Employers’ views on young people with a history of unemployment
Some young people have a hard time finding employment or staying employed. Some people would say this is due to the young people themselves: they do not persist, they do not look hard enough for employment, they are not motivated enough. But is this really what is happening? Maybe it also has something to do with the way in which recruitment processes are organised and with the views of employers. Perhaps if you have been unemployed for a while it makes it more difficult to get back to work, because employers suspect there must be a good reason for your unemployment and they’d rather not take the risk of hiring an unreliable employee (employment discrimination)? Is it all a vicious circle?
Five bachelor students in International Business Management at Artevelde University of Applied Sciences combined desk research with interviews to investigate how companies perceive young people with a history of unemployment.
From their desk research, it appears that indeed some employers tend to discriminate people with a history of unemployment because they want to avoid extra costs (training, coaching, risking the employee leaving again) even while in several countries, companies get certain (tax) benefits or allowances when hiring NEET (not in education, employment or training) young people. In addition, the literature shows that one of the reasons young people struggle to find and keep employment can be found in … education, or, perhaps better put, the mismatch between education and employment. For instance, research by McKinsey in 2012 showed that “employers, education providers, and youth live in parallel universes. They very much have a different way of looking at the situation which leads to this mismatch. Only about 42 per cent of the employers think that new graduates are prepared for the job market while the education providers believe that 72 per cent of them are ready.” (Mourshed et al., 2012).
The students also reported on the number of NEET young people in each of the four countries involved in SPEED-You-UP. There are marked differences between the countries, with the Netherlands having the ‘best numbers’ (3-5% of NEET young people). Perhaps this has something to do with the way they tackle youth unemployment? The Netherlands have invested in a decentralized policy combined with extensive monitoring. The monitoring helps to intervene at an early stage and prevents that young people disappear from the system. Building local networks of schools, welfare organisations and employment actors helps to adequately support young people.
Next to the desk research, the students interviewed 15 companies across the four countries. Interviewees were part of the HR service and/or had insight in the company’s policy regarding training and recruitment. We list the six main conclusions from these interviews here below.
1. Yes, it may cost a bit extra to invest in hiring NEET young people. There are costs for training and there might be less productivity at the start, but the benefits outweigh the costs when people stay in your company. Also, the lower productivity is often compensated by a lower wage.
2. Companies will hire any person who can become a loyal employee and add value to the company. Companies know that NEET young people are often seen as lazy, having a low feeling of responsibility and not contributing to society, but also realise that many of these young people actually want to be part of the system but don’t know where to start. The companies that were interviewed mostly hire based on competencies and potential, not based on emotion. The fact that hiring NEET young people makes the company contribute to society is not the main goal but a (welcome) side effect. In addition, several interviewees state that if you invest in people, they will return that investment.
“Providing the opportunity for people creates a sort of commitment and motivation for them to prove themselves. Often these NEETs will take that extra little step for the company because they gave him/her a chance to grow in life. These people are grateful and will not forget it.” (Interview with a company founder, 2020)
“We want to hire even more NEETs. It is very challenging, but it is worth it to keep investing in them.” (Interview with a Learning and Development Coordinator, 2020)
3. The challenges in hiring NEET young people are common to all companies. Often, young people aim too high and end up disappointed with the job they get. They want to have a nice, high-end job, which is often out of their reach due to a lack of degree or experience. As a result, their motivation drops.
“The lack of motivation has been the most occurring obstacle that we have faced with employing NEETs, but we definitely think that the benefits outweigh the costs as long as the person can add value to the company.” (from an interview with a company supervisor, 2020)
“Some people of the younger generation would rather run before they can walk but that is not possible.” (from an interview with a Human Resources Manager, 2020)
4. Not all companies are aware of the existing (financial) incentives in hiring young people with a history of unemployment. Getting these incentives is not the main motivation for companies to hire NEET young people anyway, but companies also see the process to get these incentives as complex. It is a hassle to find the right information and it takes long to get through the whole process of asking funding. However, most companies are positive about the fact that there are incentives.
“If the unemployed person wants to stay employed, he or she will find the motivation to do so. The government can stimulate that motivation by making changes to the unemployment benefits and its rules.” (from an interview with a Senior Employee, 2020)
5. Would companies continue to hire young people in a NEET situation, even without benefits or government funding? Most companies say they would, although their reasons vary. Some indicate they first of all want good motivated employees, and it does not matter if someone started from a NEET situation. Others say that they just cannot find enough good employees, and that they do not distinguish between who is in a NEET or not in a NEET situation. The only thing they are interested in, is gaining a motivated hard-working employee that contributes to the grow of the company. Still other companies mention the ethical aspect: they invest in people and give them a chance to make changes to their situation, help them out of unemployment.
“They are the future generation, not investing in them would only cause unemployment to get worse” (from an interview with a Human Resources Manager, 2020)
6. At last, some of the interviews refer to the mismatch between education and employment. They indicate that schools should get more resources to tackle the problem of early school leaving and that young people should get a realistic view on employment from an early age. Some interviewees suggest that schools should be part of local networks that collaborate with welfare organisations and employers so young people at risk of dropping out could immediately start an apprenticeship instead of disappearing off the radar.
“The education system is outdated and some people do not fit into it thus they become a NEET” (from an interview with a Communications Employee, 2020)
In conclusion, companies look for motivated and dedicated employees. For most companies, it does not matter whether or not an employee has a history of unemployment. Most employers recognize the mismatch between education and employment and feel that the government is not doing enough to support young people in NEET situations. For them, the most important thing is that young people get a realistic idea of employment and of the type of jobs that is available to them (with and without experience, degree). They are willing to invest in people and feel that there is generally a large return on investment.