The UK workforce will increase by just 820,000 (2.4%) by 2025 – a significant drop from recent trends that have seen the workforce grow by 9% in the 10 years up to 2015 - according to Mercer’s Workforce Monitor. It predicts that the overall population will increase at a faster rate than the workforce for the first time in half a century, signalling long-term changes to the economy.
An estimated 710,000 extra workers will be needed in the health and social care sector, based on there being an anticipated further two million over-65s in the UK by 2025, the report stated. Assuming this demand is met through the forecasted workforce growth, only 110,000 additional workers will be available to fill the demand of all other industries.
Age demographics in the workforce will also be impacted. Over the next eight years there will be 300,000 fewer workers under the age of 30 and one million more over-50s in the UK as a result of falling net migration and ageing Baby Boomers, the report found. London, whose economy is reliant upon young and migrant workers, will be particularly adversely affected. The report forecasts that London’s under-30s worker population will fall by 25%, while over-50s will increase by 25%.
Mercer has recommended strengthening traditional sourcing methods, diversifying the talent pool, using technology to fill workforce gaps, and relocating or moving roles to tackle the expected changes to labour availablity.
“There are going to be big winners and losers in the battle for workers," said Gary Simmons, a partner at Mercer. "If businesses don’t take action now they will face significant costs and be left in a poor position to take advantage of the productivity enhancements promised by rapid development of robotics, digital and machine learning.
"Creating a workplace inclusive of and attractive to all, regardless of age, gender, sexual orientation, disability and ethnic background is now a business necessity. Companies need to think both urgently and creatively about how to attract a more diverse group of people, including the over-50s and particularly parental leave returners to tap into that wider talent pool.”