Companies risk ‘kicking rungs off the ladder’ by ignoring plight of young

Mental health issues, a lack of opportunities and the upfront costs of starting a job are preventing young people back from starting their careers – and this poses a real long-term risk for business

Young Person Being Interviewed For Job

Despite starting her search earlier than most of her peers, Lucy Yarrow (24) struggled to find a graduate job after completing her degree in modern languages at Royal Holloway, University of London.

All in all, Yarrow applied for 110 graduate and entry-level jobs between entering her final year of studying in September 2022 and beginning her current role as project coordinator apprentice at Virgin Media O2 in December 2023.

“At the beginning, I felt hurt by every rejection,” Yarrow says. “It can take a long time to get into the mindset that rejections are to be expected. There are a lot of people applying for these roles, it’s very competitive.”

While the cut-throat nature of the post-university job hunt is nothing new, the scale of the challenge facing new entrants to the job market is greater than it has been in years. This has contributed to a marked increase in the number of people aged 16 to 24 who are economically inactive and, without the flow of young people into the workforce, many businesses may see their talent pipelines run dry.

Are young people really workshy?

Shadow work secretary Liz Kendall recently highlighted the importance of supporting more young people into work and, in a message to the growing number of under-24s not in education or employment, said there “will be no option of a life on benefits” under a Labour government.

According to the Office for National Statistics, 851,000 16- to 24-year-olds are classified as NEET (not in employment, education or training). Although this is 20,000 higher than during the same period in 2022 and accounts for 12% of all people in this age group, the data does not support the idea that the country’s youth are happy to live a life on benefits. Simply labelling this generation as workshy overlooks the many barriers young people now face when entering the world of work.

Firstly, there are fewer options available to young people. On recruitment platform Indeed the number of entry-level roles and jobs that do not ask for prior experience has been on a gradual decline since peaking in August 2022. In addition, a third of young job-seekers admitted to having been rejected from an entry-level position because of a lack of experience, according to a recent study by Virgin Media O2.

“There’s a real lack of transparency,” says Yarrow. “I’ve seen some entry-level roles with experience requirements of three to five years. That doesn’t seem like an entry-level role to me.”

The youngest generation are also facing a mental health crisis that’s impacting their engagement in the workforce. A survey from the Resolution Foundation found that young people now have the poorest mental health of any age group – a complete reversal of the findings two decades ago when they had the lowest incidence of mental disorders across all ages. 

A survey of more than 2,000 16- to 25-year-olds for The Prince’s Trust NatWest Youth Index 2024 revealed that 40% had experienced a mental health problem, with one in five saying their mental health has declined in the past year. One of the young people interviewed for the survey, who had found himself out of work for four years before securing a job as a sales assistant at Marks & Spencer, described feeling “very lost in life”. “The longer I was out of work, the harder it felt to go back into it,” he added.

Our fear is that we’re seeing a number of different problems hitting at the same time

As a consequence, one in 20 18- to 24-year-olds (excluding full-time students) now report being economically inactive due to ill health. Long-term unemployment is also at its highest level among 18- to 24-year-olds since early 2022. 

At the same time, young people are faced with an acute rise in the cost of living, which is having a direct impact on their ability to accept job opportunities. The same Prince’s Trust survey found that 5% of young people had turned down a job because they couldn’t afford the associated costs, such as transport, uniform or rent. 

“There likely isn’t one single cause, but our fear is that we’re seeing a number of different problems hitting at the same time,” says Tony Wilson, director of the Institute of Employment Studies (IES). 

He cites the decline in young people’s health and wellbeing since the pandemic, a significant drop in the number of young people enrolling in further education and a lack of support from careers services. “You put this all together,” he adds, “and we see the resultant upward trend in young people out of education or employment from 2022 onwards, with signs that people are spending longer out of work now as these issues persist.”

Without creating more opportunities, there is a risk that businesses will “kick away some of the rungs on the ladder” for young people to start their careers, he says. 

How employers can support young people

Engagement from employers is necessary to help turn around these worrying trends. “It’s not enough to just advertise the job and say you would welcome applications from young people,” Wilson says. Companies need to offer more flexibility and support to young applicants, he says, whether that be with wellbeing, travel or skills.

Karen Handley is head of future careers at Virgin Media O2, which incorporates the company’s apprenticeship, graduate, work experience and entry-level career programmes. She believes more businesses should focus on potential when looking to attract early talent.

If businesses want to continue to grow and thrive, they need to think differently about how to unlock talent

“We don’t ask for CVs or prior work experience because, in our view, as long as you’ve got the right potential, the business can teach you the relevant skills once you’re in the job,” she says. 

This requires recruiters to look for different aptitudes during the application process, rather than just scanning through CVs. At Virgin Media O2, an individual’s skills, motivation and strengths take precedence over prior achievements. “That ensures that we widen the talent pool and it opens up opportunities to many more candidates,” Handley adds.

Adam Grant, general manager for Mars Wrigley UK, has become aware of the difficulties faced by young people through his mentoring work with the charities ORT and Psalt, which help support young and under-represented talent in the early stages of their careers.

“It’s important to recognise that young people are facing a mountain of challenges from the moment they begin to think about applying for jobs, to their first day,” he says. “If businesses want to continue to grow and thrive, they need to think differently about how to unlock talent and consider carefully where the business needs to adapt.”

Grant stresses the importance of developing strong talent pipelines that begin with entry-level roles. “We really invest in our early talent and the contribution they make to the UK business, in the knowledge that they will grow, develop and hopefully have the potential to become the future leaders within our business.”

Setting out a clear pathway for progression has helped Mars UK to increase its average employee tenure to 12 years. Around 80% of its apprentices stay with the company following the completion of their qualification.

Improving starter pay

Smaller companies are also reassessing their employee offering in a bid to encourage young people into work. Harriet Knight and Hannah Penn, joint managing directors of London advertising agency Pablo, regard the recruitment of top-tier entry-level talent as “absolutely paramount” to the success of their business. 

They identified low average starting salaries as one of the main barriers for young people looking to start a career in advertising. Knight believes that the fact entry-level wages have barely increased since she started her career 15 years ago is “frankly a bit disgraceful”.

“We’ve sat on calls with young people who are wearing three layers of clothes because they can’t afford to put their heating on and who have shared concerns about being able to afford to travel into the office,” she adds.

In recognition of this issue, Penn and Knight took the decision to raise all new-starter salaries to £30,000 and give pay rises to Pablo’s lowest earners – representing 9% of the total workforce. 

Penn says that several members of staff burst into tears when they were told the news. “When rent takes up half your pay and you’re constantly in your overdraft, that extra £100 in your bank account each month gives you the chance to live, rather than just survive.”

While they don’t see salary as the only way to ensure businesses attract young talent, it’s part of a “course correction”. “Although the financial element will relieve some of the stress and pressure they’re feeling, it needs to come alongside creating a culture where people feel valued and supported,” Knight adds.

What businesses stand to gain

The imperative for businesses to support the next generation of workers is clear for Handly. “Whatever age someone is, they bring a fresh perspective with them when they come into an organisation. Different generational age perspectives are vital,” she says.

As the UK adapts to the consequences of an ageing population, identifying young talent now will stand businesses in good stead. “We’re looking to bring in skills that we need for the future,” Handly adds. “It’s very hard to continually replace people through external hiring as your workforce enters retirement, so we’re investing in future talent now.” 

Similarly, in creative industries such as advertising, having a generationally diverse workforce can provide a competitive advantage. Knight says: “The long-tail implication of not having a diverse talent base is that our work will suffer. If you don’t have people within your organisation that bring different perspectives and can authentically tell those stories for brands, the business will struggle to be successful.”

By planting the seeds early, companies can fill current skills gaps and help to nurture talent to become future leaders. At a time when the youngest generations are facing a multitude of challenges when entering the workforce, it is up to businesses to support this crucial point at the start of their careers.