It was warned by many businesses that rising National Insurance Contributions (NICs) and wages would combine with operational costs to make recruitment more difficult.

Those warnings went unheeded, resulting in an estimated 1,012,000 young people aged 16 to 24 years in the UK Not in Education, Employment or Training (NEET).

The Government aims to tackle the problem, but will the measures help businesses enough to make a meaningful impact?

How will the Government tackle youth unemployment?

In response to the rising levels of youth unemployment, the Government has announced 300,000 new work experience and training placements.

The goal is to target a broad range of sectors to ensure that society as a whole can benefit from the scheme rather than targeting specific industries.

While the exact provisions are not yet known, the construction, health and social care and hospitality sectors are explicitly targeted by the scheme.

The 300,000 placements are set to be made up of work experience and Sector-based Work Academy Programmes (SWAPs), so should be adaptable for a range of businesses.

Will these measures help businesses with employee costs?

Unfortunately, many of the concerns raised by businesses surrounding the costs of hiring and retaining staff are unlikely to be impacted by these kinds of schemes.

The Government’s own analysis determined that only four in ten SWAP participants move into sustained work within six months, potentially suggesting that employment ceases once the cost becomes greater for a business.

It is also notable that a scheme designed to assist 300,000 people is unlikely to have a profound effect when youth unemployment is over 1 million, not to mention unemployment rates of other ages.

What measures like this can do is illustrate a way for businesses to rethink employment strategies to ensure that they can continue operating effectively.

Utilising apprenticeships, training schemes, or other work experience programmes could be an effective way of determining the suitability of a person before committing to the expense of fully hiring them.

Being selective with recruitment processes may be necessary as the Employment Rights Act limits unfair dismissal protection to six months from January 2027.

It is also worth businesses outsourcing key operational requirements to free up funds to hire people where they will be of more value.

One key area is with accounting, as utilising an outsourced accountant can save a business money while still keeping it compliant and effective.

Our expert team will happily act as your outsourced accountants, reviewing your finances to create financial forecasts that let you budget with confidence.

We can help you to understand the effects of employment expenses on your accounts so that you know when it is time to hire and when to focus on upskilling the team you already have.

If your business stands to benefit from the Government’s plans to get more young people working, we can help you make the most of it financially.

If you want to determine the right financial approach for employment and outsourcing for you, speak to our team today.