Rising costs put investment in future talent at risk, businesses warn

• New report examines the impact rising costs and recruitment pressures on early talent attraction. 
• 71% say rising costs now limit their ability to invest in education outreach with young people – up sharply from 50% last year. 
• Work experience opportunities remain critical to skills development and employment prospects amid a fast-shrinking job market. 

The new report, from The Careers & Enterprise Company (CEC), the national body for careers education, which draws on data from more than 750 businesses measuring their engagement with schools and colleges, finds that economic pressures are increasingly shaping their school engagement. More than seven in ten employers (71%) say rising costs now limit their ability to invest in outreach with young people – up sharply from 50% last year.  

At the same time, businesses are under growing pressure to find and retain skilled workers. And with fewer vacancies available, businesses face a more competitive hiring market in which upskilling and early engagement are critical to ensuring candidate pipelines remain fit for purpose. Vacancies for entry-level roles have dropped to a five-year low as companies turn to automation to fill junior positions amid rising cost pressures. 

CEC’s report finds that 59% of businesses view work experience as too time-consuming to deliver, and three-quarters say they would offer more opportunities to young people if working with schools were easier. The Government is seeking to remedy access to work placement activities through a new work experience guarantee for all young people, trailed in new Statutory Guidance in May 2025.   

Despite these challenges, the report shows that businesses that continue to engage with schools see clear, measurable business benefits – particularly when outreach is structured and aligned with long-term workforce needs.  

The report finds: 

• Businesses offering any form of workplace experience are 77% more likely to report benefits than those that offer none.  
• Businesses that help young people understand how essential skills are valued at work are more than twice as likely to report reduced recruitment costs. 
• Employers who maintain a consistent engagement strategy are 56% more likely to report bringing apprentices into the business.

77% are more likely to report that young people become more work ready as a result of their engagement. 

Employer Standards analysis reveals that health, construction and creative sectors lead the way on the quality of their education outreach. Student-led data revealed that these sectors feature as top career choices among a third of a million secondary school children surveyed last year.  

John Yarham, Chief Executive, The Careers & Enterprise Company, said:

“Whilst employers are operating in an increasingly tough economic environment, we can see the advantages gained by those working with the next generation. The evidence is clear: businesses that engage in meaningful, well-structured career outreach are more likely to see stronger recruitment, reduced costs, and a more highly skilled talent pipeline. 

“Our latest report shows that businesses who want to future-proof their workforce must look beyond immediate recruitment pressures. Tomorrow’s talent is sitting in classrooms today, and sustained engagement with schools and colleges builds the skills, confidence and diversity businesses will need in the years ahead.” 

Patrick Milnes, Head of Policy, British Chambers of Commerce, said:

“Businesses are under pressure from rising costs, persistent skills gaps and ongoing uncertainty, and many are being forced to make difficult short-term decisions. The government needs to give businesses the confidence to invest and prevent them from pulling back on skills development and early talent. 

“If firms want to future-proof themselves, they need to strengthen their talent pipelines now. That means better preparing young people for the world of work and upskilling the workforce for the future. Sustained engagement with schools and colleges is essential to future-proofing businesses and the wider economy.” 

Ian Browne, Early Careers and Youth Skills Lead at Lloyds Banking Group, said: 
“When we set up our outreach programmes, creating scale was a key priority. As they’ve grown – now reaching more than 100,000 students each year – our focus is now on value, quality and impact. 

CEC’s Employer Standards play an important role in helping us evaluate what’s working well and ensure our engagement is genuinely supporting young people to develop the skills employers value.”