1 in 4 youth underemployed: CGA study

Leads to erosion of skills, people performing and producing at ‘sub-optimal levels’
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 12/04/2012

Education software company Desire2Learn has several reasons for hiring young workers: They’re more up to speed on cutting-edge technologies; they’re experimenting with technology in ways older workers are not; and they are using the company’s software on a daily basis at university and college, according to Dennis Kavelman, COO.

“We get to hire these folks who have been our customers and they can really say, ‘For this feature, here’s how other programs do it better’ or ‘We really love this.’ It’s pretty cool that we can bring in real users of our software,” he said.

To recruit young workers, 600-employee Desire2Learn conducts on-campus recruitment and partners with local universities in and around its head office in Kitchener, Ont., to offer co-op opportunities to students. The company takes on about 40 co-op students per term — the majority for technical roles from engineering programs — and many are later hired on full time.

“They get on-the-job experience and to really see if they like what they’ve chosen as a path and to see what it’s all about and, for us, we get to get them in to see who’s really a superstar,” he said.

It’s initiatives like this that are helping to combat youth underemployment, which is a pressing issue, according to a report by the Certified General Accountants Association of Canada (CGA).

One in four (24.6 per cent) recent university graduates are underemployed, found Youth Unemployment in Canada: Challenging Conventional Thinking.

“It’s our view that (youth underemployment) is probably the most salient or most important issue that we can address over the next few years,” said Rock Lefebvre, co-author of the report and vice-president of research and standards at CGA in Burnaby, B.C.

Even more young workers — 39 per cent — feel they are being underutilized at work, according to a recent survey of 3,000 Canadians by Sun Life.

Underemployment can be seen in two ways — the underutilization of skills and underutilization of labour.

The underutilization of skills refers to people who are working in a position that requires less education than the level they currently have.

“You’ll often see that in retail, of course, clerical jobs, where people could have a graduate degree and just to get their foot in the door they’ll accept a job they otherwise wouldn’t have necessarily chosen. But that’s what’s available, so you have a great number of people that, rather than be unemployed, will do that,” said Lefebvre.

Underutilization of labour occurs when workers are willing and able to supply their labour full time, but work in part-time jobs because they could not find full-time employment.

“We’ve always said youth underemployment is this big hitting epidemic in the new grad market that nobody talks about enough — it’s a huge problem,” said Lauren Friese, founder of TalentEgg, a Toronto-based company that connects employers and recent graduates.

“If you included underemployment, youth unemployment would be closer to 40 or 50 per cent,” as opposed to the current rate of 15 per cent.

Underemploying young workers is hugely inefficient and a big waste of talent, said Kavelman. Employers need to recognize the value young workers bring to the workplace.

“People are most creative when they haven’t been conditioned or tainted by ways of doing things in certain companies so they come out with these brand new, creative ways of doing stuff and it really invigorates the team,” he said. “And they have super-high energy.”

If employers are underutilizing young workers, it means they are producing and performing at sub-optimal levels, said Lefebvre.

“You have lower performance because people are not necessarily as motivated as they otherwise would be and, overall, it just doesn’t allow these people to grow into self-actualization or full potential so everyone loses in the end,” he said.

The consequences of underemployment for an individual may appear through: the erosion or loss of skills, knowledge and abilities; diminished current and life-long income; job dissatisfaction; and emotional distress that, in turn, may lead to deteriorating health, found the report.

“It also hurts your pocketbook because… as soon as you start working, you have to pay back your student loans, which means you are dependent on continuing to work which reduces your ability to search for meaningful work, which delays your entrance into your career,” said Friese.

The overarching cause of underemployment in Canada is there are too many trained people for the number of opportunities available — there’s a misalignment among the skills that youth have and the positions that need to be filled, said Lefebvre.

This is largely because Canada has a lot of people choosing to go to university only because they think they have to, because society tells them to, said Friese.

Certain Western provinces that are strong in minerals or extraction industries seem to be missing a lot of professional and skilled tradespeople, said Lefebvre.

“That’s where I think it’s important to recognize the guidance, the counselling, the promotion of programs could have been done differently.”

Another potential cause of underemployment is youth interprovincial mobility has declined, found the report. Historically, youth have been a highly mobile segment of the workforce, accounting for about 40 per cent of all individuals who migrated from one province to another. But in 2011, youth accounted for only 23 per cent of such moves.

“The youth are staying closer to their family and friends than possibly 10 and 20 years ago during other recessionary periods,” said Lefebvre. “If I live in Ottawa and I want to stay close to my friends and family, I might take a clerical job instead of maybe landing a higher-paying, more professional job in Edmonton.”

One of the ways employers can combat underemployment is by creating strong entry-level opportunities and offering graduate rotational programs, said Friese.

“You tour through essentially four different departments in the organization for about two years and, when you’re done, they stream you into wherever you were the strongest and where there’s a need,” she said. “It’s a great way for them to test out where you fit best because how could you possibly know when you’ve never worked before?”

It’s also important for employers to make sure they are matching youth with meaningful employment that fits their education and experience levels, said Kavelman.

“If we’re hiring co-op students, we’ll make sure it’s not just, ‘Hey, I need somebody to type out articles and read the web.’ We’re going to make sure that role is developing you and doing the things you need to do,” he said. “Making meaningful roles available to young people is the real key.”

If an employer already has underemployed youth within its workforce, it should strive to get them into positions that are more suited to them, said Lefebvre.

“(If) they take someone with a graduate degree in engineering as a receptionist, let them gain some experience or get in, they should also be maybe more intent on moving these people up the ranks fairly quickly so they can reach their optimum, perform at their best level and, in the end, the employer gains from that.”

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