Insights into small businesses and youth employment prospects

A new report on understanding the youth labour market, now available to download, has suggested ways that small and medium enterprises can overcome perceived barriers and work with young people to improve their economic prospects.

EY Foundation commissioned Dr Rachel Doern, Reader in Enterpreneurship at the Institute of Management Studies at Goldsmiths University of London to research small and medium-sized enterprises (SMEs) based in South East London.

The report, entitled 'Understanding the main opportunities and barriers to SME engagement with the youth labour market' draws on the results of a longitudinal interview-based study of 20 SMEs and their perspective on and experience with young people.

The study identified six perceived opportunities from engagement with the labour youth market for SMEs, and 10 perceived barriers that stand in the way.

The perceived opportunities were:

Diversifying the business and industry
Bringing fresh perspectives to client projects
Energising the company brand
Enhancing external communications
Improving internal work processes
Developing a social purpose and conscience

The perceived barriers were:

Lack of access to young people
Lack of understanding of young people
The associated costs of working with young people relating to finances and staff time
Lack of support infrastructure in SMEs
Fear of having a negative experience
Lack of interest from young people in the work
Rigid features of work placements
Work placement bureaucracy and communications
Shifting work patterns due to the pandemic
Fears focusing on recruiting young people could distract from pandemic recovery efforts

The report indicates that while SMEs are destinations for young people, a number of perceived barriers stand in the way of these businesses engaging more fully with young people. Improving employment prospects for young people will depend on addressing these barriers and exploiting the opportunities and the report makes a number of recommendations for how this can be achieved in each case.

Responding to the report’s findings, Interim CEO of EY Foundation, Jodie McNally said:

It’s great to see that SMEs want to work with young people and to also see an acknowledgement of the energy and insight a more diverse talent pool can contribute to every workplace. This report showcases the benefits of – and perceived barriers to – working with young people, providing a basis for SMEs to come together to close the gap between wanting to engage with the youth labour market and actively employing young people.

Jodie McNally

EY Foundation Interim CEO

Dr Doern, the report author, said:

In speaking with SMEs owners, I was rather struck by the overwhelmingly positive attitudes they had towards working with young people, and the firmness of their beliefs that young people could add value to businesses. At the same time, the reality for many of these SMEs was that their direct experience of working with young people was limited to small numbers, and few employed young people from low-income backgrounds specifically.

Dr Rachel Doern

Report Author

The EY Foundation is a charitable company registered in England and Wales and Scotland with registered charity number 1157154 and SC045076. It is also a member firm of Ernst & Young Global Limited