Rising unemployment hitting the prospects of young people

Responding to today’s ONS labour market figures, James Cockett, senior labour market economist for the CIPD, the professional body for HR and people development, comments:

“Unemployment has risen further and young people are bearing the brunt, with the unemployment rate among 18-24 year olds reaching its highest level since 2020. This is ahead of the significant uplift to the youth minimum wage rates, set to come into effect from April, further raising the costs of employing young people. 

“It’s necessary for the Government to take greater action to support young people in securing training and employment opportunities. It can do this by introducing an Apprenticeship Guarantee for 16 to 24-year-olds, which is overwhelmingly supported by employers.  

“While vacancies have slightly risen, redundancies remain high, highlighting the pressures employers currently face in a tough economic environment. It’s expected that the introduction of Employment Rights Act measures will further increase employment costs, adding to the subdued mood among employers. 
 
“It’s vital that Government acts to mitigate against the unintended consequences of the reforms, such as a rise in temporary employment, by undertaking meaningful consultation with businesses and where necessary compromising on key measures still to be decided in secondary legislation.  

“To support smaller businesses, the backbone of the economy, we need to see a major communication campaign from Government, to ensure they aware of, understand and can prepare for the new legal obligations prior to them coming in to effect.”

The CIPD released its latest Labour Market Outlook yesterday, a quarterly survey of 2000+ UK employers hiring, pay, and redundancy plans. It found that: 

• Overall hiring intentions remain at their lowest level on record outside the first year of the pandemic. 
• Three in four employers (74%) expect the Act to increase employment costs.
• More than a third (37%) of employers plan to reduce the recruitment of permanent staff due to at least one or more of the key reforms.
• More than half (55%) of employers expect workplace conflict to increase due to at least one or more of the key reforms.

Cockett continues: “Ahead of anticipated rise in conflict, the Government needs to ensure that Acas and the wider dispute resolution system have sufficient resources to help micro and small firms comply and avoid disputes and costly tribunal claims.”