Employment Policy

Permanent hiring remains deep in the red despite signs the decline is slowing. The KPMG/REC permanent placements index hit 44.1 in May, still well below the 50 threshold that signals growth. Payrolled employees fell 184,000 year-on-year in December, dragging total employment to 30.2 million. The National Institute of Economic and Social Research projects unemployment averaging 5.4 percent, the highest in more than a decade, driven by a 10.6 percent spike in the cost of hiring entry-level workers after minimum wage and National Insurance changes. Companies are choosing automation over hiring and letting voluntary leavers go unreplaced. Staff availability hit its second-highest level since late 2020, meaning more people are chasing fewer jobs.

The Netherlands achieved the EU's lowest youth unemployment rate at 8.7 percent versus 14 percent in the UK through a "no dead ends" philosophy linking education, work, and training. Youth employment hits 76.5 percent compared to Britain's 52.9 percent thanks to strong vocational training with employer involvement, mandatory career guidance, and age-graded minimum wages that lower hiring costs for younger workers. The system includes targeted subsidies like the Premium Subsidy for Young Workers and an £8.5 billion National Programme Education for transition support. Multiple progression routes between general education, vocational training, and higher education prevent early choices from becoming permanent dead ends. As other countries struggle with youth unemployment and skills mismatches, the Dutch model offers a tested framework for connecting education systems to labour market needs through public-private coordination.