New research published by the International Longevity Centre-UK (ILC) today projects that as a result of population ageing, COVID-19 and Brexit, the UK economy could see a shortfall of 2.6 million workers by 2030 – almost twice the workforce of the NHS. Amid continued labour market challenges, ILC calls on Government to develop a comprehensive Workforce Strategy to tackle future shortages.
The Plugging the gap report by ILC, the UK’s specialist think tank on the impact of longevity on society, warns that recent labour shortages seen in sectors such as transport, health and care are just warning signs of things to come, with shortfalls expected across a range of sectors over the coming years.
The report projects that 2.7 million more jobs will be created by 2030 if current trends continue. But with many older workers set to retire over the next years and fewer younger workers joining the labour force, these jobs won’t be filled, warns the report.
Most importantly, a large number of workers fall out of the workforce long before State Pension Age as a result of poor health and or caring responsibilities but also barriers to re-employment. Those that remain economically active up to and beyond State Pension Age will tend to work reduced hours.
This trend is combined with added pressures of COVID-19, leading to many people retiring early, and Brexit leading to reduced migration, previously integral to the UK economy.
“Population ageing, the pandemic and Brexit have come together to form the perfect storm. If we continue with business-as-usual, we are going to see huge shortfalls hitting all sectors of the economy”, warns report author Prof Les Mayhew, Head of Global Research at ILC and Professor of Statistics at Bayes Business School.
“The Government has formulated a set of strong policy priorities to develop infrastructure, health and care over the coming years which will place huge demands on the economy. But if we fail to address the workforce challenge, we simply won’t have enough people for the jobs.”
In its report, the ILC urges the Government to introduce a comprehensive Workforce Strategy that looks across the whole economy. “We can’t keep plugging the gaps as issues arise from sector to sector. Whether it’s HGV drivers or care workers, at the core we need to ensure we create quality jobs that people can and want to stay in for as long as they want to”, adds Prof Mayhew.
“This means supporting healthy workplaces, supporting carers and creating flexible conditions that suit people’s needs. We need to remove barriers to people returning to work – be that following time out caring, dealing with a health need or taking parental leave. And we need to consider the role of migration and automation in addressing labour market gaps.”
“People living and working longer is a good thing and it needn’t be a disaster for the economy – quite the opposite. But if we don’t act fast to respond to the new normal of longer working lives, we will pay the price across every single industry.”