Employment news in brief – May 2025

We round up the latest employment news.

Low Pay Commission launches consultation on minimum wage changes

The Low Pay Commission (LPC) has initiated a consultation to gather evidence on the impact of recent increases to the national minimum wage (NMW) and national living wage (NLW) rates. The consultation seeks views on:

• Considering a rise to between £12.50 and £12.80 in April 2026
• Effects of the increases on workers, employers, the labour market, and the economy; and 
• Reducing the age of entitlement gradually or aligning the rate for 18 to 20-year-olds with the NLW rate.

The consultation closes on Monday 30 June 2025.

Government cuts funding for higher apprenticeships

The government has announced plans to limit funding for level 7 apprenticeships, which are equivalent to a master's degree, to those under 21 years old. 

The move means that many higher apprenticeships will need to be fully funded by employers.  

Survey reveals AI's impact on workplace productivity

A recent survey conducted by YouGov on behalf of Acas revealed that over a third (35%) of employers in Britain believe AI will boost workplace productivity. The survey also found that employers expect AI to provide a competitive edge (12%), increase knowledge (11%), and enable more work with fewer staff (11%).

It encourages employers to develop clear AI usage policies, maintain data privacy, and check outputs for accuracy, tone and bias.

Government responds to Women and Equalities Committee Report

The Women and Equalities Committee (WEC) published responses to its report on the rights of older people. 

The government’s response highlighted several key points.

• The Equality and Human Rights Commission (EHRC) will allocate resources to improve compliance with the Public Sector Equality Duty (PSED) and will undertake monitoring and engagement
• The government says it is committed to implementing section 14 of the Equality Act 2010 to address combined discrimination; and 
• Employers with 250 or more employees will be required to produce menopause action plans under the Employment Rights Bill. The government will also provide guidance for smaller employers on supporting employees through menopause.

New study into why Gen Z change jobs frequently 

A recent study by LHH, part of the Adecco Group, reveals that seven-out-of-ten UK businesses struggle to retain Gen Z employees. 

The phenomenon, somewhat bizarrely described as “work situationships,” reflects Gen Z's tendency to change jobs frequently, with 46% planning to move within the next 12 months.

The report suggests that:

• 59% of Gen Z lack commitment
• 48% don’t think that their employer’s flexible working policies are adequate
• 38% don’t think they are paid enough 
• 72% of Gen Z workers are comfortable taking ownership of their careers; and 
• 24% prefer moving companies for career progression rather than applying internally.

£45 million scheme to support young people

Thousands of young people across England will benefit from a new £45 million scheme aimed at providing targeted support into work, education, and training. 

Launched by the Work and Pensions Secretary, the programme is part of the Government’s Youth Guarantee and Plan for Change.

The scheme will initially focus on eight areas, including Liverpool, which will receive £5 million to support 18 to 21-year-olds most at risk of falling out of education or employment. The programme will offer work and training opportunities, free travel passes, mental health support, and money advice.

Labour market tracker shows small rise in job postings

The latest Labour Market Tracker from the Recruitment and Employment Confederation (REC) and Lightcast reveals a slight increase in new job advertisements in April 2025. 

The number of new job postings rose by 0.4% to 729,029, while the total number of active job postings decreased by 4.8% to 1,471,260.

The report shows significant increases in job postings for business sales executives (90.0%), environment professionals (20.4%), and dental practitioners (19.8%), while delivery drivers and couriers (-23.0%), teachers (-25.9%), and driving instructors (-36.8%) saw the largest declines.

Study reveals staff are still reluctant to return to the office

A recent study by King’s College London found that less than half of UK workers would comply with a full-time return-to-office mandate. The research analysed responses from 50,000 workers and data from the Office for National Statistics.

Key findings include:

• 42% of workers say they would comply, down from 54% in 2022
• 50% of workers say they would look for a new job with home working opportunities, up from 40% in early 2022
• 10% of workers say they would quit immediately, doubling from 5% in early 2022
• 64% of women and 53% of fathers of school-age children say they would quit or look for another job. 

Of course, saying how you would respond to a hypothetical question is very different from doing it. But this study does indicate that many staff are resistant to returning to working in an office-based environment all of the time. 

New Talent Trends report

The latest Talent Trends report from Michael Page reveals that two-fifths of employers are struggling to hire staff despite rising unemployment. 

The report indicates that 45% of employees are looking for their work to provide ‘more purpose,’ while 43% feel that leaders don't balance business needs with workforce wellbeing. Consequently, 47% of professionals are actively job hunting but are prepared to wait until they find a role that meets all their needs.

Salary dissatisfaction is also prevalent, with 31% of employees unhappy with their current pay and 46% marking it as their top priority when seeking new roles. 

The report highlights a disconnect between employees and managers regarding return-to-office mandates, with 43% of managers believing productivity improves in person, while 46% of employees think they are more productive at home. Additionally, 47% of employees say they would look for a new job if their flexible working arrangements changed.

Zero-hours contracts near-record high despite reform plans

The number of people on zero-hours contracts in the UK has surged to 1.17 million, marking a 12.5% rise over the past year, according to new data from the Office for National Statistics. This figure is just shy of the record 1.2 million recorded between April and June 2023. 

Despite the Labour Party’s pledge to eliminate what it calls “exploitative” contracts through its proposed Employment Rights Bill, the trend appears to be moving in the opposite direction. 

Hospitality remains the sector most affected, with nearly a third of all zero-hours contracts found in this industry. 

NEET figures fall, but rise among young women

New figures from the Office for National Statistics show a mixed picture for young people not in education, employment or training (NEET) in the UK. 

Between January and March 2025, the overall number of NEETs fell to 923,000. This represents 12.5% of all 16 to 24-year-olds, a slight drop of 0.3 percentage points year-on-year. 

However, the data reveals a concerning rise among young women. While the number of NEET young men dropped by 26,000, the number of young women in this category increased by 19,000. The proportion of NEET young women rose to 11.7%, up 0.3 percentage points from the previous year.

The youth charity Impetus highlighted that young people with fewer than five GCSEs are 75% more likely to be NEET, and those from disadvantaged backgrounds are 130% more likely. 

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Read more – May 2025

• Do retailers have to provide single sex toilets and changing rooms for their customers and staff?
• EHRC launches consultation on code of practice following biological sex ruling
• Third-party harassment: will you have to ‘police’ customer conversations to ensure they don’t offend your staff? 
• Do you need to wait for a diagnosis before making reasonable adjustments for a neurodivergent employee?
• Holiday pay and unlawful deductions from wages claims: tribunal says two-year backstop "not lawful"