Britain’s near record low unemployment belies a deep problem with its jobs market: the country has a major shortage of skills and workers. Employment remains below pre-pandemic levels, unlike in G7 peers. Vacancies are still over 300,000 higher than in early 2020.
Early retirement, sickness and a change in immigration rules post-Brexit are all culprits. Meanwhile, the UK is an average performer on international education rankings, and its employers spend just half the EU average per worker on training. As this, and future, governments look to fix UK plc’s growth woes, addressing its staffing problem is a priority.
Access to the right talent helps economies grow, innovate and raise wages sustainably. Britain needs to develop a dynamic education and training system that raises skills and productivity with the evolving demands of the job market.
It must also reduce workforce inactivity — which remains over 500,000 higher than before Covid-19 — and fix snags in its new immigration system. A multipronged approach is vital as Britain faces slowing population growth ahead.
