Rising Costs Squeeze Youth Employment in UK Firms, Experts Warn

British companies are struggling to afford hiring young people as a prolonged period of rising costs has squeezed profit margins and disrupted recruitment plans, according to leading business lobby groups testifying before MPs.

Increasing labor expenses, including boosts to the minimum wage and employer's national insurance contributions by the government, have pushed young people to the back of the queue when employers consider new hires, the groups have revealed.

The cost pressures facing UK firms have made them increasingly reluctant to take on the risk of employing less-experienced younger workers, putting a strain on youth employment opportunities across the country.

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"Companies are in a very difficult position, with rising costs eating into their profit margins," said John Longworth, chair of the Independent Business Network. "When you're under that kind of financial pressure, the natural tendency is to be more risk-averse in your hiring decisions."

The warnings from business leaders come as UK firms continue to grapple with a range of economic headwinds, from supply chain disruptions and high inflation to labor shortages in key sectors.

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"Employers want to hire the safest, most experienced candidates they can, and young people unfortunately often get pushed to the back of the line," said Jane Gratton, head of people policy at the British Chambers of Commerce.

The trend has sparked concerns about the long-term impact on youth employment and the development of the next generation of skilled workers, with some experts warning of a potential "lost generation" if the challenges are not addressed.

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"We need to find ways to make it less risky for companies to take on younger, less-experienced workers," Gratton added. "Otherwise, we risk creating a cycle where young people can't get their foot in the door and build the skills they need."