Business · Economy · 4 hrs ago
Rising employment costs threaten UK job opportunities for young people
A survey of 682 UK firms found that rising employment costs and regulation are making businesses less confident about hiring.
Only 15% said they were confident about hiring, down from 24% in 2025.
Some 44% said recruitment and onboarding costs were pushing them towards experienced workers, reducing entry-level opportunities for young people.
More than half said wider cost pressures meant they were offering fewer apprenticeships than they wanted.
The findings come as 981,000 people aged 16 to 24 in the UK were not in education, employment or training between April and June.
That figure was 30,000 lower than in the previous three months but 30,000 higher than a year earlier.
The CBI is urging the Government to use the upcoming autumn Budget to give businesses more certainty about costs and support hiring.
Another survey found that 28% of small employers would hire more staff if small business rate relief were expanded.
A Confederation of British Industry survey found rising employment costs are putting pressure on UK firms’ ability to hire and create training opportunities, particularly for young people.
Among 682 firms surveyed, 73% said employment costs were the biggest threat to the UK labour market’s competitiveness, while 15% were confident about hiring.
Some 44% of surveyed companies said recruitment and onboarding costs were pushing them towards experienced workers and reducing entry-level openings.
The survey also found that 53% of firms were offering fewer apprenticeships than they wanted because of wider cost pressures.
An estimated 981,000 people aged 16 to 24 in the UK were not in education, employment or training between April and June.
- Who
- UK firms, with young people particularly affected.
- What
- Rising employment costs are threatening hiring and training opportunities, including entry-level jobs and apprenticeships.
- When
- The CBI survey was conducted between August and September 2026. The article was published on October 12, 2026.
- Where
- The United Kingdom.
- Why
- Firms said employment costs, regulations and wider cost pressures were making them more cautious about hiring and investment.
This story does not have two clearly opposing sides.
An estimated 981,000 people aged 16 to 24 in the UK were not in education, employment or training.
The CBI surveyed 682 firms about employment costs and hiring confidence.
The FSB surveyed 1,033 small business owners and sole traders.
The Evening Standard published its report on the survey findings.
- Firms naming employment costs as the biggest threat
- 73%
- Firms confident about hiring
- 15% of 682 surveyed
- Companies pushed towards experienced hires by recruitment and onboarding costs
- 44%
- Firms offering fewer apprenticeships than they wanted
- 53%
- Young people aged 16 to 24 not in education, employment or training
- 981,000
- Small business owners and sole traders surveyed by the FSB
- 1,033
What people are saying
Higher employment costs and growing regulatory pressures are making firms more cautious about hiring and investment.
That matters not just for businesses, but for living standards and particularly for young people trying to get their first foot on the career ladder.
Businesses want to invest in their people and build the skills they need for the future, but confidence remains fragile.
Small businesses across the UK are up against huge and persistent cost rises that are seeing so many struggle with running their business, let alone investing and expanding.
Sources
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