Small Talk: Many young people are entering the jobs market without the right skills

 

Over the past couple of weeks thousands of young people received their exam results and I’d like to congratulate them all. Many of these school leavers will go on to work for a small firm or even start their own business.

Small businesses are among the UK’s biggest employers, accounting for six in ten private sector jobs. In a small business, employees can make a big impact from day one. You get a lot of responsibility, make managerial decisions and often have scope for rapid promotion. This may appeal to young people who aren’t just driven by money but want job satisfaction, autonomy, responsibility and flexible working. Small businesses are often well-placed to offer these benefits.

It is important that when young people start their careers, they are work-ready. Qualifications are an important determinant of what an individual does next. They also allow businesses to recognise what level of knowledge people have so that they can get the skills that their business needs. The problem is, too many people are guided into university and graduate with high-level degrees which don’t always meet the needs of businesses.

This is creating a skills gap where we have a large workforce with high-level qualifications but not necessarily producing the skills businesses want. It is why we are seeing an increase in the number of job vacancies as result of a lack of skills. Qualifications must be relevant and help people into employment. Higher education is just one route but alternative paths can be just as rewarding. The Federation of Small Businesses (FSB) is concerned that young people are often not made aware of training routes that may better meet their aspirations.

One such route is apprenticeships. They are good for young people and business. They offer a blend of practical and theoretical learning in a paid role designed to give people industry-specific skills. This increases their chances of getting a job afterwards. Research suggests that the average person completing an apprenticeship will increase business productivity by more than £200 a week. Nearly half of all new apprenticeships are created by small businesses.

I welcome government efforts to make apprenticeships employer-led and the new standards being created. This will boost the quality and reputation of apprenticeships, which will hopefully increase take-up by young people and businesses. The manufacturing and construction sector have been built on the back of apprenticeships and many other industries value on-the-job training, such as aerospace and engineering. However, it is important to move beyond the traditional apprenticeship sectors. That is why the recently announced apprenticeship standards in accountancy, law and financial services are an important step.

We also have to change the culture whereby vocational education is a path trodden only by people who couldn’t get into university. Not all businesses want university graduates as they increasingly value practical experience. Despite this, schools are not promoting alternative opportunities to students. I was concerned to hear that two thirds of teachers said they would not encourage apprenticeships if their students had the grades for university. The UK should aspire to match standards set in other countries, such as Germany and Switzerland, where vocational training is given more prominence in the education system.

Employability must be embedded in the fabric of teaching and learning. This begins at school, where young people should have access to careers education from an early age. Teachers need to be aware of the benefits and opportunities of vocational education so they can encourage young people into training that is relevant.

It was a mistake for the Government to abolish compulsory work experience for GCSE students so businesses must find other ways to engage with young people. This puts businesses at the forefront of efforts to reduce the skills gap by telling students what skills they are looking for rather than relying on the Government to tell them.

This is why the FSB’s chosen charity is Young Enterprise, and our members up and down the country are engaging with schools and pupils. We want to see the next generation of entrepreneurs drive the economy forward. Understanding how to get started in business is the first step.

Next year there will be another cohort of students receiving their results. It is not too late for teachers to give them a better, more complete picture of what their routes into employment could look like, and for more businesses to get involved by asking themselves what skills they need and passing that on to students. If we are serious about addressing the skills gap and creating the entrepreneurs and business leaders of tomorrow, then we must give young people the tools they need to succeed.

Most small business bosses skimp on their breaks

With most big businesses shutting down for the holiday weekend, thousands of small and medium-sized business owners will take no time off at all during 2014.

Workers are entitled to 20 days’ annual leave a year, but the majority of SME owners will take less than the legal requirement for their staff, while one in three will take 10 days or fewer off, and one in seven will take not a single day’s holiday, according to the latest SME Risk Index by the global insurer Zurich.

Many entrepreneurs are worried about being away from their businesses for too long and are concerned about lost work and the cost of taking the time off. One in five SME owners does not trust anyone else to take over, preferring to close the business down while away.

Richard Coleman, director of SME at Zurich, said: “Despite some views about the lifestyle benefits of working for yourself, the reality is much different.”

Mulberry rival bags first shop

A new British handbag brand targeting shoppers who find Mulberry too expensive has opened its first shop after recording double-digit sales growth this year.

Village England was founded in 2012 by Eddie Knevett, former head of accessories at the department store House of Fraser, and Julia Dobson, former UK boss for the LVMH-owned French brand Céline. Its first shop – a pop-up shop in Covent Garden – opened  this month and the pair are looking at options for a permanent store.

The brand’s wholesale orders are up 31 per cent on last year. It is stocked in 26 department stores and independent shops, having opened new accounts in Italy, Spain and Belgium. It forecasts turnover of £400,000 this year, with retail sales for the spring/summer season up 8 per cent compared with last year while website sales jumped 53 per cent.

Most of its bags sell for less than £300.

Small Business Person of the Week: Cecile Reinaud, Founder, Séraphine

I was approaching 30 and colleagues and friends were becoming pregnant. A common complaint was that they could not find anything elegant or fashionable to wear. I was working at an ad agency and loving the career, but I had a burning desire to create my own company.

My friends knew that my hobby was creating clothes and begged me to make something to accommodate their growing bumps. Thanks to them I decided to take the plunge and set up a maternity wear business.

I was always impressed by the entrepreneurial culture of the UK, which is much stronger than that of my native France. Still I was surprised how relatively easily I was able to raise my start-up capital from business angels. With this initial investment I was able to open our flagship store in Kensington, and four years later to launch our website.

From the first season 12 years ago we turned a healthy profit. Our fourth London store opened this week, in Clapham, and a New York store will open in a few months. Revenues last year were £8.3m.

I was lucky to find my vocation early on and apply my love of fashion to an area that was so in need of creativity, while I also have a fantastic team.

It was the brand’s appeal among A-list fans such as the Duchess of Cambridge that really propelled our success. Kate gave us a fantastic morale boost by wearing one of our designs for her first official family picture.

Interview by Toby Green

John Allan is chairman of the Federation of Small Businesses. David Prosser is away.

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