Britain's employment crisis as more than 1m job vacancies available - here's why

The country has nearly 1.25 million job vacancies and business groups have warned that chronic labour shortages mean many companies now face a “crisis”. The largest number of vacancies is found in the health and social work sector, where 217,000 empty posts are reported. But there are also major shortages of workers in fields including retail, hospitality, science and manufacturing.

Attention has now focused on hundreds of thousands of over-50s who are not on the dole but not in work – many of whom could help drive the economy forward.

Jobs figures show that in the three months to July there were 386,096 more “economically inactive” adults aged 50 to 64 than before Covid-19 hit the UK.

John Longworth, chairman of the Independent Business Network, pushed for over-50s to be brought back into employment.

He said: “There is a labour shortage across Europe and the UK is no exception. This is a result of Covid lockdowns which resulted in many over-50s not returning to work, but instead retiring early.

“This age group were amongst the most reliable, experienced and skilled in the workforce.”

Mr Longworth warned it would be “a challenge” to get them back into work and said it was “vitally important to make work worthwhile”. He added that tax incentives could play an important role in encourage this age group to come back on a full or part-time basis.

Kitty Ussher, chief economist at the Institute of Directors (IoD), is also concerned by the departure of older citizens from the workforce.

Warning that skills shortages were “holding back growth and expansion plans,” she said: “Older workers in particular are leaving the labour market, mainly due to long-term sickness and also through lifestyle choice.”

Research by the Office for National Statistics suggests that many older people who have left the workforce since the pandemic could be persuaded to take up jobs.

Eighty-six percent of those aged 50 to 54 years said they would consider returning to work, as did 65 percent os those aged 55 to 59 years and 44 percent of for those in the 60 to 65 age group.

Alex Veitch, director of policy and public affairs at the British Chambers of Commerce, stressed the threat that worker shortages posed to growth.

He said: “With almost 1.25 million job vacancies, labour shortages have reached crisis levels for many businesses across the UK. The incredibly tight labour market is having an impact on firms’ ability to service existing customers and grow.

“In an environment where businesses are being hit by rampant inflation and record high input costs, labour shortages are yet another issue dragging down business confidence.

“If Government is serious about growth, it needs to get serious about jobs.”

Caroline Abrahams of Age UK cautioned that returning to work “isn’t an option for people who’ve had to stop working due to poor health or caring responsibilities”.

She said: “People in their 60s may be particularly disadvantaged now as they are more likely than other age groups to have caring responsibilities, be in poor health themselves, and to be working in lower paid roles. If you’ve recently escaped an unfulfilling job, then the incentive to go back to work is low, especially when the flexibility that you need may not be available.”

Karl Williams of the Centre for Policy Studies said there should be a new drive to get people back into employment.

He said: “It would be short-sighted to rely on low-skilled immigration to plug gaps in the labour market, which in part have been caused by 640,000 working-age adults withdrawing from the workforce in the wake of the pandemic. It would be far better to encourage this group back into employment and to focus on ways to enable workers to produce more of the goods and services we want with less effort.”