fifty-nine percent of employers agreed that they were able to give a new employee a trial before offering them a permanent job, whilst 41% stated that the funding diminished the risk of taking on a young person.

Case study EM4:

Young people not performing in their role

Dundee | Property Management | 1-10 employees

EM4 is a residential lettings agency and property management company based in Dundee. They offer a full range of letting and property management services, including accommodation search for professionals relocating to the Dundee area.

Through the YESF, the company provided one job. The young person taken on did not complete their six months in post; they were let go after five and a half months.

Experience of the YESF

The company were looking to employ a trainee business administrator full time, without previous experience, as they thought it would be easier to train someone from scratch. This informed the decision to look for a young person. They contacted Discover Opportunities in Dundee who shortlisted four people for interview. She did not have a relationship with Discover Opportunities in Dundee prior to this.

They had not employed a young person before participating in the YESF, but had wanted to employ someone. The company had found it difficult to join similar schemes in the past due to processes being very complicated, and the YESF was no different. Though no additional income for training was available, the financial incentive of the Fund persuaded them to recruit a young person.

Challenges and Impacts

The young person that they took on had a variety of office-based administrative tasks - data input, diary management, dealing with client requests, etc. - and was initially very good, displaying a good attitude towards undertaking work. However, after a number of weeks, their attitude changed and they brought personal problems into the workplace and demanded a lot of attention. The young person also lacked commercial awareness for data protection which also caused the employer issues.

The employer had to let the young person go after five and a half months. The employer's attitude is the same after this experience as it was before hiring the young person. They do believe that young people are generally not prepared for the working world in the way that they should be, mainly because of the nature of the education they receive.

Future outlook

They would use a similar scheme in future as they have seen some positive experiences in the YESF. They do believe it is useful for small employers but believe that the young people should be enrolled on a course before the job begins to prepare them for working life.

The biggest benefit from the YESF is the financial incentive which is provided, particularly for small businesses. It also saves time for the business in terms of having to engage in a lengthy recruitment process. They still however feel that young people are not ready to enter the workplace.

Table 6.5: Benefits to employers

Benefits n=(173)	No of employers	% of employers
We got to try a new employee before offering them a permanent job	102	59.0%
The ERI reduced the risk of taking on a young person	70	40.5%
We employed the young person at the end of the ERI and gained and retained a valuable member of staff	102	59.0%
The young person brought new skills to the business	26	15.0%
The funding meant we could take on an extra person for 6 months to increase capacity	84	48.6%
Taking on a young person helped to grow the business	80	46.2%
We have developed good links with the Local Authority	64	37.0%
We are now more likely to recruit young people	83	48.0%
Other	8	4.6%

6.31 Fifty-nine percent of employers stated that they retained the young person at the end of the ERI and gained a valuable member of staff. Forty-eight percent agree that having provided a YESF job, they are now more likely to recruit young people in the future. This is a very positive outcome for young people and also for employers as it has widened the pool they are likely to recruit from. They believe that employing young people changes the profile of the workforce and brings in fresh ideas, new outlooks, and different skills and abilities. This "new blood" has proved to be a positive for many businesses and has freshened and diversified the workforce as many employers had not recruited due to the recession so had an ageing workforce. Demonstrating both the value of the young person and the impact of new ideas, one engineering company stated:

"The majority of young people taken on have flourished, and have progressed quickly. They have brought exuberance and good ideas to the company, and in one case in particular, they have proved themselves to be a huge asset."

6.32 YESF jobs enabled almost half (46%) of the employers in the survey to grow. Local Authorities reported that the YESF was particularly useful to micro and small businesses as it helped them to boost capacity and grow, although this business development was not the principal aim of the YESF. Of the employers that were able to grow, 63% were micro businesses (a greater proportion than micro businesses in the survey sample - 55%). As one construction company said:

" YESF enabled us to increase capacity and deliver more work...we take on apprentices anyway, but this has enabled us to take on more, and also take on more jobs and a bigger workload."

6.33 In many cases the YESF has provided the resource to allow the creation of additional posts that otherwise would not have existed. Employers have been given the opportunity to change business structures or staffing arrangements within their business, take on additional young people and meet changing business needs.

6.34 Social enterprises and voluntary organisations were able to increase capacity through the YESF. Nearly two thirds of the 29 social enterprises and voluntary organisations in total that responded reported that they were able to increase capacity, whilst almost half were able to grow the business. This increased capacity in social enterprises can be particularly important during a period of budget cuts where ability to deliver may decline and at the same time, demand for services increase. Stakeholders stated that Community Jobs Scotland ( CJS) helped third sector organisations sustain or increase capacity and following through, the YESF sustained this boosted capacity and enabled needs to be met more fully.

Case study EM5:

Benefits of employing young people

Falkirk | Manufacturing/engineering | 100-249 employees

EM5 is part of an international group of companies that specialise in the manufacture and supply of steel/alloy piping products, serving the oil, gas, shipbuilding and energy markets. Originally established over 35 years ago, they have c.50 employees on site, and operate at other locations in the UK.

Having taken on a number of young people through the YESF in addition to the trainees they take on more generally, those that have flourished have been kept on, and have progressed quite quickly within the company. Some others have not, but that is down to work attitude.

Experience of the YESF

They heard about the business through Falkirk Council, who they have regular contact with for sourcing trainees for the business. The company is always looking to take young people on, and then promote internally. They provide a thorough training programme, and give young people and new recruits the opportunity to grow within the business.

They used YESF as another means to get access to trainees, but with the intention to fill vacancies and give young people a permanent post, guaranteed beyond the end of the YESF ERI. As a relatively large company, they often need to recruit new young people.

The company did receive some assistance from the Council, but didn't have any real issues with the application and claims process.

Benefits and impacts

The majority of the young people that the company has taken on through YESF have fitted in fine. Some don't, and this is almost entirely down to attitude - some young people have difficulty adjusting to a work environment, and given the engineering and sometimes heavy industrial processes involved in their business, young people sometimes lack understanding of health and safety, and responsibility in the work place.

However, this is the same for trainees in general, and most flourish within the company. These young people bring an exuberance and energy, and actually bring a lot of good ideas into the company. Those with the right attitude really do well. One young person in particular has gained a lot of skills, and has achieved a lot in the short space of time that they been in employment. They have also made a range of identifiable cost savings, and are considered a huge asset to the company. Another has made a valuable contribution to the work of the finance team since starting their job.

Challenges

The challenges that the company faced in providing YESF-supported jobs are the ones they face in giving jobs to trainees generally. They think that very often young people are not prepared for work life, and the responsibility and discipline that is required, especially in a manufacturing and engineering company.

Future outlook

Their YESF experience hasn't really changed their approach to trainees or employing young people, it is something that they will always do.

6.35 One social enterprise in the study reported that the YESF had helped them employ staff in roles that weren't initially financially viable, but gave the organisation and staff development time to reach the point where the roles were making a contribution to revenue generation:

"The YESF helped us financially, in that it gave us the opportunity to take on staff to do jobs that weren't covering costs initially, but it gave the young people the space to grow into the job, which they have done, and have become financially worthwhile."

6.36 The YESF also enabled employers to provide MAs where they wouldn't otherwise have been able to do so, benefiting the employer and widening opportunities for young people. This has been particularly evident amongst micro and small businesses that wouldn't necessarily have had the resources to offer MAs without participating in the YESF.

Barriers and challenges

Recruiting and employing young people

6.37 Whilst employers were generally satisfied with the young people taking up the jobs, 70% reported that it was not easy to find the right young person to fulfil the role. Fifty-five percent of those who reported difficulty said that the young person didn't perform as well as they hoped, whilst 45% indicated that they needed more training and support than anticipated.

6.38 Recognising these issues, Local Authorities sought to manage employer expectations on the experience and abilities of young people pre-employment and in a number of areas, some young people had received employability support before they started their YESF job.

Process and administrative challenges

Localised delivery

6.39 Whilst the YESF was a national programme, it had the flexibility to allow Local Authorities to deliver it in different ways to fit with local circumstance and existing initiatives. Whilst this was seen as a strength, it presented some challenges particularly for employers who provided YESF jobs in more than one Local Authority area. They reported that it caused confusion and difficulty, with employers having to deal with different processes and systems and inconsistency in the terms, conditions and wraparound employability support.

Administration and compliance

6.40 The administrative aspect of the YESF caused some difficulties with Local Authorities and stakeholders commenting that the compliance and claims process was over-onerous and complex. Employers also noted some difficulty with the claims process, but not to the same degree.

6.41 Seventy-four per cent of respondent employers said that they had claimed the funding for all jobs that they provided, with a further 16% reporting that they had not come to the end of the ERI period and so were yet to claim. The remaining 10% have not claimed.

6.42 Of those who had claimed the funding due, only 13% reported any degree of difficulty with the claims process (rating either '1' or '2' on a scale of difficulty from 1 (very difficult) to 5 (very easy). Almost three quarters (73%) saw the process as easy (Scoring '4' or '5'). This may be explained by the substantial support from Local Authorities received by employers to help them prepare and submit their claims, thus mitigating any difficulty or complexity.

6.43 The compliance issues were mostly due to the complexity of paperwork and the evidence required. The requirement for providing payslips for every young person employed through YESF (with eligible wages/salaries identified as distinct from extra hours, payment over the eligible hourly rate, or holiday/sickness pay), as well as the employer's bank statements detailing individual payments was time consuming and difficult. The extent to which employers found this difficult often depended on how they paid the wage to the individual for example, by cash, through BACS etc. In some, staff payroll runs were grouped all salary costs together as one payment, so it was hard for employers to demonstrate a payment to the specific YESF young person on their bank statement.

6.44 There is a perception that YESF is most suitable for employers with PAYE systems and who are therefore able to provide evidence more easily. The compliance burden was particularly difficult for small and micro businesses, but also for those who outsource their payroll. Some employers incurred a cost because their payroll provider charged them for copies of pay slips. Delays in payments as a result of satisfying compliance requirements also impacted on cash flow for some businesses, and had a particularly negative impact on small and micro employers who made up the majority of YESF employers.

Non-claimants

6.45 In the survey, 10% of the employers had not claimed the ERI and for some, the barrier to claiming was the compliance process. The corresponding rate reported in Local Authority monitoring data is 14% though the rate in some areas is as high as 25%. Of the 21 employers who gave a reason for not claiming, four said it was because of a lack of guidance whilst seven said they had not got around to it yet. A variety of other reasons were also offered for not claiming, including one employer who noted that continual procedural changes between phases, the delays to applications meant that they could not wait any longer - and so missed out on being able to claim the ERI. It is worth noting that 10% of survey respondents stated that the young person is a valuable team member so they were less inclined to claim.

Wider support needs of employers

6.46 It is clear from the survey results that the YESF ERI only went so far in meeting employers' needs with 62% of surveyed employers reporting that ERI did not meet enough of the employment costs. Perhaps unsurprisingly, 61% reported that a greater amount of funding would be more effective in encouraging them to provide a job to a young person. Fifty-nine percent reported that access to additional funding to provide training to the young person would be a benefit and encourage them to provide jobs.

6.47 One third think that aligning the funding to external training provision, e.g. at FE college, would also be beneficial. A number of employers identified a need for additional support to employ vulnerable groups, and young people with disabilities. This is echoed by stakeholders and Local Authorities, who suggest that supported training to align with the YESF and funding to provide equipment or training would be helpful. This alignment took place in many LA areas where YESF was aligned with Employability Fund and local provision. The finding suggests that some employers did not know that there was alignment and also that some LAs provided wrap around support and others not, reflecting local flexibility.

6.48 Many of the employers participating in YESF were micro businesses and may have limited experience of employing staff and in particular young people. Sixteen percent of employers responding to the survey indicated that they lacked supervisory experience which made it difficult for them to properly support the young person in the job.

Summary

6.49 Providing YESF jobs to young people has brought a number of benefits to employers including additional jobs, increased capacity, a refreshed workforce and for many employers, valuable members of staff. It is clear that, from the impacts reported by businesses, coupled with evidence and anecdotal accounts from Local Authorities and stakeholders, small and micro businesses, as well as third sector organisations, seem to have benefitted greatly from the YESF.

6.50 Interventions such as the YESF therefore need to be targeted to ensure maximum impact. This seems to be particularly the case for those small businesses who wish/need to take on young people for additional capacity, but do not have the capability to recruit or set up processes for dealing with additional new employees.

6.51 ERI funding such as the YESF is perceived by employers to be an effective means of providing jobs (96% agree). The overwhelming majority of employers surveyed said that they would employ a young person again in future if funding was available (98%), and that they would recommend ERI funded jobs to other businesses (97%).

6.52 The compliance process for YESF is considered to be overly onerous, and for some employers has acted as a barrier to claiming. For many employers, this issue was overcome through a significant effort on the part of Local Authorities to provide support to employers to meet compliance requirements and process claims. Nevertheless this has resulted in additional costs, delayed payments or non-claiming, with some employers choosing not to engage with the Programme.