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The Actuary The magazine of the Institute & Faculty of Actuaries

Ageing society and migration limits present ‘workforce crisis’

The number of workers aged over 50 in the UK economy grew by 230,000 between the first quarter of 2016 and the first three months of this year.

Potential workforce crisis ©Shutterstock

That is according to new research by Mercer, which shows that the amount of workers aged under 35 grew by just 50,000 during that time, while the number of 35-49 year-olds decreased by 48,000.

It was also found that 143,000 UK-born employees stopped working, and that this was only offset by the arrival of 147,000 EU-born workers, and around 232,000 non-EU workers.

As a result, it is thought that the country’s ageing society, combined with post-Brexit limits on migration, is likely to cause a workforce crisis for businesses that are not prepared for the transition.

“There’s clearly an exodus of the UK-born employees, either through retirement or emigration, and the nation’s pool of younger workers is shrinking,” Mercer partner, Gary Simmons, said.

“Companies employing older workers need to create working environments that can capitalise on that, but also equip them with new skills to ensure profitability.

"Those with a younger workforce have to retain them, and develop a new approach to how they attract other types of workers – or get ready to pay huge salary premiums.”

The research reveals that if net migration into the UK levels off at 100,000 per year from 2020, the number of over-50s in the workforce would subsequently increase by over a million by 2025.

In contrast, the number of workers aged under 50 would fall by 200,000, and by 100,000 for the under-25s, while apprentice and graduate numbers would also be less.

This issue is thought to be particularly concerning in the health and social care sector, where 35% of employees are over the age of 50, and 18% are foreign born.

It was found that the number of EU nationals registering as nurses in England dropped 92% in the last six months of 2016, and 2,700 EU-born nurses left the NHS in 2016, compared to 1,600 in 2014.

“It’s difficult to see how the industry will weather this storm unless it retains its UK workforce, maintains access to non-UK labour forces, automates, and ceases provision of some services,” Mercer workforce planning specialist, Julia Howes, concluded.

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