In recent years, the United Kingdom has been grappling with a persistent workforce crisis, a complex issue that demands attention and concerted efforts to address. The workforce crisis in the UK is multifaceted, encompassing issues such as skill shortages, an ageing population, and a lack of workforce diversity. These challenges have been exacerbated by factors such as Brexit and the COVID-19 pandemic, which have disrupted labour markets and exacerbated existing vulnerabilities.
Young mental health crisis
Finding out that one in twenty individuals between the ages of eighteen and twenty-four are economically inactive due to illness is startling. Many have been diagnosed with a mental illness, however are not physically incapable of working. According to a Resolution Foundation think tank survey, almost one-third of people in this age bracket either showed signs of bipolar disorder or suffered from anxiety or despair.
Since 2000, when 24% of respondents reported similar problems, there has been a significant increase. Antidepressants are prescribed for more than 500,000 patients.
Since many young people were forced to stay indoors during the pandemic lockdowns, away from friends and coworkers, this issue appears to have gotten worse. Particularly universities have developed into hotspots for mental health issues, but the challenges extend to the workplace.
The impact of remote work on isolation and career
The ensuing rise in “work from home” jobs has made people feel even more dislocated. Employers who permit employees to work remotely may believe they are being helpful and progressive, and this is advantageous for those who have long commutes and children.
However, working from home can exacerbate isolation in young people. Infrequent in-person interactions with peers or more experienced mentors might exacerbate and intensify worries about future career opportunities and interpersonal connections.
Another notable distinction between the younger generation of today and those who came before them and went through comparable teenage angst is that the former spend a large portion of their days on social media. Physicians today diagnose mental disorders and write prescriptions for life-altering medications for ailments that were not previously thought to be serious or chronic.
Tax burden and work rewards: A looming crisis in the UK
Additionally, as the Institute for Fiscal Studies revealed in its pre-budget analysis, it is not helpful that the incentives for hard work are restricted by a crushing tax code. In comparison to pre-Covid levels, the tax burden is expected to increase by £66 billion this year and by £100 billion by the end of the decade, according to the report.
This is mostly due to income tax levels being frozen, which forces more people into higher bands to fund more state spending. One reason why people are hesitant to pursue promotions or longer hours that could result in a tax penalty is fiscal drag. Allowances will be better rewarded for diligence and help break the concerning cycle of economic inactivity if they are unfrozen.
UK labour shortages: Unpacking ‘the great resignation’ impact
Following a spike in economic inactivity following the epidemic, over one-third of UK firms are reporting a labour shortage, according to ONS statistics.
In what has come to be known as “The Great Resignation,” there has been a 545,000 decrease in the labour force, which has increased inflation and reduced funding for public services. Currently, there are nearly 9 million “missing workers” between the ages of 16 and 64.
UK organisations are feeling the effects of the shortages. As a result, businesses are vying for talent, especially in the most affected sectors, which include professional, scientific, and technical activities; hospitality; health and social care; lodging and food services; and so on. A CBI analysis states that almost half of the enterprises assessed were unable to fulfil planned output as a result, and three-quarters of the businesses were impacted.
However, the Institute for Employment Studies maintains that unemployment is not the cause. The number of people quitting their jobs with no intention of finding new employment is the problem. They are categorised as “economically inactive,” which denotes that they are not employed or looking for employment.
Long-term workforce strategy required for UK plc
The CIPD has released its Manifesto for Good Work to sway policymakers’ decisions ahead of the upcoming UK general election. Its main takeaway is that the upcoming government should create a long-term personnel strategy to support a more expansive and audacious plan for economic expansion.
The manifesto contends that to address these problems and assist the nation’s transition to net zero, a coordinated workforce strategy built on the three main themes of skilled work, healthy work, and fair work is required.
To support this new workforce strategy, several related policy reforms are called for, including those on skills, innovation, business support, digital adoption, immigration, and labour market enforcement.
Skilled work
The skilled work manifesto advocates for a revamped industrial strategy, focusing on productivity, innovation, and job quality. A long-term vision for the UK’s skills system is crucial. Policy adjustments include reforming the Apprenticeship Levy for flexibility and supporting SMEs with quality business support for skills development and digital adoption.
Healthy work
The manifesto advocates for robust worker health and rights protection via a single enforcement body. It proposes reforms like day-one Statutory Sick Pay, higher rates matching the National Living Wage, and flexible support for phased returns. Additionally, it stresses accessible occupational health services for SMEs based on successful pilots.
Fair work
The CIPD manifesto pushes for Fair Work, focusing on anti-discrimination measures and robust enforcement of workers’ rights under the Equality Act 2010. It urges an increase in paternity leave to six weeks at full pay and proposes reforms to Shared Parental Leave. Additionally, it calls for greater pay transparency in job adverts to tackle pay and pension gaps.
(Tashia Bernardus)