‘Policymakers must ease hiring costs and show caution on increasing minimum wage rates to get people into jobs’ – REC

Responding to the Resolution Foundation’s Take a chance on me report, Shazia Ejaz, Director of Campaigns at the Recruitment and Employment Confederation (REC), said:

“We agree with the Resolution Foundation report that policymakers must take their foot off the gas on raising the national minimum wage while the job market for young people remains fragile. Higher pay is vital, but rapid increases are adding to sustained cost pressures, with labour costs crucially rising faster than demand and productivity. That squeeze is already limiting hiring, investment and training, particularly in retail and hospitality, which have long offered a foot on the ladder to work for young people leaving school or university.

“A moderation of recent National Insurance changes would also remove one of the biggest barriers to hiring right now. Employers already face rising costs at the same time as reforms to employment law risk limiting the flexible staffing solutions many rely on. These reduce employers’ ability to respond to demand and make taking on new staff, particularly in entry-level roles, far more difficult.

“We support a fresh look at the apprenticeship levy to ensure it serves people with a wide range of educational backgrounds. There is a strong case for directing more funding towards younger apprentices aged 16-24, while also recognising the valuable role that higher-level apprenticeships can play in certain sectors. The levy system needs a better balance to allow more non university graduates to train given the pressures on limited funds.”