Though UK unemployment is at its lowest rate since 1974 at just 3.6 per cent, the number of people who are not in work, nor are they looking, is growing. This “economically inactive” group amounts to one in five of the working-age population, and is up 1.2 percentage points on before the pandemic. That’s more than one in five people aged 16 to 64 who have completely removed themselves from the labour market. They have decided that work is just not working for them.
Overall, Britain is facing a labour shortage of around 1.3 million workers, with certain industries feeling the deficit more than others. At the end of July there were roughly 180,000 unfilled vacancies in the hospitality sector, having risen by a third on this time last year. Anyone who hasn’t been living under a rock will also have heard that the NHS is facing a serious recruitment crisis – but just how serious is tricky to grasp.
Coming off the back of a pandemic, around 500 nurses and midwives are quitting their jobs every week, citing too much pressure and poor workplace cultures. It’s not hard to imagine the spiralling impact this is having on those who choose to stay.
With fewer British nationals finding nursing appealing, The Department of Health and Social Care has ramped up its overseas recruitment. Staff shortages are also prevalent among ambulance crews, doctors, dentists and even vets – despite the increase in demand from all those lockdown puppies.
“There are still more than half a million more people out of work than there were before the pandemic [yet] firms simply can’t find the workers to fill their jobs,” says Tony Wilson, director at the Institute for Employment Studies.
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Lower levels of migration caused by Brexit have also contributed to the shortages. But is there also an element of, as Kim Kardashian put it: “People just don’t want to work these days”?
Older people, in particular, have dropped out of the workforce like fed-up flies. There were around 180,000 fewer people aged 50 or over in work late last year than before the pandemic. And – remember furlough? – well, older workers were more likely to be selected to be placed on furlough by their employers, and more likely to be in the firing line when it ended.
There are currently 2.5 million people out of work owing to long-term sickness, that’s 400,000 more than early 2020. It is unclear exactly what these illnesses are, but we know that the emergence of long Covid and an increase in mental illness both require additional support.
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And with NHS patient waiting lists under serious strain, “it’s hard to escape the conclusion that this is linked to the pressures in the NHS”, says James Smith, an economist at ING.
Over half of those in their fifties who left or lost their jobs since the start of the pandemic said, in a survey conducted by the Office for National Statistics, that they would be willing to consider returning to work, as did a third of those in their sixties. Flexible working was the number one factor they said would influence their decision.
So what more needs to be done? And how can people be tempted back to work, especially with the prospect of low wages, a furlough-induced career change, long-term health condition or being the oldest person in the office, making the offer less appealing than it used to be?
“If we don’t do more to help more people into work, then any tax cuts will just lead to even higher inflation and higher interest rates for longer,” Wilson warns.
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Employers are also facing a skills gap – meaning the skills they need and the skills job seekers have simply do not match. Since before the pandemic, tradespeople including roofers, scaffolders, carpenters and plumbers have been in high demand, with many young people being sold the vision of success as linked to a university degree.
The government has now introduced extended and more flexible traineeships, such as the more vocational-focused T-levels, as an alternative to A-levels. It is hoped that traineeships might offer an alternative path to generate the skills that people and employers need.
What is clear is that things need to change. We need innovative approaches to help people rejoin the workforce. Because the argument that “it’ll be good for the economy” won’t quite cut it.
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