Rising Employment Costs Leave Hair & Beauty Sector Unable to Invest in Next Generation

NHBF warns that Government’s own cost burden is blocking the very apprenticeships it wants to create, as youth unemployment hits a decade high.

New figures from the Office for National Statistics (ONS) reveal that youth unemployment among 16–24-year-olds has surged to 16.1%, the highest level since early 2015, and is now higher than the EU average for the first time since comparable records began.

Hair and beauty is a people-powered sector, contributing £5.8 billion annually to the UK economy and supporting around 220,000 jobs nationwide. Businesses across the sector want to train the next generation of stylists, therapists and technicians. But right now, many simply cannot afford to.

“Hair and beauty businesses across the UK would love to take on apprentices, but Government policy is unintentionally shutting young people out of work. You cannot ask small businesses to create apprenticeships while simultaneously increasing the cost of employing them,”
– Caroline Larissey, Chief Executive NHBF.

Since April 2025, businesses have faced a sharp rise in employment costs driven by higher payroll taxes, rising wage rates and expanded employment rights. This has mainly been driven by:

• The increase in employer National Insurance Contributions (NICs) from 13.8% to 15%, alongside a reduction in the NICs Secondary Threshold from £9,100 to £5,000, effective from April 2025.
• Significant increases in the National Living Wage, including a 4.1% rise from April 2026.
• New obligations introduced through the Employment Rights Act, including strengthened statutory sick pay, day-one rights to paternity and unpaid parental leave, and new requirements around zero-hours working arrangements.

A Generation Being Left Behind

Research cited by the Government’s own reviews of youth employment warns that a significant proportion of young people not in education, employment or training have never had a job — and that failing to enter work by the mid-twenties can lead to long-term ‘scarring’ effects on lifetime earnings and career prospects.

The NHBF is urging the Government to:

• Review the employer NICs threshold as it applies to apprentice wages, to reduce the upfront cost of taking on a young person in training.
• Ensure the £1.5bn youth employment and skills funding reaches micro and small
  businesses in sectors like hair and beauty, where apprenticeships are most impactful.
• Pursue meaningful VAT reform for the hair and beauty sector, which would free up cashflow and enable businesses to invest in people.
• Engage directly with the NHBF and the hair and beauty sector through its Respect Our Sector campaign to understand the real barriers to apprenticeship growth.

The NHBF believes that hair and beauty apprenticeships could be a significant part of the solution… but only if Government policy creates the conditions that make it viable for businesses to offer them.

For more information, or to have your voice heard at government level, please visit the NHBF website.

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