Recovering the lost workforce: Exploring the needs and priorities of those at the edge of the labour market

KEY POINTS

• The government has set out the aim of raising employment to 80%. Our analysis focuses on one group in particular — the ‘lost workforce’, which we define as those who are not employed but have the ability and desire to do so – to understand how we can increase the size of the working population while improving livelihoods.
• Over six million people are not employed but wish to work, equating to 14% of the working-age population. We refer to this group as the ‘lost workforce’. If this entire population were to find employment, UK GDP would increase by £454 billion, an increase of 16.9%. Getting a third of these people into work (to meet the 80% aim) would increase economic output by £151 billion.
• But there are several obstacles which can hinder the lost workforce’s ability to find their way into the labour market:
  • Just 35% feel well-equipped to enter the workforce, compared to 62% in the general working-age population.
  • Logistical issues such as job location and health support also restrain those who would otherwise be more able to find employment.
• The youngest and oldest in the lost workforce have specific wants and needs.
  • When asked where they need support, older people are more likely to cite opportunities to retrain, work placements, more flexible working arrangements.
  • Young people were more likely than the general population to have been put off a job due to concerns over their lack of experience, lack of guidance and anxiety about applying.

In light of the challenges and priorities identified in this report, we make four recommendations to better support the lost workforce in finding employment.

1. Expand access to work placements and work experience to benefit more young people, with a particular focus on school students and disadvantaged groups.
2. Improve careers guidance for those in and out of education, including support with job applications. Digitisation provides a useful opportunity to improve advice.
3. Support older people to enter or return to the workforce. We recommend a three-pronged strategy that consists of access to skills advice, funding, and private sector support.
4. Introduce a national job and training guarantee programme. A more ambitious approach, this would ensure that every person seeking employment can be provided with education, training, or a paying job.