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‘Missing workforce’ could ease Britain’s labour market crisis

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When Caroline Cousin was made redundant from her job as a legal secretary in Greater Manchester during the first lockdown, she was warned she might be too old to find work again.

“I didn’t realise I would struggle as badly as I did,” said the 60-year-old from Rochdale. “I was looking on jobs websites, but it’s like the Bermuda triangle. You apply for things and never hear back.”

Britain’s employers might be struggling to fill a record 1 million job vacancies amid the worst labour shortages in a generation – with a lack of lorry drivers, hospitality staff and other workers vital for the economic reopening. But for millions like Cousin, navigating the jobs market remains tough.

With the end of furlough last week, hundreds of thousands of workers are likely to be on a similar journey. Many are expected to drift into early retirement or put off their job search until their sectors recover.

Despite a gradual fall in recent months as firms scramble to recruit, official figures show unemployment is still almost 200,000 higher than before Covid, standing at more than 1.5 million.

missing workforce

Beneath the headlines, however, there are many others out of work. More than 8.7 million people across Britain are not captured in the headline unemployment rate, instead ranked as “economically inactive” by government statisticians – a category of joblessness that has swelled by more than 600,000 in the pandemic.

Most do not want a job, as they may have health conditions, be studying or have taken early retirement. Yet official figures show as many as 1.7 million would like to find work if only they had sufficient opportunities and support. Could this vast potential workforce help fix Britain’s labour market crisis?

“This is one of the big untold stories in the labour market right now,” said Tony Wilson, director of the Institute for Employment Studies. “When people ask, ‘where are all the workers?’, the reality is most of them are still here.”

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Rates of economic inactivity soared in the pandemic. People with health conditions chose to shield from the virus rather than look for work; young adults stayed with their parents or enrolled for an extra year of education; and older staff retired early amid the biggest surge in redundancies on record.

Although life is returning to some sense of normality, concerns remain over the coronavirus Delta variant and a difficult winter ahead. A decade of austerity eroding the capacity of Britain’s network of jobcentres, training and benefits systems has not been reversed, while the costs and lack of availability of childcare and adult social care mean entering the workplace is a non-starter for many.


Julia McNally, a manager at Liverpool in Work, a support scheme run by the local council and the office of metro mayor Steve Rotheram, helps thousands of jobseekers each month. She has seen first-hand how many marginalised people have stopped looking for a job in the past 18 months.

“There’s a reticence from some people to re-enter the labour market. Obviously there are still issues with the virus, with kids being sent home from school and that upheaval in people’s lives,” she said.

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“I’m hoping that will start to settle from now on in. But you’ve also got people who’ve re-evaluated their lives and thought: ‘I’m not doing this any more, I don’t want to work with such bad pay, terms and conditions.’”

Business leaders and employment experts are calling on Rishi Sunak to use his budget this month to raise the funding available for matching jobseekers with vacancies, and to increase government investment in skills and training. Company bosses have called for visa schemes to bring in more migrant workers, although they acknowledge more can be done to recruit domestically.

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So far, the government has doubled the number of frontline jobcentre staff – 27,000 work coaches have been hired in just eight months – and launched both the £2.9bn Restart scheme to help more than 1 million people in long-term unemployment, and the £2bn Kickstart scheme to help young people with job placements.

A spokesperson for the Department for Work and Pensions said: “Our multibillion-pound Plan for Jobs is giving people of all ages the skills, support and experience needed to confidently land that next opportunity, increase their hours or find new work.”

However, experts said much of the investment was simply helping Britain’s job-matching service and training provision keep pace with soaring demand, rather than reversing years of cuts to capacity. Employers also need to do more to help workers.

View image in fullscreenThe hospitality and retail sectors – where many younger people traditionally find work – were hit hard by lockdowns. Photograph: Facundo Arrizabalaga/EPA

“Jobcentre Plus does not regularly engage with people with long-term health conditions or with parents. It risks being a claimant monitoring service rather than a public employment service,” said Wilson.

“But this isn’t all just on government. When firms say they can’t find workers, they usually mean they can’t find people with the recent experience to do something for the pay and shifts they want to offer. They need to be more willing to meet workers halfway.”

Elizabeth Taylor, chief executive of the Employment Related Services Association, which represents jobs and training scheme providers, said there were programmes available but a lack of coordination to get people on to them.

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Since the government launched Kickstart, fewer than 80,000 young people have joined the programme. Yet it was designed to help 250,000 and is due to be removed at the end of December.

Young people have been particularly affected by the pandemic, working in sectors such as hospitality and retail, where lockdown hit hardest.

“I think it’s a capacity issue in jobcentres,” said Taylor. “I don’t believe that the young people aren’t there, it’s just that they’re not being identified and referred.”

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For Caroline Cousin, support finding work came from a scheme called Working Well run by the Greater Manchester mayor Andy Burnham’s combined authority, and the work programme provider Ingeus. “My confidence was at an all-time low, but they helped to lift me up,” she said. “I knew I couldn’t afford to retire early. I’d never struggled getting a job in the past but was probably naive not realising how bad it was and how picky employers were.”

With help from her job coach, and after 14 interviews with numerous companies, she has found work again as a legal secretary at a firm of solicitors in Salford. “I’d say to people, don’t give up. I felt like I’d given up but then I thought, ‘no, no, no. I’m going to get a job.’ And here I am.”