Gen Z is finally gaining ground in the labour market, and a new apprenticeship expansion could help thousands more.
Something unexpected is happening in the UK labour market. Despite having weathered some of the toughest economic conditions in recent years, Gen Z is beginning to find its footing.
Employment Hero’s New Jobs Report, with figures drawn from 4,438 businesses and 112,576 employees in the Small to Medium Enterprise (SME) labour market, shows that young workers are now driving the strongest employment gains in the country.
Momentum Is Building Across All Age Groups
The figures show that Gen Z recorded the strongest gains in the workforce, with 8 per cent annual employment growth and 4.3 per cent annual wage growth. But young people aren’t the only ones who’ve seen some form of momentum.
A closer look at the latest data shows where momentum is building now. In November, every generation saw some form of an uplift in employment. Gen Z saw 1.4 per cent employment growth month on month, taking their total uplift to 3.8 per cent over the past quarter. Gen Y rose 1.0 per cent in the past month and 3.1 per cent over the same period, while Gen X grew 1.6 per cent month on month and 3.6 per cent across the quarter. Boomers recorded a 1.3 per cent monthly lift and 1.7 per cent growth across the quarter.
But while older workers may be seeing some buoyancy in employment, Boomers are falling behind all other age groups. Wages paint a similar picture: Boomers have the lowest annual wage growth at just 2.6 per cent and experienced a 2.0 per cent fall in wages over the past month.
A New Apprenticeship Expansion for Young Workers
For a generation often written off too quickly, Gen Z’s resurgence matters. It signals that when young people have access to the right roles, they thrive. And this week’s announcement from the UK Prime Minister suggests even more of them could soon benefit.
In a two-pronged bid to support the almost one million young people currently not in work or education and tackle a decade-long decline in the number of young people taking up apprenticeships, ministers will expand youth apprenticeships by 50,000 places over the next three years. The plan includes removing the 5 per cent apprenticeship levy for under-25s and creating new routes into high-demand fields like AI, hospitality and engineering.
How the Youth Guarantee Fits In
The announcement follows a wider push to strengthen early career pathways through the Government’s Youth Guarantee commitment, which promises new training and work-experience routes for young people who are struggling to enter the labour market. The proposals include expanded work experience placements, additional support for those on Universal Credit and a commitment to create clearer bridges between education and employment. Together, the schemes could strengthen early employment routes, but their impact will hinge on delivery and whether small businesses, where many young people start out, can actually benefit, especially given ongoing hiring constraints among SMEs.
What the New Scheme Means for SMEs
Data from the Department for Business, Energy and Industrial Strategy shows that one in three employees aged 18 to 24 works for an SME. Younger workers are also the group most ready to adopt emerging AI tools. According to the Prince’s Trust and Learning and Work Institute, around 78 per cent expect AI to reshape their careers, yet more than half say they have no access to formal training.
Fully funded apprenticeship training for under-25s could help remove many of the cost and administrative barriers that stop small firms from taking on young workers. The Youth Guarantee, meanwhile, has the potential to deepen local hiring pools in areas where SMEs already struggle to recruit. But the extent of that impact will depend on whether the training is easy for businesses to access and genuinely tailored to the realities of small-team workplaces.
If that momentum holds, it could help reshape the early-career landscape, strengthen local labour markets and give SMEs the steady pipeline of young talent they’ve been missing.ith consequences. In the South and the East, some employers may find themselves fighting harder for staff, while in the North, pressure to pay more to keep them could mount. In the short term, that means considering which side of the split affects businesses most – the hunt for talent or the squeeze on wages.
