Responding to the latest Office for National Statistics (ONS) labour market data, James Cockett, senior labour market economist at the CIPD, warned that rising employment costs — driven by higher National Insurance contributions and minimum wage increases — risk discouraging employers from hiring young workers.
Vacancies have fallen to their lowest level since early 2015, with notable declines in hospitality and retail over the past year. These sectors, Cockett said, are vital entry points for young people starting their careers.
“The government needs to go further than the youth guarantee and introduce an apprenticeship guarantee for all 16 to 24-year-olds, to provide valuable opportunities to both learn and earn,” Cockett said.
“Better training and employment opportunities will ensure young people start their working lives on the right foot while helping employers build future talent pipelines.”
The ONS data also shows that pay growth remains high, particularly in hospitality and retail — the same sectors most affected by rising employment costs. However, real wage growth has now fallen to its lowest level in two years, with inflation eroding much of the headline pay increases.
Cockett said an apprenticeship guarantee could support both sides of the labour market by offering young people stable employment and training, while giving employers access to a pipeline of skilled staff at a time when vacancies are shrinking.
Amy Ingham
Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College's journalism school. Her recent reporting includes British Steel's nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.
