The research, ‘Young People and Resilience – Staying on Track’ conducted by VicHealth in June this year, consulted 54 participants aged 18 to 25 years, about the impact of the increased time between when graduates complete their studies and find stable employment. 

Graduates now take 2.6 years to find work, compared with 12 months a generation ago, and this delay is costing Victoria up to $100 million a year in mental health impacts and societal costs.

Young people also stand to lose up to an additional $130,000 of lost earnings (in real terms) over their lifetime, the research revealed.

The consultative research covered a randomly selected group of graduates from a broad range of courses and tertiary institutions, including both universities and TAFE, and sought to quantify long-term societal costs. 

VicHealth Mental Wellbeing manager Irene Verins said the impact of the delayed transition for graduates equated to a $1.25 billion lifetime cost to the economy.

“The costs are significant,” Ms Verins said, citing the emotional impact of the difficult transition to work, delayed independence and loss of potential earnings, as well as the increased cost of medications required to treat anxiety and depression and other mental health conditions.

“Not being employed means young people are not achieving societal milestones or gaining the resilience they need,” she said.

“We call it churn – young people are neither in education nor work and this leads to a loss of self confidence and low self-esteem,” Ms Verins said.

“Our concern is that when mental health issues manifest early, the research shows it can become a lifelong issue. Hence why we really want to protect young people at this stage.”

The Staying on Track research showed one in three young adults were actively seeking work, an increasing proportion were unemployed and underemployed and many did not have the professional networks to obtain stable work.

The increasing automation of jobs and production work going overseas had also made it considerably harder for young adults in the 18 to 25 year category.

Director of Inspire HQ Recruitment in Ballarat, Ange Connor said the research findings were a concern and that a lack of ‘employability skills’ in graduates was a factor, especially communication skills, social interaction and literacy

Ms Connor said they were seeing an increased number of graduates seeking assistance across all work areas, including accounting, engineering and manufacturing.

“We can get 200-300 applications but a lot of candidates haven’t had any exposure to the workforce, even on a casual basis, which means they lack some of those customer service and communication skills.”