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The Actuary The magazine of the Institute & Faculty of Actuaries

Businesses heading for workforce crisis without effective management

UK companies are sailing into a workforce crisis unless migration, automation and productivity are well managed, according to Mercer’s Workforce Monitor report released today.

Businesses could struggle to find the workers they need ©Shutterstock
Businesses could struggle to find the workers they need ©Shutterstock

It models four potential scenarios mapping how Britain’s workforce may evolve over the next 13 years, with each producing an outcome of, at best, very slow growth, or even shrinkage, of the working population.

The report highlights how GDP growth has been very closely linked to workforce size since shortly after the First World War, with the latest projected changes suggesting major headwinds for the UK economy.

Mercer partner, Gary Simmons, said: “Both the government and businesses have a Herculean task ahead of them in determining how we respond to the changing shape of our society.

“We hope that our modelling is a wake-up call to the business community. There is a tremendous opportunity for far-sighted organisations to begin determining and implementing clear plans in response.

“If they do not act now, they could potentially find they do not have their share of the people and skills they need in future.”

This analysis was based on possible changes to current migration levels post-Brexit, which are likely to exacerbate stresses and strains caused by the UK’s ageing population.

The report shows how more UK-born people leave the workforce through retirement, emigration or death, than enter it, with EU and non-EU immigrants filling that gap since 2013.

It argues that businesses should prioritise analysis, automation and accessibility of the working population in order to face up to these potential challenges.

“Companies should analyse and understand the make-up of their workforce. They should look to increase retention of current staff and be accessible, employing sectors of UK society that might be under-represented in the workforce, such as women, the disabled, and long-term unemployed,” Simmons continued.

“They should also be investing heavily in automation where possible as well as improving employee productivity, through training and skills.”