National Insurance cuts won't be enough to get business owners hiring young people
It smacks of a policy designed by people who have never run a business or employed people themselves, writes businessman Simon Wilkinson
On paper, the Government's proposal to reduce National Insurance costs for younger workers sounds like the sort of policy that should help tackle youth unemployment.
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Make younger employees cheaper to hire and employers will create more opportunities. Simple, right?
Sadly, that's not the case. It smacks of a policy designed by people who have never run a business or employed people themselves. A few hundred pounds knocked off an NI bill is not enough to convince SMEs like mine that taking on an unproven young person is a risk worth taking. The real issue is employer fears about the latest round of employment laws.
As someone who employs around 50 people in the North East, a region that continues to struggle with some of the highest levels of unemployment and youth unemployment in the country, I can say with confidence that National Insurance is not what keeps most employers awake at night when considering new hires.
Over the past few years, employing people has become an increasingly complicated and expensive commitment. Businesses face growing compliance requirements, the prospect of costly disputes and a regulatory environment that often seems to assume employers are the problem rather than the solution.
When businesses hire an experienced worker, they often contribute immediately. Hiring a young person is different, it is a long-term investment requiring months of training, mentoring and support before they become fully productive.
Many employers are willing to make that investment - we certainly are. I work closely with horticultural colleges and training providers to help ensure students leave education career-ready for roles in landscaping and horticulture. There is no shortage of talented young people coming through the system, and our industry depends on a steady flow of skilled young talent.
The problem is that too many employers are becoming reluctant to take the risk of giving them their first opportunity. Many business owners worry about taking a chance on a young person who, for whatever reason, turns out not to be the right fit. They fear being locked into a lengthy, costly and time-consuming process before they can get their team back on track.
That confidence is disappearing, and a modest reduction in National Insurance contributions does little to offset concerns about the potential costs of getting recruitment decisions wrong. It does nothing to address the legal uncertainty that dominates conversations I have with fellow business owners about hiring young people.
The result is fewer entry-level opportunities and fewer chances for young people to gain the experience they need. The frustrating thing is that this is entirely avoidable because the issue is not cost, but risk.
Until ministers acknowledge that reality, youth unemployment will remain stubbornly high regardless of how many headline-grabbing incentives are introduced.
Politicians often talk about economic barriers to employment, but employment barriers are becoming just as important. If we genuinely want more young people in work, the Government should be prepared to review and, where appropriate, relax regulations that discourage firms from hiring people with little or no experience.
It may be politically difficult, but it is a pragmatic step if we are serious about creating opportunities for young people.
Every skilled worker starts as an inexperienced young person looking for a first opportunity. There is no shortage of talent and there is no shortage of ambition. What we are short of is employer confidence.
If ministers genuinely want to help young people into work, they must stop tinkering around the edges and start addressing the risks employers face when hiring. Until businesses feel able to take a chance on young people again, we risk losing a generation of talent before their careers have even begun.
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Simon Wilkinson is Managing Director of Wilkinsons Landscapes.
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