Analysis
By s1jobs
As is often the case in a recession, there has been an increase in the number of “economically inactive” people across the UK since the start of the pandemic. Since the first quarter of 2020, an additional 300,000 individuals between the ages of 16 and 64 have withdrawn from the labour market, adding to the shortage of workers cutting across nearly every sector of the economy.
The increase in inactivity among younger workers – those aged 18 to 24 – in percentage terms is the highest of any other age group, but is only slightly ahead of that for those between 50 and 64 years of age. In terms of sheer numbers, far more older workers (228,000) have exited than their youngest counterparts (47,000).
The loss of these mature employees is a concern on several fronts, particularly as a recent survey by YouGov and the Centre for Ageing Better found that 76 per cent of employers agreed that older workers’ experience is crucial to the success of their organisation.
It is also extremely worrying for the individuals involved, as it is widely acknowledged that leaving the labour market before the state pension age can damage workers’ health, financial stability and mental well-being. This is particularly true for those with inadequate retirement savings.
According to the TUC’s analysis of data from the Office for National Statistics (ONS), economic inactivity due to long-term health problems in those aged 50 to 65 increased by 97,000, or 0.8 percentage points, between the third quarters of 2019 and 2021. Those who chose to retire from paid work increased by 50,000, or 0.2 per centage points. A further 85,000 left work for a range of other reasons.
READ MORE: Is this the new social contract with staff?
There is evidence to suggest that many of the “others” have become discouraged, with figures from the Centre from Ageing Better showing that more than a third of 50 to 70-year-olds feel disadvantaged in applying for a job because of their age. Meanwhile, research from Legal & General has found that older workers are 17% more likely to face redundancy than their younger counterparts.
If the Government’s ambitions for longer working lives is to become a reality, then organisations will have to adopt a more pro-active approach to keep older people engaged in the labour market. Eliminating age bias in the recruitment process is a logical first step, while flexible arrangements for those (of any age) with health concerns or caring responsibilities will help to retain existing staff.
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