Some ideas to help small businesses hire young people

The ONS reported three weeks ago that almost one in seven, or just over 1 million young people (16 to 24 year olds) are not in employment, education or training. This is no trivial matter – the trend is very much established and this is just the latest point of pain for our emerging generation. Of course, as soon as the media blew the horn on the story, politicians pumped up on their podium of eternal promise, posturing with whatever angle suited their party. The always sincere and not opportunistic at all Nigel Farage was quick off the mark to blame the government’s lack of focus. We won’t mention that the focus on Brexit and British isolationism has delivered just 1.3% per annum of real GDP growth since 2016.

Political irritations aside, in this post I consider the small businesses we talk to at equipal, day in – day out, and I discuss some ideas I believe will help small companies, like ours, and our customers, to hire more young people.

Why this matters:

Youth unemployment started to grow in 2022 once the government reigned in public spending after £350 billion of (often wasteful) pandemic spending but it was really 2024 and 2025 when the spike took off. Leaving aside the longer term damage to our economy, unsurprisingly the very worst impact of youth unemployment lands squarely on the young. It’s utterly devasting to those late teens and 20 somethings who are abandoned on the sideline, who often go on to suffer mental health issues while stuck at home, and develop anxiety glued to devices waiting for that illusive interview, all while watching their friends surge forward in life.

These lost souls will find it hard to catch up in later years even if they do eventually land a job and progress in a field.. and as those months slip into years, that becomes a bigger ‘if’. But it’s also bad for the broader economy and there are no shortage of sinister effects on society. And it’s bad for business because it means less maturing talent for the future. Just ask Ireland who suffered huge unemployment in the early to mid 2010’s, then had a strong economic rebound and is now plagued by a chronic shortage of talent with many thousands of skilled architects, doctors, engineers, electricians and lawyers having emigrated.

Academic Research from the university of Birmingham by Dr Gianni De Fraja, Dr Sara Lemos and Dr James Rockey showed that for each month of idleness a young person suffers between age 18 and age 20, they experience permanent income loss of 1.2% over the rest of their life.

So while politicians waffle on about their initiatives, hoisting themselves up their flagpole with all the hubris of a shabby suit salesman, and while others cynically engage in the blame game, young people are just left out in the cold (sometimes quite literally as they struggle with the heating bill!). This sad state of affairs just isn’t good enough but in this blog post I will try to be constructive. l list four clear, achievable and cost-neutral changes that should help the economy, small businesses (including ours!) but most of all, would help our youth who we all surely accept, deserve better.

Idea 1: We need a framework and policy that normalises trial employment. Small businesses are generally keen to get more hands on deck to drive activity, fill gaps or support projects. In some cases, an initial junior role, apprenticeship or graduate role will become a long-term role at a company. Sometimes the junior won’t progress. Regardless, both sides benefit and the young person leaves with experience better equipped to seek the right path for them (and perhaps, with a few pounds in their pocket). There’s nothing wrong with “It’s not for me” and there’s nothing wrong “this might not be the the path for you” but with employment lawyers always too keen to anchor a case in discrimination or some other nefarious (however dubious) act, employers are nervous to hire. Net effect: much less fluidity in speculative hiring of young people. If we had a simple carve out of [just some!] of the more arduous obligations of UK employment law for small businesses, then many thousands of young people would be offered temporary roles. In France, 12 month internships feature heavily across industry and the professions industry for this reason and it’s time the UK also took a bite from the french Viennoiserie!

Idea 2: Remove the burden of ‘Right to work’ checks and other obligations from small business employers where there is a capability gap. Let’s be honest, the government has a habit of asking employers to do it’s hard work. We must set up private pension plans for employees, we are often responsible for health and safety training even if hiring experienced workers, we must collect their student loan repayments on behalf of the government, we must subtract child maintenance payments.. the list goes on, and on, and on.Are we actually compensated for the administrative effort or time associated with any of this? Ha! Not a hope. One responsibility, that could and should be placed squarely at the government is the checking of an employee’s right of work. Why are small businesses spending thousands and wasting hundreds of hours on the administrative burden of hiring people who may have come to the UK as a child or teenager. Why can’t ‘right to work’ be established simply from an NI number via payroll software.

Idea 3: Stop raising the blasted minimum wage. The government needs to realise that the minimum wage isn’t a panacea to all political problems. Relentlessly increasing the minimum wage drives inflation and unemployment because labour is often the the highest cost for services and margin thin businesses. If £2,000 or £2,500 a month, after tax, isn’t enough to live on for entry level employees, it’s because housing is far too scarce and expensive or because transport infrastructure is crap or because nurseries have to pay far too much for insurance.. PLEASE focus on roots of the problem. Stop increasing the minimum wage and stop hammering employers. Consider the below graph detailing the growth in employment costs for employers with staff on the minimum wage.

Idea 4: Let’s ban dodgy colleges and education providers offering ‘fluff’ courses to desperate, manipulated young people.

An advanced diploma in social media hegemony. A certificate in NFT art. A degree in gaming psychology.

Education is an enormous part of our economy, and covers everything from vital early years education to elite level university education. But you would be amazed how big the higher education college sector is, how much money is spent on poorly performing universities and how much is lost at dodgy institutes for ‘lifelong learning’. According to online sources, it comes in at about £40 billion! This is an insane amount of money. For context, it’s about the market size for small business asset finance. But that’s not the problem here. The problem is how many graduates of these further education colleges never find reliable, fairly renumerated employment on the back of their education.

Let’s do our young people a favour, and where an education provider is unable to demonstrate positive outcomes for graduates, we should either prohibit, aggressively tax or impose a cigarette level warnings on dodgy course offerings.

Final ask: Students and small business employers need real practical support. Stop scapegoating technology!

Despite all the hysteria, all the ignorance and all the grumblings of commentators, self-publicists and luddites, the growth in youth employment does not principally arise from ai and automation. Technology enables efficiency for mundane tasks, increases productivity and creates wealth to be spent in other areas. Employees will adapt. Ergo, this is not the problem! Yes, there are less jobs at the supermarket till but there are more staff managing picking food for deliveries, building and testing algorithms that drive recommended shopping lists and driver routes..

Closing words:

We owe it to our young people to do better. The boomer generation and Gen X have done so well from gold plated pensions and a huge property boom. This has come at the expense of affordability for the young, and a crowding out effect in the economy. Under 40’s have had a rough ride, and it’s looking even tougher for Gen Z and below. Many hard changes are required but let’s at least try our best to give young citizens a fair crack. As a father, and the head of a small business, it’s a priority for me.