The CIPD's latest study on skills and migration in the Labour Market Outlook, based on a survey of more than 1,000 employers, shows that demand for migrant workers has increased to a record high, with a quarter of employers now planning to hire migrant workers in the third quarter of 2011. In response to the annual cap on non-EU migrants, more employers say they will hire EU migrant workers (34%) than up-skill existing workers (23%) or recruit more graduates (18%). Almost one in ten employers (8%) say that they would offshore jobs abroad.

In contrast to the growing proportion of employers looking to recruit overseas workers, employers' overall hiring intentions for young people have fallen since Spring 2010 when employers were last asked these questions in the survey. Only 12% of employers plan to hire 16 year-old school-leavers in the three months to September 2011, down from 14%. Similarly, the number of employers planning to recruit school-leavers aged 17-18 and above has fallen to a quarter (25%) from almost a third (31%) in the same period.

The number of employers planning to take on higher education leavers under the age of 24 is 38%, compared to 47% last year. However, the Government's efforts to boost the employment of apprentices appears to be working, with 37% of respondents planning to recruit apprentices compared with 24% last year.

When asked what skills the Government should focus on improving to encourage more employers to recruit young people, respondents identified literacy (53%) and numeracy (42%), as well as employability skills, such as good customer service skills (40%) and good communication skills (40%).

Gerwyn Davies, Public Policy Adviser, CIPD, comments: "Youth unemployment looks set to rise further amid employer concerns about the employability of young people. The migration cap is stemming the flow of skilled non-EU migrant workers on the one hand, but increasing the supply of EU workers with the other, which highlights the relative ineffectiveness of the cap in bringing net migration levels down.

"Employers seem eager to take full advantage of this, to make use of their positive attitude and their skills. The perception among many of our members is that too many young people in the UK do not have these qualities, which may explain why fewer young people are being hired. At a time when many school-leavers will be looking for work and the number of job opportunities is falling, youth unemployment could increase more sharply in the coming months. The Government therefore needs to redouble efforts to ensure the education and skills system is fit for purpose to ensure young people can find a foothold in an increasingly competitive jobs market.

"The CIPD is actively supporting a number of initiatives to try and boost the number of employers that offer work experience, apprenticeships and internships to help young people get to the first rung of the employment ladder."

View the Labour Market Outlook and Focus Section: Young People