Mid-market could unlock new jobs for NEETs but rising costs threaten recruitment plans
Mid-market could unlock new jobs for NEETs but rising costs threaten recruitment plans
- Strong entry-level hiring intentions amongst UK mid-market at risk as rising employment costs and skills shortages continue to bite
- Businesses cite a gap in soft skills as a bigger barrier to recruitment than technical skills
- Mid-market firms want to see more government support around wider cost pressures to increase investment in hiring and incentivise hiring of young people
The UK’s mid-market businesses could provide the vital routes to employment young people need, according to new research from accountancy and advisory firm BDO LLP, but heightened business costs and skills barriers risk derailing those opportunities.
According to BDO’s bi-monthly Mid-Market Tracker, a survey of 500 businesses with revenues between £10m and £500m, four in five businesses (83%) are hiring for entry level roles within the next six months. Within that number, over a third (36%) are hiring for permanent entry-level positions that do not require a degree with a similar number (32%) planning to recruit entry-level graduates.
Despite comprising less than 1% of private sector businesses, the UK mid-market accounts for more than one in three private sector jobs, employing 11.1m people according to separate research from BDO.
The number of NEETs in the UK now tops 1 million.1 With the mid-market growing revenues by 3.1% over the last year and outperforming the FTSE, it is well placed to provide job opportunities.
However, nearly two in five businesses (38%) say higher employment costs and labour or skills shortages are one of their top challenges facing their business over the next six months and around a fifth (18%) are pivoting to hiring contractors, freelancers or consultants rather than permanent employees, potentially threatening the number of secure opportunities available for young people.
Although employment costs are reported as the main barrier to hiring, the majority (87%) of businesses identified a specific gap in soft skills such as problem-solving, reliability, communication and relationship-building, compared with just over a third (35%) citing a lack of technical or industry-specific skills.
Businesses are calling on government support to stave off the threat of further hiring cuts and ensure a strong pipeline of entry-level roles. Support with wider cost pressures would help a fifth of business leaders to invest more in recruitment (19%). Other measures called for to help tackle these pressures include better incentives for hiring young people (41%) and more training and education to support the transition from school to employment (38%).
Richard Austin, partner at BDO, said: “The mid-market already plays an outsized role in the UK labour market, employing over 11 million people and creating the opportunities that young people need. But rising employment costs and persistent skills shortages are putting their ambition under pressure.
“For our new political leadership, addressing these challenges and incentivising businesses to invest in hiring and training youth talent should be a critical priority to avoid future skills shortages. This action will create long-term opportunities to help young people succeed, improve the UK’s social mobility and ensure the mid-market is fully equipped as the UK’s engine for growth.”
BDO has recently published its latest Mid-Market Manifesto, a series of policy recommendations for the government to maximise support for UK mid-sized businesses.
ENDS
Note to editors
Findings are based on a survey of 500 C-suite executives in UK mid-market businesses (revenue £10m–£500m). Fieldwork took place between 24 June and 02 July 2026. Some questions allowed multiple responses. The sample was quota-controlled by region and sector, with maximum targets in specific company types (e.g. PE-backed/AIM-listed) also.
BDO LLP operates in 19 offices across the UK and Ireland, employing 8,500 people. It has revenues of £1.1bn.
It provides Audit, Tax, Deals, and Consulting, Risk & Outsourcing (CR&O) services predominantly to the entrepreneurial, ambitious and growing mid-sized businesses that are driving growth in the UK and Ireland economies.
BDO LLP is the UK and Ireland member firm of the BDO Global network.
BDO Global
The BDO international network provides business advisory services in 169 countries and territories, with 95,000 people working out of 870 offices worldwide. It has revenues of US$11bn.
Contact
Lavi Pachala - Headland
lpachala@headlandconsultancy.com
+44 (0)73 1136 9817
Rebecca Stone – Headland
rstone@headlandconsultancy.com
+44 (0)7311 369943
Press office
media@bdo.co.uk
www.bdo.co.uk