Britain’s growing youth employment problem is putting pressure on the government to make it cheaper for businesses to hire younger workers, with one of the country’s largest job boards warning that employers face a sharp increase in employment costs when staff reach 21.
CV-Library has backed Conservative proposals aimed at reducing the cost and risk of hiring young people, with founder and chief executive Lee Biggins urging ministers to act in the upcoming Budget rather than waiting for the next election.
Biggins said the current structure created a “cliff edge” for employers, particularly when higher minimum wages and employer National Insurance contributions begin to increase the cost of employing younger staff.
“Proposals that help reduce the cost and risk for companies to employ staff – especially those with little or no experience – are exactly where the country should be focused,” he said.
“With record numbers of young people cut adrift from the workforce, the very best way to get them into work is to create more jobs. Employers face a cliff edge cost rise at 21; it costs a company about £7k more in employment costs with higher minimum wage and employer national insurance contributions.”
Biggins argued that easing the increase could allow businesses to absorb rising employment costs more gradually as workers gain experience, while opening opportunities for people entering the labour market.
The intervention comes as employers across labour-intensive industries face mounting pressure from wage and employment costs, potentially making inexperienced workers less attractive at precisely the point they need a route into employment.
Biggins said ministers should use the Budget to intervene immediately.
“We shouldn’t have to wait for the next election though. Labour has the chance to help businesses and boost hiring in this budget. As a nation, we can’t afford to wait. Young people want to work. They want to contribute to society and feel fulfilled. We need to give them that chance.”
The debate highlights a central challenge for policymakers; how to increase youth employment without imposing further costs on businesses already facing higher labour bills.
For employers, the question is increasingly whether the cost of taking on inexperienced workers can be brought down before another generation becomes detached from the labour market.
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