Why are more young people becoming NEET, and what role does hiring play?
Nearly one million young people are now outside work, education or training
Recent figures show that around one million young people aged 16 to 24 are now classed as NEET (not in education, employment or training). That's roughly one in every eight young people across the UK.
As someone who works closely with local colleges, employers, skills providers and through my involvement with the Local Skills Improvement Plan (LSIP), this is a challenge that is particularly close to my heart. Because behind every statistic is a young person trying to take their first step into employment.
The question is, why are so many struggling to do so?
The economics of hiring have changed
There is no single reason behind rising NEET numbers.
Mental health, economic inactivity, education pathways and wider labour market challenges all play a role.
But one factor that cannot be ignored is the changing cost of employment.
Over the last few years, businesses have faced rising wage costs, increases in Employer National Insurance Contributions and growing pressure on operating costs generally. As a result, hiring decisions are becoming increasingly commercial. If a business can employ somebody with several years' experience for a similar overall cost to somebody entering the workplace for the first time, many will naturally choose the lower-risk option. That doesn't mean employers don't want to support young people, they've become more cautious about where they invest their time and money. It means they are balancing training investment, productivity expectations and financial pressures at a time when many businesses are already operating on tight margins.
The irony is that many employers are still struggling to recruit. While NEET numbers continue to rise, many employers are simultaneously telling us they cannot find the right people. That's what makes this challenge so complex.
On one side, businesses are struggling to find the right people in certain sectors. On the other, a growing number of young people are struggling to gain the experience needed to enter the workforce. Through my work with local colleges, employers and the Local Skills Improvement Plan, these conversations come up regularly.
Employers want work-ready candidates.
Education providers want employers to create opportunities.
Young people want experience.
The challenge is bringing all three together in a way that works commercially for everyone involved. Locally, we're seeing some fantastic collaboration between colleges and employers, but there is still work to do if we're going to close the gap between education and employment.
Experience is becoming the biggest barrier
One of the biggest frustrations for young people is being told they need experience to get a job. At the same time, employers are increasingly looking for candidates who can contribute quickly and require minimal training. It's easy to understand both sides. Businesses need people who can hit the ground running. Young people need someone willing to give them their first opportunity. The risk is that if every employer focuses solely on experience, future talent pipelines become smaller and skills shortages become harder to solve. After all, if nobody hires potential, where does future experience come from? But there is more support available than many employers realise. One thing I regularly find when speaking with employers is that many are unaware of the support available to help them recruit and develop younger people.
Apprenticeships
Apprenticeships remain one of the most effective ways to bring new talent into a business while accessing funded training.
Depending on the age of the apprentice and the size of the employer, businesses may benefit from:
Government-funded apprenticeship training
No Employer National Insurance Contributions for eligible apprentices under 25
Access to Apprenticeship Levy transfer funding from larger organisations
Structured training delivered alongside practical workplace experience
For many SMEs, this can reduce both the cost and risk of hiring somebody with limited experience.
Financial support for employers
One thing many employers don't realise is that there is often financial support available to help offset the cost of employing and developing younger people.
The support available varies depending on the age of the learner, the programme, employer size and location. However, employers may be able to access funded training, National Insurance savings and incentive payments worth several thousand pounds.
Examples of support that may be available include:
Government-funded apprenticeship training
Employer National Insurance savings for eligible apprentices under 25
Apprenticeship incentive payments for certain age groups and programmes
Apprenticeship Levy transfer funding from larger organisations
Local authority, combined authority or regional growth funding
Skills Bootcamps and sector-based work academy programmes
Depending on the scheme, age of the learner and local funding available, employers may be able to access support worth £1,000, £2,000 or more through a combination of incentive payments, funded training and National Insurance savings. While funding programmes change over time, many employers are surprised by how much support is available once they start exploring the options. If you're unsure where to start, speak to your local college, training provider or Growth Hub. They can often help identify funding opportunities and support available in your area, alongside guidance from the Government Apprenticeship Service and Skills Bootcamp programmes.
Skills Bootcamps and work placements
Skills Bootcamps continue to provide employers with access to candidates who have completed industry-focused training before entering employment. These programmes help employers access motivated candidates while reducing some of the barriers often associated with entry-level recruitment. For businesses looking to develop future talent rather than simply buy experience, they can be a valuable route into recruitment.
Looking beyond the immediate hire
The reality is that bringing young people into the workforce requires investment. There is training involved. There is support required. And there is often a longer route to productivity than hiring somebody with years of experience. But the businesses that do it well are often thinking beyond the immediate vacancy. They're building future talent pipelines. They're developing skills around their business. And they're creating a workforce that can grow with them over time. The reality is that most businesses cannot absorb unlimited training costs. But equally, if businesses stop hiring potential altogether, where will future experience come from? For employers willing to take a longer-term view, the support available today means investing in young talent can make far more commercial sense than many realise. And for many businesses, it may also be one of the most effective ways to build the workforce they'll need in the future.
Finally, I would make one personal request……
If you have an opportunity to offer a young person work experience, even for a few days, please consider doing so. Sometimes all someone needs is their first opportunity. Through my work with local colleges, employers and young people, I've seen first-hand how a small opportunity can change someone's confidence and outlook. Not every work placement will lead to a hire. Not every young person will stay in your industry. But every opportunity helps. someone build experience, develop confidence and take a step closer to employment.
If more businesses can create those opportunities, even on a small scale, we stand a far better chance of helping the next generation build the skills, confidence and experience they'll need for the future.
And that's something we can all play a part in.