Inclusion of young workers and women key to averting talent crisis

01 March 2019 Consultancy.uk

Demand for workers is set to rise in the future, with the pool of available workers shrinking in an ageing population. While migration is one area that could fill demand, a further increase in the participation rate of women and young workers could add up to a million more people to the workforce, while those 65+ are also set to add additional capacity.

With the national unemployment rate already sitting at a four decade low, UK employment has hit new heights in 2019, with the rate of those without jobs now sitting at 3.8% across all ages. While this statistic does not differentiate between freelancers in a sprawling and often inequitable gig economy, the statistic will have ramped up concerns among the business community regarding an impending talent shortage, especially when combined with ageing populations across many of the world’s leading economies. Adding to that are geo-political tensions regarding the movement of labour that could potentially create worker shortages in a range of business segments.

One way in which businesses have sought to boost talent acquisition campaigns is by courting talent historically marginalised by the market. In particular, this has seen many companies striving to prove that their workplace is ideal to foster the career development of women. While on paper, many companies have made an effort to show they are changing, various forms of discrimination, differences in attitude as well as normative constraints among management mean that in practice, the portion of women in many lines of work remains low.

Changes in participation rates as women joined workforce

New analysis for the UK labour market by Mercer has found that overall female participation in the UK market is still lagging behind that of men in all age groups, with a ratio of 85:100 for working age people between females and males. This lags considerably behind Nordic countries, where the ratio is 92:100. The firm notes that if the difference would be reduced to the figure in Nordic countries, it would add around 1 million women to the workforce across the UK.

Mercer did find that there has been some advance in terms of participation rates between men and women – compared to ten years previous; 66% of women now participate compared to 60%. This increase is seen in all age brackets, with the difference falling most sharply for 20-24 year olds, where it halved from almost 10% to 5%, while for 25-30 year old difference dropped from 15% to 10% in the latest figures.

Problematically, however, the most significant improvement in female participation was seen in the portion of the population aged over 65. The sector which will remain part of the workforce for the least amount of time saw its gender participation gap fall from 25% to 14%. While this also shows that a large part of the progress on the matter will be temporary in the UK, it also reflects the fact that many women have been so badly impacted by the gender pay gap that they were unable to save sufficiently to retire, lumping them with the prospect of working into their twilight years. Mercer added that these numbers are likely to see further increases in the coming decades, as people live longer, and the demand for workers continues to rise.

Young people not in employment, education or training

This is not the only place in which Mercer found a generational gap, however. In terms of the UK’s soaring employment figures, Millennials and Generation Z are being left behind by their parents and grandparents. The most secure in work are over 65, with unemployment among those seeking work at 1.2%. This is followed by 35-49 year, members of Generation X, who boast an unemployment rate of 2.8%, well beyond the percentage considered full employment. This is followed by the tail end of the baby boomers, with unemployment at around 3%.

This is in stark contrast to those aged 25-34, who have an unemployment rate of around 3.8%, and even more drastically with those between 18-25, who have an unemployment rate of 12%. The firm notes that the under 25 group has been shrinking overall, suggesting that the market is still excluding the shrinking pool of new talent, despite companies complaining of a shortage of new labour.

It is true that this group also has increasingly opted for full time education, but these individuals are traditionally not included in unemployment figures anyway. Interestingly, the proportion in full-time education has flat lined in the last five years, presenting companies with something of a paradox for the future. Having consistently favoured ‘experience’, driving more than 50% of graduates into non-graduate rolls, the market has sent a message that students are wasting their time in higher education. The market is at the same time desperate for a future pipeline of highly skilled workers to replace its ageing workforce.


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