Conservative Business Minister Matthew Hancock said firms have a responsibility to ensure young people in the communities where they are based are given the opportunity to get a job and get on in life.
He said employers should be prepared to invest in training British staff rather than simply looking for "pure profit".
"As the amount of jobs in the economy grows - we saw the good growth figures yesterday - everybody should be given the chance to get on in life and get one," he told BBC Radio 4's Today programme.
"During the last boom there was a lot of recruitment from abroad and, in fact, youth unemployment went up, even during the boom.
"This is about a change of culture. I'm arguing that it is companies' social responsibility, it is their social duty, to look at employing locally first.
"That may mean that they have to do more training. It may mean more training in hard skills, in specific skills. Or it may mean training in the wherewithal, the character you need in order to hold down a job.
His intervention comes amid fears among Tory MPs of a new influx of immigrant workers from Romania and Bulgaria when restrictions on their employment are lifted next year.
The Conservatives are under pressure from Nigel Farage's UK Independence Party, which has been pressing for tighter controls.
Mr Hancock insisted that firms which were prepared to invest in British staff would ultimately reap the benefits.
"Those who put the effort in have ended up with a more motivated employee who is more connected to their company. If you, as the company, put something in, then you get somebody with a great attachment to you in return," he said.
He rejected comparisons to Gordon Brown's controversial "British jobs for British workers" campaign under the last Labour government.
"That was about a job creation scheme and also making this a law and mandatory. This is about changing culture," he said.
"I see immigration and education reform and welfare reform as very much integrated to make sure that everybody in Britain has the chance to get on. That is what this is all about."
Mr Hancock's remarks were dismissed by Mr Farage as "totally, utterly meaningless rubbish".
"He is not allowed to put the interests of British workers first because we are members of the European Union," he told BBC News.
"They know they have lost the argument on immigration and jobs, they know Ukip have stolen a march on them, they are attempting through rhetoric to take that territory back.
"They are raising expectations, but when people realise that actually they cannot deliver, then I think a lot of people will feel very angry indeed."