The clans united yesterday in the name of increasing the number of apprenticeships in Central London. Lord and Lady Flight kindly hosted a diverse group of individuals and organisations (list below) committed to improving youth employment prospects in Westminster and beyond. We were fortunate enough to have John Hayes, the Minister of State for Further Education, Skills and Simon Waugh, the Chief Executive of National Apprenticeship Service to hear us out.

I was introduced to Lady Flight, a Westminster Councillor, a couple of months ago. Through her involvement with the Sir Simon Milton Foundation she has been championing both the wellbeing of older people – through a day in the national calendar, Silver Sunday, to celebrate them – and the empowerment of young people through increased employment prospects largely via apprenticeships. Most of Lady Flight’s team are VOLUNTEERS:

“Volunteers do not have any contract of employment or contract to perform work or provide services. They are not workers and therefore are not covered by the National Minimum Wage Act 1998. This means they do not qualify for the national minimum wage (NMW)” http://tinyurl.com/BizLinkNMW

Volunteering is both necessary and commendable but as I have consistently argued in former blogs (here, here, here, here, here, here, and here), even if it was ever justified for ‘interns’, in an economy where youth unemployment is at record highs (22% in the UK – even WITH the 457,200 new apprentices) and companies are using internships as a vehicle to test out potential employees (who are increasingly saddled with debt), graduates cannot be expected to be unpaid volunteers. Today we seemed to agree that social mobility is highly desirable but unpaid internships discriminate against people who simply can’t afford to work for free. For me, this is more of a moral issue. I wouldn’t feel comfortable not paying my interns (why should they earn any less than my cleaner?) and I don’t think they’d work as hard if I didn’t. And if we have to take it this far, ‘Internships’ might not have a legal status (www.tinyurl.com/DirectGovDef) but unpaid internships are illegal! (www.tinyurl.com/BizLinkNMW)

To make any significant impact on youth unemployment we need to define our terms. Only in doing so will the 33,000 companies in Westminster be able to better engage the 3,200 NEETs. The same is true nationwide. Companies need clear and concise guidelines as to their options and obligations when taking on young people. These should be defined by who they are for, how long the engagements last, who derives the value and so how much needs to be paid. We suggest that the following definitions are adhered to:

1. WORK EXPERIENCE: Short placements (generally 1-2 weeks), usually for younger people (16-18), to get a ‘taste’ of the working world but not involving manual labour. They do not need to be paid (because the young people derive the lion’s share of the value) though companies should be encouraged to pay expenses.
2. INTERNSHIPS: 1-3 month placements, largely for undergraduates and increasingly graduates, which should be paid for legal AND moral reasons given that the company derives financial value which should be shared. (Some argue that internships should be abolished all together but their flexibility makes them useful for both employers and young people and if paid they are valid employment vehicles).
3. APPRENTICESHIPS: 1-4 year employment and training schemes for those over the age of 16 who choose not to continue their studies either at school or university. The host company derives approximately half the value of interns (as half the time is training) so the NMW is approximately half (£2.60). Employers should be encouraged to pay more and often do. Where possible travel should be subsidised to help apprentices (those in Full Time Education have their bus travel subsidised but not those in apprentices?)

If guidelines like these are subscribed to and brokered by all, then I believe companies will become increasingly more inclined to open their doors to young people. I am not in favour of further regulation just encouragement, education and incentives from government. We are not in the business of naming and shaming those that don’t pay interns (others are), rather we are in favour of persuading companies that it is the right thing to do. If Europe is prepared to invest EUR 22Bn into young people and the DWP (Department for Work & Pensions) Work Programme is picking up some of the funding from the disbanded Future Jobs Fund, at the very least why can’t the government invest in a marketing programme that will educate the masses? Mishaps like the Poundland scandal could be avoided if genuine work experience was defined, understood and undertaken (work experience should be subsidised by the JSA, manual labour should not). As well as focusing on apprenticeships, the government can’t afford to ignore the plight of graduates who are either in unpaid internships or unemployed. According to HESA 28% of graduates who left UK Universities in 2006 were still unemployed 3 years later and perhaps 38% of graduates today are on the dole. So to address youth unemployment in Westminster or anywhere else, internships and graduate jobs need to be fostered as much as apprenticeships.

We will leave it to those better placed to document the proactive discussion yesterday on apprenticeships per se. We understand that in countries like Switzerland only 16% of young people go to university. We understand that the earning power of those remaining in apprenticeship schemes could exceed those going to university. That this country once encouraged 50% of young people to go to university however requires that now it also needs to help them find employment – paid employment. We understand that there is a deficit reduction strategy and acknowledge that the UK is blessed with low interest rates and a strong credit rating but with Gross Domestic Product (GDP) falling in the last quarter, we are on the brink of recession when the US (which IS investing in recovery – perhaps too readily) saw its GDP rise 2.8% in the last quarter. The point is that there could be clever ways to invest in helping a potentially lost generation. As yesterday demonstrated, collective discussion can generate ideas, produce partnerships (Big Society or otherwise) and potentially improve the status quo. We are particularly looking forward to the ‘2012 Opportunities’ lunch on 15th March with The Westminster Council & Westminster Kingsway College.

It was discussions like these that generated our partnership with STEP. Their programmes make it more financially efficient for companies to take on graduates (first using paid internships but 50% of these have turned into full time jobs). They have delivered more than 23,000 paid projects since they started in 1986 and for the last 2 years we have been helping deliver them. Recently they have helped us and UPS find 90 young people (largely graduates) to work at the London 2012 Olympic Games and we hope some of these roles will turn permanent or at least give the the skills to acquire jobs elsewhere. We are proud to have been selected to lead this initiative and are talking to other companies about working with us in similar ways. If the government was to revert back to incentivising companies to offer paid internships (as it did when we first started working with STEP) then even more progress could be made. We have suggested that companies (of a certain size) paying VAT should be able to recoup the cost of a paid intern (£3,600 + VAT) for 3 months from it. If the ROI (Return on Investment) of a graduate over 3 years is 500% (as has been suggested), then this would be an investment and from an accounting perspective, it would be funded from future receipts. More companies would then be in a position to chip in and mentor the next generation.

With the right thinking and collaboration, we can get young people back into work. We are looking into launching the Youth Employment Syndicate (YES) for those committed to this. Both interns and apprentices have a role to play in the economy but Dylan was right again, they should ‘do it for pay’.

Robin Kennedy

Our thanks to Lord and Lady Flight for including us in the discussions. Other organisations invited or represented at today’s meeting included: Westminster City Council, The London Apprenticeship Company, New Deal of the Mind/The Creative Society, The London College of Beauty Therapy, Westminster Kingsway College, De Vere Academy, London Early Years Foundation, The Centre for Social Justice, Cardinal Hume Centre, The Department for Work & Pensions, The London Mayor’s Office, The Volunteer Centre at the LSE, VAW

Happy New Year, One and All. 2012 might well be the Chinese Zodiac Year of The Dragon but (despite protests about a new stamp in China) I am told that the dragon is best known for its abilities to “exorcise evil spirits and offer blessings”. So perhaps we will see the back of Jeremy Clarkson (opinion is divided here as to his appeal) and a host of new employment options?

I wanted to take this opportunity to update you all on a few new things that are going on at WEXO Towers and seek your thoughts on some others. I’ll start by saying that at the end of last year, we welcomed Dominique Edmonds to the team. Dominique was brought up in Surrey before attending the Bristol Institute of Modern Music and will be working as my assistant both on WEXO and the other major project I am involved in – the management of Mano de Dios who release their debut album on 23rd January. Previously, Dom worked as an Events Coordinator at Sportsvision and in true WEXO tradition has also held down a number of other roles ranging from working as a snowboard guide to pulling pints! She will be a valuable member of a team which is set to grow in the next few months. We are hoping to announce the appointment of a Recruitment Director and Business Development Director in the coming weeks and we will likely be taking on a few paid interns once these shoes are comfortably filled…

With that in mind, perhaps the most exciting development last year (as well as hosting Marco Pierre White at one of our WEXO events, visiting No.10 and being asked to work with the Student Film Festival London) was being selected to front the graduate recruitment for Deputy Venue Logistics Managers with UPS at the London 2012 Olympics. Working with STEP, we have helped place 60 candidates but still have another 20-30 positions to fill so do please apply and we can all do our little bit to make 2012 a phenomenal success. There are plenty of other roles on the site which we are continuing to develop as larger opportunities in the recruitment world present themselves. In the meantime, we are helping prepare a paper on the issues surrounding work experience, internships and apprenticeships (together with NDotM / The Creative Society) and would value your feedback. All responses will be considered for a draw for 2 tickets to watch one of the Olympic events.

1. What do you consider to be the key distinctions between internships and apprenticeships?

3. Should the government be doing more to educate the nation about the distinctions between work experience internships and apprenticeships and to encourage or incentivise companies to offer more paid employment for young people?

We look forward to helping make a year of achievement for us all. More importantly though, here’s to a happy and healthy one.

Robin Kennedy, Co-founder and Managing Director

Last week I was invited to attend a breakfast and ‘opinion-former panel event’ at the BIS Conference Centre. It was titled as above – apparently a coincidental duplication of the book of the same name (which I’m now struggling to ‘get in to’) by Ross Perlin – who sadly wasn’t able to attend.

If you’re interested, you can hear the whole event podcast here or read Psychology Magazine’s well written summary of what was discussed here

It was brilliant that Editorial Intelligence brought together many other parties with an interest in answering the question of how we should skill up young people to get jobs.

But I came away feeling disheartened. The panel were certainly accomplished and the talk was well attended but any opportunity to unite opinion and take real action was missed. When given the opportunity, skilling up young people to get jobs will best be achieved by Education and Inspiration on 3 levels. Sadly, the weaknesses of this event lay partly in the title and partly in the make-up of the panel.

1. EDUCATING YOUNG PEOPLE:. Simon Waugh, Executive Chairman of the National Apprenticeship Service is clearly a successful, hard working kind of guy who has probably sacrificed the pecuniary gains of executive level roles in the private sector to try and make a difference and help others in public. So no disrespect to him, but calling an event ‘Intern Nation’ and then including someone on the panel who runs an apprenticeship service only perpetuates the semantic confusion as to what an internship is – and more importantly isn’t. In case you haven’t read my rants before, here is my take on the distinction between work experience, internships and apprenticeships. Without clarification (and education), interns, ‘workies’ and apprentices will never really understand their rights and government will continue to fuel the fire with inconsistent policies:

   * Work experience: Short placements (generally 1-2 weeks) which are usually for younger people (16-18) to get a ‘taste’ of the working world and typically unpaid though we encourage companies to pay expenses.

   * Internships: 1-3 month placements, largely for undergraduates and increasingly graduates, which should be paid for legal AND moral reasons given that the company derives financial value which should be shared.

   * Apprenticeships: Apprenticeships as we see them are long term (1-2 year) paid training programmes which leave you with a vocational qualification usually in a craft or a skill. We believe they should be seen as an equal alternative to higher education. We do not believe that ‘The Apprentice’ on BBC 1 helps the classification quandry. Realistically, we would have called it ‘The Accomplice’ or more appropriately, the ‘The Attention Seeker’.

   * Jobs: What all the above should eventually result in.

2. COMPANIES NEED TO BE EDUCATED AND INCENTIVISE:. It’s a shame that someone as influential and expressive as Laurie Penny (Journalist, author and activist )seems to see the stick as the only solution to the ill justice of unpaid internships. “Don’t bite the hand that feeds you?” Along with many others, she is overtly focused on naming and shaming companies that might not know any better. It would be a real shame if such companies close their doors to young people all together for fear of falling foul of bureaucracy. As I explained to ‘Jilted Generation’ author, Shiv Malik, afterwards, WEXO would far rather we all focus on the carrot of incentivising companies to offer paid internships (via the STEP schemes, proposals for recouping costs of internships from VAT etc) rather than antagonise companies with the stick and choke the supply pipeline? We might also want to remind them that the average Return on Investment of a Graduate is 500% over 3 years.
3. IMPROVING EDUCATION PER SE:. It’s The education system is this country IS partly to blame for not skilling people up to get jobs. This is as much the case as it was for the chair of the event, Brian Groom of the FT, failing to break up the childish confrontation between Citibank Head of Graduate Recruitment, Gemma Lines (I hope she concedes that the City owes the country a debt of gratitude and should sponsor other internships as well as inflating their own remuneration even at this level) and Laura Penney (in fairness it was driven by the latter). The UK’s education system has got worse and this is successively shown to be the case by numeracy and literacy statistics. Moreover, higher education (especially now that it’s paid for) should give its pupils far better careers education and include vocational experience as part of some degrees.

Strangely, the 2 panel members who were least controversial, focused least on the question in hand. This said, Martin Bright , former journalist and founder of New Deal of the Mind (who we work with on BITC’s Work Inspiration campaign) and Faye Wenman, from theTaylor Bennett Foundation, were both entertaining and informative about the good work that they do in trying to create a more meritocratic and productive society. We applaud their work (and the social enterprise, Talent to Work, that this event was ultimately launching) but look to companies and organisations with the reach and resources that we do not currently have to unite the rest of us in effecting real change.

Robin Kennedy

I was most appreciative to have been invited in to No. 10 today to air WEXO’s views on youth unemployment…

1) What it’s like going to No. 10?
2) What was discussed?
3) What can be acheived?

1. WHAT’S IT LIKE GOING TO NO. 10?

If truth be told, I was a little apprehensive (a fair reminder of how many of you feel, when invited in for interviews). On arrival at Westminster, I manoeuvred my way through a throng of people alongside the Cenotaph and crisply announced that I was ‘here for a meeting at No. 10′. My credentials and bags checked, I strode on down Downing Street half expecting to bump into David (PM’s Question Time and a defence of GDP growth beckoned) or at least Nick Robinson (presumably contemplating whether Obama was born in America) but calm was all around.

Not sure what the protocol was, I rang the bell alongside the door which was instantly opened by an official looking gentleman who asked me to leave my phone in one of the cubby holes (Slot ‘007′ was inauspiciously unoccupied but I plumped for it). I then obligingly took a seat below a long and winding staircase which conjured up visions of an seemingly ‘home-alone’ PM/Hugh Grant dancing down it.

2. WHAT WAS DISCUSSED?

My host, an assertive yet accommodating senior policy adviser with a testing mandate (Education, Welfare and Pensions), shortly emerged and there followed a concise yet considered exchange of views which hinged on ‘supply versus demand’, budgetary pressures and the role of government. Youth unemployment it seems is shortly to be moved up the agenda and it was encouraging that players like ourselves were to be consulted in plotting its demise.

One of the key concerns seemed not to be the apparent difference of opinion between DC and NC on access to work experience (understandably – I believe the two can be aligned: sharp elbows are fine so long as everyone knows where the starting line is); rather it was the current reluctance of companies to back ‘first timers’ in lieu of ‘tried and tested’ recruits. Youth unemployment is hovering around the 1m mark. We reflected on how depressing this was when recent figures suggest that graduates (at least) offer a 500% Return On Investment (ROI) over 3 years – adding over £1Bn of value to the UK economy last year.

On the disclosure that we had previously tried to form an ‘Internships Alliance’, it was inferred that if we wanted to assemble some of the key players in this space, government advisers and representatives from BIS would be happy to invite us in to consider our suggestions. This I see as the ‘Big Society’ in action. I sensed that although the government does not see merit in state intervention, it could see value in working WITH select partners in the public and private sector to INSPIRE and INCENTIVISE (corporate) society at large to effect change (investing in an otherwise ‘lost generation’). It does not want to be seen as a ‘bully pulpit’ but it does perhaps acknowledge that it is best placed to showcase good practice and then ‘spread the word’?

Otherwise, the key issues that we touched on were:

* NETWORKING v NEPOTISM: WEXO doesn’t believe there’s anything wrong with using your network to get a job / work experience (it’s a useful skill for the working world) so long as other people are presented with the means to be considered too (and the opportunity goes to the most suitable candidate based on merit). Our technology encourages this by ranking and matching candidates to opportunities.

* SMEs: Many large companies already offer structured work experience and internship programs, but we believe the government should focus on enthusing / incentivising small and medium-sized businesses to take young people on (we have historically suggested recouping costs from VAT hike?). It is these SMEs that represent the backbone of the British economy (60% of GDP?) and which we (and other potential Internships Alliance lobby members) particularly represent. WEXO offers companies a platform to promote opportunities democratically and low maintenance cost, efficient schemes (via STEP and endorsed by Boris Johnson) to pay interns fairly.

* WORK EXPERIENCE V INTERNSHIPS: There is a clear distinction between ‘work experience’ and ‘internships‘ and this is critical in the ‘unpaid’ debate. We encourage companies to offer work experience (unpaid but preferably with expenses covered) for periods of up to 2 weeks. Thereafter (when the value generated exceeds that which is which is earned), we suggest companies offer paid internships for anything up to 3 months. For us, this is more a moral issue than a legal one (Blog here). After 3 months we suggest companies either offer people a job or let them get on with their job search. Otherwise they get stuck in the ‘internship trap’. Although WEXO is clear that work experience, apprenticeships and internships are totally different entities (based on duration, who applies, and remuneration or who derives value), the public at large might not be and so consideration needs to be given to this. Furthermore, we see the need for clarity on interns being entitled to National Minimum Wage, apprentices being entitled to £2.50 an hour and job seekers being allowed to do work experience for up to 2 months on JSA (Job Seekers Allowance).

* CAREERS ADVICE: Against a backdrop of record youth unemployment, a recent Ofsted survey suggested that one in three schools are failing to give good advice to students about future career prospects. A report by Deloitte said that 95% of young people want employers to be more involved in providing guidance about careers citing that they feel ‘bewildered’ and ‘uninformed’ by the career choices on offer. We would encourage government to back inspirational careers guidance to the like of the ‘How I Made It in…’ Events involving executives from the front line of their industries as featured on WEXO tv.

* FUNDING: As per our blog at the time, in the budget, George Osborne committed to investing in 4 times as many 8 week work experience placements as previously for 18-21 year olds. The scheme, administered by Job Centre Plus allows those doing so to collect JSA (Job Searchers Allowance). It’s a reasonably well conceived initiative but it doesn’t address the issue of finding rewarding work experience. “As George pointed out, the problem is that only 1 in 10 companies in the UK offer work experience as opposed to 1 in 4 in Germany. If George wants to see a return on his recent investment he needs to address both sides of the equation”. So funding for this and the £180m ‘Apprenticeships’ packages should address supply of opportunities as well as demand.

3) WHAT CAN BE ACHIEVED?

With the above in mind, WEXO is excited about the prospect of working with the powers-that-be to help educate companies and incentivise them to recruit and invest in young people who are better informed.

* PROBABLE OUTCOME: At the very least, we feel sure that the government will honour its offer to listen to, acknowledge and where possible, address, the consensus suggestions of the key players in this space. We trust that this will not be a repeat of the unfulfilled promises of 3 years ago when we met the Panel for Fair Access to the Professions and offered to help with The Graduate Talent Pool.

* POSSIBLE OUTCOME: Even if say just SMEs (and especially ‘STEM’ [Science, Technology Engineering and Maths] companies – the future?) could recoup the costs of one 3 month internship each from VAT at National Minimum Wage (~£220 a week), it would help them show commitment to the managers of tomorrow? Instead of giving £15m worth of funding directly to the Higher Education Authorities – HEFCE (which was largely left unspent?) – we would suggest that the government ‘atones’ itself for the recent tuition fee hikes (which we actually support) and invests some of the proceeds in subsidies that public-private sector partnerships (including HEFCE) can promote to companies that are desperate to take on young people. Perhaps funding could come from the new £50m ‘Growth and Innovation Fund’? We believe that given the ROI generated by graduates any such initiative would be cost-neutral at worst.

* PREFERRED OUTCOME: WEXO was recently a member of two syndicates that spent a considerable amount of time, money and energy submitting tenders (and being shortlisted) for grants to supply work experience and Internships across London. With the funding then being clawed back from the LDA, the projects were subsequently abandoned. We acknowledge that the government would rather let the market decide who the winners are (and we are happy to operate on this basis) but what IF this government decided that it would like to back responsible corporate and social enterprises (as well as banks) and actually INVEST in the next generation through performance related, service provision grants to the like of the ones discussed above? A little could go a long way to get the motor running and generating decent GDP growth.

My thanks for the opportunity.

Robin Kennedy. Co-Founder, WEXO