Last month the government launched a youth employment drive. With financial backing of £1
billion, the initiative aims to help create 200,000 jobs for young people and ‘transform’
apprenticeships.
The basis for the change is rooted in figures that show almost a million young people are
currently neither ‘earning or learning’. The initiative comprises financial incentives for
businesses – a £3,000 Youth Jobs Grant and an Apprenticeship Incentive of £2,000 for
every new employee aged 16-24 taken on by an SME – and changes to the existing Growth
and Skills Levy and expanding the Jobs Guarantee to a wider age range (18-24).
Overall, I welcome these measures. Apprenticeships are a fantastic route into work for
young people – my son started his career with an apprenticeship – and anything that can
help drive down youth unemployment is certainly needed.
But while I support what the government is trying to do, and I agree that financial incentives
may help tackle some of the barriers to employing young people, this is only part of the
picture.
The reality, which our HR experts see every day, is that many SME leaders are fearful about
employing people. One reason is the removal of the “two-year rule” under the upcoming
change under the Employee Rights Act 2025, which will see the qualifying period for
protection against unfair dismissal drop from two years to six months at the beginning of
2027.
My view is that businesses should never have relied on this so-called ‘safety blanket’ in the
first place. With the right induction, probation and performance management processes in
place, it simply isn’t needed. And these processes don’t have to be complicated or time
intensive. It’s about setting clear expectations – for the employer and employee – from the
outset, with regular check ins to see whether things are on track. It really is as simple as
that.
Another fear we see among employers is the risk of accusations of discrimination when
managing employee performance. We know that we have a generation of young people in
which mental health issues are prevalent. We also know that we have an increasingly neurodiverse workforce. Uncertainty around how and where performance management fits
in means that employers are losing confidence in managing people.
The impact is that an employer or manager will often say nothing for fear of ‘saying the
wrong thing’ rather than tackle minor performance issues. Then, before they know it, they’re
looking at potential dismissal because something minor has become a serious performance
issue that has gone unchecked.
This creates a vicious cycle and perpetuates the reluctance to take on new people that we
are seeing among SMEs. Knowing how to set up the right HR processes from the start, and
follow them, is crucial to breaking that cycle.
Government financial incentives are a welcome step, but there also needs to be wider
support for SMEs to help them develop and implement robust HR processes. Once
employers see how effective onboarding, inductions and regular performance check-ins de-
risk the process of bringing new people on board, I believe we would see a shift in attitudes
towards employment.
Until that wider support is in place, SMEs may need more than financial incentives alone to
feel truly ready to embrace this opportunity. That’s something I’d love to see the government
address.