Marvin OnumonuThe British Chambers of Commerce (BCC) has called for urgent action from the Government to tackle rising youth unemployment, or risk a “lost generation.”
The group said close to a million young people are currently locked out of work, education and society.
The BCC’s People and Work Challenge Group published a report with recommendations to help Generation Z get jobs, including more Government backing to help young people into work, supporting small to medium enterprises (SMEs) to hire and train them, and better workplace health support.
BCC said ministers should set a target to bring the number of young people not in employment, education or training (NEETs) down to levels of the Netherlands.
The report found solving the NEET issue could boost UK output by £69bn.
It advised the Government to coordinate its work across different departments because the problem could get worse soon.
BCC also pushed firms to open more roles to under-25s, as only 13% had recruitment, training or retention plans for this age group.
SMEs were said to be missing out on the benefits of hiring young staff.
Office for National Statistics (ONS) data showed NEET numbers rose by over 110,000 between the end of 2023 and 2024.
From October to December 2024, there were 987,000 NEETs, split between 392,000 unemployed and 595,000 classed as economically inactive.
Additionally, research from the Kings Trust found one in four NEETs wanted to work but could not because of mental health issues.
Over half (52%) said the longer they were unemployed, the harder it was to find work, and nearly half (45%) said they lost confidence in their skills due to being out of work.
Shevaun Haviland, director general of the British Chambers of Commerce, said: “The UK’s active workforce is rapidly ageing, while the number of young people who are not in employment, education or training is at its highest level for a decade.
“Generation Z face a double whammy of increasing barriers to entering the workforce, and reducing opportunities as the number of vacancies continues to fall.
“But research shows the longer we leave this pool of talent to drift away from the workplace the harder it becomes for them to engage.”
Haviland added: “The government has recognised the issue, with schemes such as the Youth Guarantee and its post-16 strategy, but a more collaborative approach is needed across different departments to deliver the change needed.
“Employers recognise that they also need to step up to the plate. But the rising tide of cost pressures from the Employment Rights Bill, rising National Insurance Contributions and the National Living Wage, are making this increasingly difficult.
“Government must support SMEs to take on more young people and train them for the jobs of the future.”
She said: “Chambers are already playing a role by bringing businesses and education bodies together to fix the disconnect.
“But unless more comprehensive action is taken a whole generation is at risk of being cut loose from society.”
