How businesses can get around the Kickstart Scheme's 'red tape'

Businesses have been given an extra three months to take on young employees through the Government funded Kickstart Scheme after Rishi Sunak extended the initiative in his Conservative party conference speech last week.

But opinion is divided on the value of these placements, with some companies describing the process as unnecessarily bureaucratic and slow, and the concept flawed.

Mike Cherry, national chair of the Federation for Small Businesses (FSB) says that, although the scheme was ‘vital to help young unemployed people gaining workplace experience and develop new skills’, it had failed to hit its targets.

‘The scheme is supposed to help 250,000 people into work, but is currently stuck at just 76,000,’ he explains.

Firms have until December 17 this year to apply to employ a Kickstart candidate, but now have until March 31 to start the candidate’s placement. Under the terms of the scheme, the government pays minimum wage for 25 hours a week to Kickstart candidates, as well as paying other costs such as National Insurance and pension contributions.

Placements last for six months and applicants must be aged between 16 and 24 and receiving Universal Credit when they apply.

The Chancellor claimed the extension would ‘see more young people developing the skills, confidence and experience to support them into long-term sustainable employment’, but critics say Kickstart has become mired in red tape.

‘While the idea seemed great at first and many have enjoyed the opportunity of work, sadly the Kickstart scheme seems to have caused employers a lot of stress, which kind of defeats the whole object of it,’ says Gary Parsons, managing director at Belper-based recruitment and HR experts, Talk Staff.

‘There are countless blockages. Right now, the system simply isn’t stable enough to be the success that the Chancellor is making it out to be.’

Case study: ‘It’s taken so long — I’m frustrated’

Anna Cargan runs a new and second-hand children’s clothes business called Build A Bundle Childrenswear.

Despite applying for a Kickstart employee in June, she is no further on in the process.

‘We have had nothing back, except an email to say it was being processed and was taking them a bit longer to get it sorted,’ she says.

Anna, from Cumbria, is now delaying taking on another employee as she hoped to get a Kickstart worker.

Anna Cargan (right) has been unable to hire a Kickstart worker (Picture: fish2photography)

‘We only have the work for one more person so we’ll end up with too many otherwise. It’s now delaying where we need to be moving forward in our business which is pretty frustrating to be honest. It’s such a great scheme but I feel we’re now a bit stuck waiting to hear back, and can’t do anything until we know what’s happening.’

Anna feels her role is a great opportunity for the right candidate.

‘We can offer a school-hours job that is entirely flexible around school holidays, as we’re mums ourselves and it’s really important to us that our employees don’t have the childcare nightmare that we endured in our past corporate jobs.

‘School hours jobs are hard to come by — It would be a dream job for a parent with school age kids, so it’s frustrating that the vacancy hasn’t been able to be used yet, as we would love to be able to offer someone this opportunity to get back into work!’

Getting set up with Kickstart

While the concept of having a government-funded employee for six months may be attractive, the Kickstart scheme comes with some strings attached.

The candidate cannot replace a worker, and you must support them to become more employable.

Businesses receive a £1,500 payment per candidate to help them train up their new staff. Initially, smaller businesses who wanted to apply for fewer than 30 candidates were forced to use a Gateway business, which handled Kickstart applications for them.

These Gateway businesses often took the £1,500 as a charge for using the Gateway, but it has since been made possible for smaller businesses to apply by themselves, so that they receive all of the incentive.

Kickstart in numbers

  • 16 to 24-year-olds on Universal Credit are able to become Kickstart employees
  • The government pays their wages (minimum wage appropriate to their age and national insurance and pension contributions) for 25 hours a week for up to six months
  • £2billion — estimated cost of the scheme to the public purse
  • £1,500 grant is received by the business for set-up costs and employability support (though some of this may be taken by a Gateway scheme to help you apply)
  • 77,000 Kickstart employees had started by September 22, 2021
  • 250,000 Kickstart jobs was the target when the scheme launched in July 2020

There is more about how to apply for the scheme on the government website. To be successful, your Kickstart application must show that your business is established and financially stable, and that you can give a Kickstart candidate a good experience of work that increases their future chances.

Once a Kickstart application is successful, business vacancies become live on a Jobcentre Plus site, through which candidates can apply. Businesses can interview candidates to ensure that they are suitable.

Louise Burns, director of Tyne and Wear-based Nineteen Recruitment, has mixed experiences of candidate quality.

‘We employed an excellent candidate who has gone way beyond our expectations and has been retained following the Kickstart six-month period. However, more recently we’ve advertised for a second Kickstart candidate and we’ve had huge challenges with candidate attraction. It’s an ideal opportunity for someone to get their foot on the career ladder of recruitment yet I can count the number of candidates we’ve received on two fingers across a five-month period. It begs the question whether there are candidates genuinely wanting to take part in the scheme,’ she says.

Other users say it has taken too long to get onto the system. ‘Our clients tell us that the Kickstart Scheme is a “curate’s egg”, namely good in parts, but not in others,’ says Sarah Loates of Loates HR Consultancy.

‘Typical grumbles are speed, and multiple recommendations by Job Centre coaches not then translating into actual applicants. The Chancellor will need to give the scheme an overhaul to keep pace with nimble SMEs who move at speed, and loathe bureaucracy, if he wants to help them find real talent.’

Case study: ‘I can’t afford to keep my graduate on my own’

Social media coach Rachel Allen from Making Business Social decided she wanted a Kickstart graduate to help her to organise her business.

‘I just didn’t have enough hours in the day to manage it all myself. So I thought it would be a really good opportunity for somebody to come in for six months to help me basically get myself together, and I thought it’d be a really good learning opportunity for a young person as well,’ she explains.

Rachel applied through a small business gateway, and says that the process did take ‘quite a bit of time’, with initial conversations taking place in the November before her candidate started in May.

Rachel Allen says the scheme worked well (Picture: Making Business Social)

‘Once that process all happened, and we had the admin in place, it was all very, very quick. I had probably five CVs come through, and I interviewed two people. I took Eddy because he was a marketing graduate.’

Eddy and Rachel have worked together since April. Although the Kickstart funding only pays for 25 hours a week, Rachel topped up Eddy’s hours to 40.

‘It’s worked out brilliantly, he’s had a lot of training. I’ve invited him to client meetings, and he’s taken on some client work. It’s really helped me to meet my business objectives. Having taken quite a battering at the beginning of the lockdown with my business, I feel quite happy that I’ve got some support from the government,’ she says.

However, Eddy’s work with Rachel will finish in November.

‘I can’t afford to keep him without the funding,’ she explains, adding that she will be able to offer him some freelance work.

Eddy himself, however, is pleased with the boost the scheme has given his career prospects. The 23-year-old was on Universal Credit and searching for jobs when he decided to apply for the Kickstarter Scheme and was taken on by Rachel at Making Business Social.

‘I had just graduated with a marketing degree. The marketing graduate schemes I’d applied for after university closed down because of Covid,’ he explains.

Being a Kickstarter, he says, ‘gave that foot in the door for me. It gave me a chance to get the experience I needed. I’ve got to work one on one with Rachel and she’s got 20 years’ marketing experience. So that’s great for me.

‘I’ve been able to experience that real side of things coming out of uni. I’ve been managing our clients’ social media platforms. Sometimes I’ll be on meetings with them for Zoom. And I’ll discuss marketing strategy, where they want the business to go and stuff like that.’

Making the most of your candidates

Once a business has taken on a Kickstart candidate, it is up to them to use the six-month period wisely. They can top up the hours received or the wages earned if they feel this will improve the placement, but will have to pay for this extra themselves.

You can also add more candidates, so long as you do so before the December 17 deadline. At the end of the placement, you can negotiate to keep your candidate and pay them from your own company, or you can let them go with no strings attached.

You might also consider offering them an apprenticeship, which also comes with some funding from the government, who has extended the deadline for £3,000 cash incentives for those taking on apprentices until the end of January. Find more information about these incentives work at gov.uk/guidance/incentive-payments-for-hiring-a-new-apprentice. However, the deadline change had not been updated at the time of going to press.

While there have been some genuine Kickstart successes, it remains to be seen whether the extension will allow Kickstart to hit its target of helping create 250,000 jobs, even in the short term.

In association with the SME National Business Awards.

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