Reports about high youth unemployment sit alongside surveys showing persistent skills shortages. Robin Adda looks at how we can solve the conundrum where young people can’t find work and employers can’t find talent.

The latest report from Skills England paints a worrying picture of the UK labour market. Employers continue to report persistent skills shortages across key sectors, with demand for priority roles expected to grow significantly over the next decade.

This comes at a time when a new major report shows how youth unemployment has risen to its highest level in a decade, with more than one million young people now not in education, employment or training (Neet).

On the surface, these may appear to be two separate issues. In reality, they are intrinsically connected. The solution to both lies in how we identify, develop and invest in skills.

AI will continue to dominate headlines as a key driver behind this and so it should. It is reshaping the workplace at an unprecedented pace. But it is not the whole story.

The bigger issue is that many organisations have become focused on immediate productivity rather than laying the foundations. With rising costs and economic uncertainty, it’s easy to go down this route – consequently, businesses are investing less in the pipeline, while many traditional entry-level opportunities continue to disappear.

Government initiatives such as those outlined in the Skills England report (the Growth and Skills Levy and Youth Guarantee) are positive steps, but they cannot solve this challenge alone.

Employers are still the biggest influence on how talent enters and progresses through the workforce, meaning businesses must play their part.

Here are some areas where businesses can make a tangible difference to their own skills gaps, and the unemployment issue – youth and beyond.

Hire for potential, not just experience

One of the biggest barriers facing young people today is the expectation that they arrive already equipped – the never-ending cycle of needing experience to get a job and needing a job to get experience.

Employers should place greater emphasis on transferable skills such as curiosity and the ability to learn. Technical skills can often be taught, and many will carve out specialisms in time, but qualities such as resilience, communication, problem-solving and adaptability are increasingly valuable in a workplace shaped by constant change.

So with this, companies should think outside the box when building their hiring process – a CV should not be the sole measure of potential, especially for entry-level roles.

Think of incorporating more unique interview processes, such as live tasks that test problem-solving and attitude – allowing you to uncover the qualities that can’t just be AI’d onto a CV.

Rethink pathways into work

Many traditional routes into employment were designed for a very different labour market.

Apprenticeships, internships, graduate schemes and work experience programmes remain important, but they need to evolve alongside employer needs and candidate expectations.

Encouragingly, some organisations are already recognising this. Marks & Spencer recently announced plans to create 1,000 paid traineeships for 16- to 24-year-olds across the UK and Ireland, offering structured training, paid experience and clear progression opportunities without requiring a degree.

Of course, not all have the resources of M&S, but this type of programme is scalable and mouldable. This means any business can create visible pathways into work, help young people gain confidence and experience, while developing talent aligned to their future needs.

Help candidates make skills visible

One of the most overlooked challenges in recruitment is that valuable skills often go unrecognised.

Young people develop desirable capabilities in countless ways, yet often struggle to articulate them in a way that employers can easily identify.

Skills England’s Youth Employability Summit found that employers consistently value skills such as communication, resilience, teamwork and problem-solving, but that these frequently go unrecognised.

The result is that potential is overlooked, opportunities are missed, and the gap gets wider.

Businesses need to move beyond relying solely on qualifications, job titles and years of experience as indicators of capability. Instead, they should help candidates identify and communicate these transferable skills.

Creating a common language around this enables companies to make better hiring decisions. One way to achieve this is by embedding key skills-based questions into the initial application process, so businesses can uncover valuable potential that may otherwise be hidden behind a CV.

When organisations become more effective at recognising skills during the screening stage, everyone benefits – and businesses reduce the risk of overlooking high-potential candidates simply because they lack traditional work experience on paper.

The days of learning a role once and relying on those skills for an entire career are over, and AI alone is changing job requirements faster than many organisations can keep pace with.

Forward-thinking employers are moving away from one-size-fits-all training models and towards continuous, personalised learning cultures.

Skills mapping, personalised development plans and targeted training programmes can help individuals adapt while ensuring organisations remain resilient in the face of change.

Most importantly, organisations need to stop viewing skills development as a cost and start viewing it as an investment, as it could be cheaper in the long run versus outsourcing work to expensive specialists.

Invest in talent now

Skills shortages and youth unemployment are often discussed as separate challenges. They are not.

Closing that gap will of course require government support, education reform and economic growth. But it will also need employers to recognise the role they have to play – and to be bold in their commitment to entry-level talent.

The M&S programme demonstrates that there are organisations already willing to invest in young people and more businesses need to follow suit.

Investing in AI is important – but there needs to be balance. In this climate, it will take bravery, innovation and long-term thinking from business leaders to take a step back from AI and rebuild the pathways that connect young people to opportunity.

The organisations that succeed over the next decade will not be those that simply adopt the latest technology. They will be the ones that continue to invest in people from the ground up and, at the moment, that’s what’s missing.

 

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