Columnist

We must make it easier to hire young people

There is a simple truth about the labour market that policymakers often forget: when hiring becomes riskier, employers hire less.

The latest figures should give us pause.

For the first time in a generation, youth unemployment in the UK has risen above the European Union average, with younger workers bearing the brunt of the slowdown.

Since mid-2024, employment among under-35s has fallen sharply. 

At the same time, surveys show more than a third of employers intend to reduce permanent hiring in response to upcoming employment reforms.

These are not two separate stories. They are the same story.

Businesses do not wake up in the morning looking for ways to avoid creating jobs.

They hire when they feel confident.

They invest in people when the risks are manageable.

When regulation increases cost, complexity and uncertainty faster than productivity rises, caution becomes rational. 

Entry-level roles are, by definition, a bet.

A 19-year-old school-leaver does not arrive fully formed.

They require training. They require patience. They sometimes require second chances.

Shorter qualifying periods for unfair dismissal, expanded day-one rights and a growing compliance burden may be well intentioned.

But they inevitably make that first bet feel riskier.

If the margin for error narrows, the willingness to take a chance narrows with it.

That is how youth unemployment rises.

There is also a hard economic reality to confront.

The state spends around £55,000 supporting the average university degree, compared with roughly £9,000 to train an apprentice.

Apprentices earn while they learn. They contribute to productivity from the outset. They build skills aligned to real business needs.

Yet many employers tell us they feel less able to expand apprenticeship schemes as employment law becomes more complex and inflexible.

If hiring feels like a legal minefield, the incentive to create additional trainee roles weakens.

That should concern anyone serious about productivity.

The Government has set an ambition of raising the employment rate to 80 per cent, which is welcome.

But reaching that target requires roughly two million additional people in work.

There are currently around 800,000 vacancies. The rest must come from new job creation.

Those jobs will not be conjured into existence by Whitehall.

They will be created, or not, by thousands of business owners making everyday decisions about risk.

If we want fewer young people on benefits, we must make it easier to employ them.

Because in the end, the best protection for a young person is not a thicker rulebook.

It is a job.

Kiran Fothergill is Pickerings Lifts’ director and Jobs Foundation North East chair

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