A sharp decline in entry-level jobs across the UK is worsening the youth unemployment crisis, according to retail industry leaders and employment experts. The warning comes as a government-backed review is expected to conclude that ministers have failed to properly address the growing number of young people who are not in education, employment or training (Neet).
Lord Wolfson, chief executive of clothing and homeware retailer Next, said the company is now witnessing far more competition for basic shop-floor roles than in previous years. He revealed that the number of applicants for each retail vacancy has nearly doubled compared with two years ago.
“That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment,” he told the BBC.
Retail sector under pressure
Wolfson said rising business costs and changing technology are making companies more cautious about hiring. He criticised the increase in employer national insurance contributions and higher minimum wages, arguing that these measures are making it harder for businesses to create new jobs.
He also warned that upcoming changes under the Employment Rights Act could affect hiring flexibility in sectors like retail. The law will require employers to offer guaranteed hours to workers who regularly work fixed patterns instead of relying on zero-hours contracts. While supporting limits on zero-hours contracts in many industries, Wolfson said retail businesses face different challenges. “The risk is you then have to contract for those hours forever,” he said.
Next has also reduced staffing in stores as online sales continue to rise. Technology is playing a bigger role in daily operations, with systems like self-service return lockers replacing some traditional customer service jobs.
Experts say automation and artificial intelligence are particularly threatening entry-level positions, which have historically helped young people gain their first work experience.
Government faces criticism
Alan Milburn, who is leading the government review into youth unemployment, is expected to say ministers have relied on scattered employment schemes instead of creating a long-term national strategy. The report is also likely to call for major reforms to health and disability benefits as part of a broader “system reset”.
More than one million people in Britain currently work on zero-hours contracts, especially in sectors such as hospitality, retail, warehouses and healthcare. Trade unions argue that many workers remain trapped in insecure employment for years despite working regular hours.
The government defended its economic policies, saying raising the national minimum wage has benefited more than 200,000 young workers. Officials also pointed out that employers pay lower national insurance contributions when hiring workers under the age of 21.
Employment experts, however, said the current labour market is especially difficult for young people. Alice Martin, head of research at the Work Foundation at Lancaster University, said many are struggling to find stable work as vacancies continue to shrink.
“Young people are entering one of the toughest labour markets in years, facing intense competition for a shrinking number of entry-level jobs,” she told BBC. She added that weakening worker protections would not solve the problem, arguing that reforms targeting insecure employment are necessary and overdue.
Wolfson said the broader solution lies in improving the overall economy. “Youth unemployment is really a symptom of wider problems with employment in the economy, and of course, if you’ve got fewer jobs, the people who suffer most are the people with the least experience and that is the youngest,” he said.