The UK’s workforce is facing a growing crisis, with fresh data revealing that a quarter of young workers aged 18-24 have considered leaving the workforce over the past year. This alarming trend underscores the wider issue of economic inactivity, which is increasingly affecting businesses, productivity, and financial performance across the country.
According to a recent report from PwC, 10 per cent of all UK workers are currently contemplating leaving work for an extended period, while an additional 20 per cent have thought about it in the past 12 months. These figures highlight a significant shift in workplace attitudes, particularly among younger employees, who cite mental health struggles and unfulfilling roles as their primary reasons for wanting to step away from employment.
Employers Struggling With Workforce Retention
A survey conducted by PwC among over 300 businesses found that six in ten employers have seen a rise in employees exiting the workforce. This trend is causing widespread concern, with an overwhelming 90 per cent of businesses admitting they are worried about the implications of increasing economic inactivity.
The UK’s economic inactivity rate—representing those who are not seeking or unable to work—rose to 22 per cent of working-age adults last year, according to the Office for National Statistics (ONS.gov.uk). This rise is putting businesses under immense strain, with 81 per cent of employers reporting a noticeable drop in productivity and 77 per cent stating that financial performance has taken a hit as a direct result of workforce departures.
Mismatched Solutions to Economic Inactivity
Despite recognising the growing issue, many employers appear hesitant to take proactive steps to re-integrate inactive workers into the workforce, even when 67% of UK workers have considered quitting in the past due to bad management. PwC’s survey found that 57 per cent of businesses admitted they would be reluctant to hire someone who had previously been inactive. Furthermore, 37 per cent of employers associated economic inactivity with people “gaming the system.”
However, the report also pointed out that many workers struggling with economic inactivity face genuine challenges, particularly a lack of necessary skills for the modern world and qualifications to re-enter the job market. Mental health concerns remain a dominant factor among younger workers, making it crucial for businesses to consider how they support employee well-being.
Yet, instead of addressing key issues such as workplace culture, mental health support, and flexible working arrangements, many employers are focusing on traditional incentives, such as company car schemes, which fail to address the root causes of economic inactivity.
Call for Government and Business Collaboration
Experts are calling for urgent, joined-up action between government, businesses, and educational institutions to tackle the problem of economic inactivity.
“Economic inactivity is a very real problem for people and businesses. As well as the cost to individuals, businesses are understandably concerned about the direct impact on productivity and financial performance,” said Marco Amitrano, senior partner at PwC UK.
Katie Johnston, local and devolved government leader at PwC, echoed these concerns, stating:
“If we are serious about reducing economic inactivity and contributing to the government’s ambition of economic growth, then we need joined-up action not only helping people back into work, but more importantly stemming the flow of people out of the workforce. This is not an issue for government alone—it needs close collaboration between central and local government, health and education providers, and employers.”
With the UK already grappling with skills shortages and an ageing older workforce, tackling the root causes of economic inactivity is critical. Employers and policymakers must act swiftly to address the needs of workers, particularly young people, who are at the highest risk of leaving the workforce.
The Workers Union Says…
“The issue of economic inactivity is more pressing than ever, and the current data serves as a wake-up call for businesses and policymakers alike. If the UK is to maintain a thriving workforce, urgent action is needed to support workers, improve job satisfaction and fulfilment, and create a work environment where employees feel valued. Failing to do so will not only affect individuals but will also have long-term economic consequences for the country as a whole.”
