Britain’s workforce shrank by 1.3 million over the last five years, according to the latest data published by the Institute of Employment Studies.
Long-term ill-health and a rising trend in economically inactive younger people were among the drivers behind this contraction, the body said in its labour market report for Q1 of 2025.
Growing youth inactivity and widening employment gaps are fuelling concerns about a growing population of people “not in education, employment or training” – NEETs.
Long-term disengagement from the labour market could have lasting consequences on the UK’s productivity and social cohesion.
Get Britain working
The UK government’s strategy, Get Britain Working, is more critical than ever. Data clearly show that structural inequalities are not only persistent but, in some cases widening.
Current trends risk further exclusion rather than fulfilling the policy ambition of creating an inclusive labour market in which everybody can participate and progress in work.
These latest stats also highlight the caution among employers grappling with an increase in National Insurance and a higher minimum living wage.
Hospitality and baby boomers
As announced in The Financial Times, the hospitality sector has turned to baby boomers to meet high levels of employment growth with a 10% increase in over-50s returning to casual roles to supplement their income.
Hospitality is only beaten by finance and insurance in this trend – reversing what was seen immediately after the pandemic with many over 50s taking early retirement.
Viewpoint
The underlying figures look good: unemployment is static, employment is slightly up and inactivity is slightly down.
Older people are filling vacancies leaving young people struggling to find careers. Although the graduate premium is diminishing, ‘safe pair of hands’ employers are looking for NEETs.
This is a major issue if we are to wean ourselves from skilled foreign workers and to persuade employers to embrace the risk of employing more local youngsters.
