The future is hands-on: the labour market is finally catching up with FE

For most of the last forty years the cultural wind blew against further education. University was the route ambitious parents pushed their kids towards, trades were positioned as the back-up, and a generation of young people picked their post-16 pathway based on a status hierarchy that had little to do with what the labour market was actually asking for.

A recent report pushed this to the front of the conversation. Microsoft’s research team analysed 200,000 real conversations with Copilot, mapped them against occupational data, and produced an applicability score for every job in the US economy. The roles with the highest AI applicability turned out to be interpreters, historians, writers, sales staff, customer service representatives, and almost everything in the computer, mathematical, office, and administrative categories.

The roles with the lowest were the ones that FE has spent decades training people for: nursing assistants, ship engineers, roofers, tyre repairers, plumbers and electricians. Microsoft’s own framing of the finding speaks directly to this sector: occupations that require a degree have higher AI applicability than occupations with lower formal education requirements.

This will not be news to anyone reading FE Week. The sector has been making this argument for years, often into a headwind. What is different now is that the broader labour market is starting to make it without prompting. Wages in the skilled trades are rising. Vacancy backlogs in care, construction, and engineering run years deep. The risk-adjusted return on a level 4 apprenticeship is starting to compete seriously with the risk-adjusted return on most undergraduate degrees, and Microsoft is far from the only research outfit publishing data that points the same way.

Look at the sector’s own numbers and the same shift shows up. Apprenticeship starts rose 11.9 per cent in the first half of 2025-26, with higher apprenticeships up 23.5 per cent on the same period last year. The achievement rate climbed from 51.4 per cent in 2022 to 65.4 per cent in 2024-25, the biggest sustained improvement since standards came in. ITPs led with a 5.7 percentage point jump in a single year.

Government has clocked the structural argument, which is what the youth guarantee and the £1.5 billion youth opportunity package are about, alongside Starmer’s repeated push for more young people in apprenticeships.

Set against this, supply is the harder problem, and the case has been made well in these pages already. Engineering apprenticeship starts have fallen 25 per cent since 2017, level 2 apprenticeships have halved, and employers are choosing higher-level apprentices partly because they are less risky to take on. Even with the moment now running in the sector’s favour, not enough of the people who would benefit from these routes have been completing them (65 per cent in 2024-25).

The DfE’s 2023 evaluation survey of non-completers shows that the single most common reason for leaving an apprenticeship was getting a better job offer, at 16 per cent. Personal or domestic factors accounted for 36 per cent. 65 per cent of all non-completers leave within the first 12 months of their programme, and the survey shows how many simply realised the work was not what they had imagined it would be.

That is a clarity-of-pathway question and is one of the cheapest, fastest levers the sector has to pull.

Vocational careers guidance in this country is thin. Most young people pick an apprenticeship the way they pick a degree, with a hazy sense of what the work involves and an even hazier sense of which kind would suit them. There is real work to do here, and I have been building Rumbo in part to help with the self-understanding piece, but the bigger point is sectoral.

The hands-on economy is going to keep rising. The sector’s job now is to make sure the people who arrive on its programmes are arriving with their eyes open.

The cost of getting that wrong shows up as a non completion statistic. But underneath the number is a young person who tried something the country needed them to try, found it was not what they thought, and added one more data point to a story the sector cannot afford to keep telling.