With more vacancies in the UK than the number of unemployed people, something has to change in our approach to hiring. Wave’s Emily Buckley investigates whether the high number of economically inactive people could prove the answer and looks at how to attract those that could work under the right circumstances back to the jobs market.
It’s official – data from the Office for National Statistics has confirmed that there are now more vacancies in the UK than the number of unemployed people, the first time this has happened since records began. WaveTrackR data, too, saw a rise in jobs from April to May. Vacancies continue to increase whilst the unemployment rate continues its downwards trajectory. The reason for this is two-pronged. It is partly down to the departure of a number of workers from the UK during the pandemic who have not returned, plus the difficulty in workers from the EU getting work visas following Brexit. However, economic inactivity – those aged 16-64 who are not in employment and who are not seeking work – is proving to be a major culprit. The economic inactivity rate continues to be higher than before the pandemic and could be where we need to focus our efforts in order to start filling these record-high vacancies.
Economic inactivity has become a real problem since the outset of COVID-19 and it is hurting the UK jobs market. Students make up a proportion of this number and they will enter/re-enter the market once they have graduated but the majority consists of those over the age of 50 and the long-term sick. Not everyone can or will return but a different approach is clearly needed to encourage those that can – that means employers being willing to be more flexible and not demanding an immediate return to the office 5 days a week. This is true for both older workers who took early retirement and don’t want to return to work to be foisted in the hamster wheel again, and for the long-term sick who literally need a more flexible solution to enable them to return to employment. James Kirkup, Director of the Social Market Foundation, wrote in a piece for The Times that “work isn’t working”, maintaining that both employers and the government (the latter of whom seem to be constantly pushing the discourse that employees should now be returning to their desks) need to change their approach to employment.
The economic inactivity rate currently stands at 21.3%, far above pre-pandemic rates. It is driven by those between the ages of 50 and 64, many of which left the workforce during the pandemic. Following a downward trend of economic inactivity in this age group from 1971, the ONS found that in the UK an extra 250,000 50-64 year olds left the jobs market during that time. In fact, older workers are the only age group to have seen an increasing trend in economic inactivity throughout the pandemic. However, with the cost of living continuing to rise (inflation hit the highest rate in 40 years towards the end of June, reaching 9.1%, and it looks set to continue to rise), the number coming out of retirement – whether full-time, part-time or as part of the gig economy – appears to be rising once more.
A BBC Worklife article on the ‘unretiring’ trend cited Indeed reporting a spike in 55 to 64 year olds ‘urgently seeking work’, while research on behalf of investments company abrdn found that 66% of people retiring this year have admitted they don’t expect to give up work entirely as living costs soar. In an ONS survey, 48% of over-50s who have returned to work since leaving during the pandemic said that they did so because they needed the money, whilst 23% said they simply couldn’t afford to retire.
While some of the reasons for a return to work from retirement may be out of the control of retirees, there could be a real benefit to the economy. In many of the industries with significant skills shortages, older workers who have taken early retirement may be exactly the demographic needed to plug the gap. Experienced workers with a specific set of skills are desperately needed in industries such as healthcare, education, technology, and financial services. The WaveTrackR May 2022 Recruitment Trends Report showed that, yet again, Health & Nursing and Public Sector are posting high numbers of jobs but receiving incredibly low numbers of applications, with Health & Nursing receiving an average of just 3 applications per job and Public Sector an average of just 5. What needs to happen is for there to also be benefits for the economically inactive, beyond a need to be more financially stable, to ensure happy, productive employees.
What are the key elements that might encourage the economically inactive back to work?
Flexible working
Reaching retirement age and wanting to slow down used to mean a scissor-cut from the world of paid work. However, the pandemic changed that by opening up a plethora of flexible working options. It is now far easier for older workers to work from home part or all of the time and/or enjoy flexible hours. Working into your retirement years wouldn’t be so bad if you could do it around your hobbies or whilst travelling. Digital nomads don’t necessarily have to be younger workers. This is all completely possible with flexible working options.
In the ONS survey previously cited, of those older workers who had retired but would consider returning to work, flexible working was the most important aspect of choosing a new job (36%), followed by working from home (18%) and something that fits around caring responsibilities (16%). The majority of those who would consider returning to work or are currently looking for paid work stated that they would like to return on a part-time basis (69%). This is true also for the long-term sick and those with disabilities. A full-time job with rigid 9-5 hours in an office 5 days a week may be impossible for many but flexible working around their needs could be a game-changer.
Healthcare benefits
The provision of healthcare benefits could be attractive to the long-term sick, disabled, and older demographics. Providing access to healthcare beyond the NHS is not only a draw in itself for those who might have additional healthcare needs, it shows that the employer is supportive and understanding. It demonstrates a supportive culture that will understand the extra flexibility that might be needed to help people back into work.
Salary
There’s no two ways about it, with the cost of living continuing to surge, salary is an incredibly important consideration for most. And with fuel prices soaring, many simply can’t afford to travel to work if their salary isn’t commensurate. A handful of companies, including Rolls Royce and Lloyds Bank, are even planning on cost of living bonuses as a way to both retain staff and attract candidates. However, what is equally important is that the salary range is advertised on the job ad. Without knowing what the expected salary is, what is there to induce the economically inactive to consider a return to work? Where is the incentive to apply for a job if there is the very real possibility that they will go through the process of applying and interviewing only to find out that the salary does not fit their expectations? It is vital to empower candidates to apply for your jobs by avoiding uncertainty when it comes to salary.
Including salary ranges also improves efficiency in the hiring cycle, something that is more important than ever in such a competitive market. A huge amount of research has shown that publishing salary on job ads can increase the number of candidates that apply across the board. For example, CharityJob, the UK charity sector’s biggest job board, shared that recruiters received twice the amount of applications when they published the salary. Salary transparency also goes a long way towards achieving pay equity for some of the underrepresented and marginalised groups within the economically inactive.
A commitment to D&I
For older demographics, the long-term sick and those with disabilities, there is always the fear that they will be discriminated in the recruitment process, something that is a huge barrier to even considering a return to work. Demonstrate your commitment to D&I and that of your client’s by including a diversity statement in your job advert, publishing your D&I policy or pledge on your recruitment website, and state that openness, inclusion, diversity and transparency are part of your values. This needs to be backed by action, of course, but public statements can be incredibly powerful in gaining candidates’ trust.
And definitely don’t… interrogate gaps in working experience
There are a multitude of reasons for a gap in employment on someone’s CV, especially post-pandemic. For the economically inactive, who might have been out of the jobs market for a significant amount of time, this is one of the major barriers to re-entry.
With the issues the market is currently facing, it is clear that something needs to change. We need to find a different way to help those that can and want to work, back into work. 21.3% is a huge figure – if we can encourage even 5% of the economically inactive to return to work – in a way that is sustainable, financially worthwhile and fulfilling for them – that could make a big difference to helping improve the labour shortage.
Wave aims to create a world where talent is never missed by providing recruitment solutions through a mix of cutting-edge technology and creativity, via WaveTrackR (data-powered multi-poster and analytics tool), RecWebs (tailored recruitment websites) and WaveMedia (strategic recruitment media buying).
