UK labour market resilience grows with AI preparedness

The resilience of the UK labour market has strengthened dramatically over the last year, according to a new whitepaper. The research from Whiteshield suggests that the country’s rapid integration of artificial intelligence has helped prepare its workforce for further technological disruption in the coming months.

Labour market resilience, the ability to face and recover from disruptions to the labour market, is a cornerstone of successful human capital and talent in a nation. Countries need to both foster labour markets capable of withstanding temporary shocks, as well as cultivate the capacity to navigate structural trends.

Each year, Whiteshield’s Global Labour Resilience Index (GLRI) measures the degree to which labour markets are capable of navigating both structural trends and temporary shocks. Long-term trends include technological disruptions or the green transition, while examples of short-term shocks might be the global financial crisis of 2008, or the Covid-19 pandemic.

In the last year, there has been a significant shift in which countries are best adapted to the challenges their labour markets face. While in 2024, the shoddy handling of the pandemic and rampant inflation meant the US ranked 14th, the last 12 months have seen it shoot up the list to 1st place. Overall, meanwhile, Europe has seen its dominance at the peak of the ranking slump – last year the top 10 featured nine European economies, but a year later, that has fallen to six – as the continent struggles to deal with uncertainty around trade tariffs, AI and war on its eastern borders.

Bucking this trend, is the UK. Unlike most of its mainland counterparts, the country’s labour market has seen its resilience rise rapidly, according to Whiteshield – something the researchers largely attribute to the transformative power of AI.

According to the study, the UK’s rapid integration of AI into the skills of its labour economy has dramatically improved its prospects. Clustered with Canada, Sweden and Finland, the UK is not quite a top resilience leader, but it is well positioned to adapt to trends in the near future.

These include both opportunities and challenges. AI presents significant opportunities for labour markets, fostering job creation in fields like AI data architecture, human-AI interaction design, and AI ethics. However, it also poses serious risks – including job displacement, wage inequality, and economic polarisation. Looking ahead, the GLRI researchers therefore stress the need for proactive policies to ensure the equitable distribution of AI-driven economic benefits.

Christopher Pissarides, a special advisor and director at Whiteshield, added, “This year’s report provides actionable insights to address technological disruption, economic inequality, and global crises. By understanding how labour markets evolve, we can drive innovation and create opportunities that benefit everyone.”