UK labour costs and regulations threaten youth employment

A survey by the Confederation of British Industry (CBI) and Pertemps indicates that rising labour costs and employment regulations are threatening the UK labour market's competitiveness and limiting job opportunities for young people.

According to the findings, only 15% of businesses feel confident about hiring, a decrease from 24% in 2025. Approximately 73% of firms identified employment costs as the primary threat to competitiveness, while 72% cited employment regulation as a major risk. These pressures are specifically impacting entry-level roles; 44% of businesses reported that high recruitment and onboarding costs are driving them toward experienced hires rather than young workers.

The survey also highlights a decline in training opportunities, with 53% of firms offering fewer apprenticeships than desired due to cost pressures. This comes amid data from the Office for National Statistics showing that approximately 981,000 young people aged 16 to 24 in the UK were not in education, employment, or training (Neet) between April and June this year.