Employment consultant says growth in number of workers will nosedive and urges companies to invest in young people

British businesses have been warned to brace for a severe workforce crisis triggered by Brexit, with the number of workers entering employment expected to fall behind the rate of population growth for the first time in half a century.

According to employment consultant Mercer, the size of the British workforce is expected to rise by just 820,000 by 2025, marking a dramatic slowdown from the previous decade, when almost 2 million people entered employment.



The increase would cut the workforce growth rate from 9% in the 10 years to 2015 to 2.4% six years after Britain leaves the EU at the end of March 2019, underscoring businesses’ fears over a potential labour shortage.

The slowdown is also forecast to have worrying consequences for the government at a time when more workers are needed to enter the health and social care professions to care for Britain’s ageing population. Mercer estimates there will be an additional 2 million people aged 65 and over by 2025.



The consultancy firm said as many as 710,000 people are likely to be required by the health and social care sector over the coming few years, leaving just 110,000 available for the rest of the economy.



Gary Simmons, a partner at Mercer, said: “There are going to be big winners and losers in the battle for workers. If businesses don’t take action now they will face significant costs and be left in a poor position.”



Net migration of EU nationals to Britain falls by 75,000 Read more

Net migration numbers to Britain have been falling since the EU referendum, while there are fears among business leaders that tighter controls on immigration could compound growing labour shortages.

The latest official figures show net annual migration of EU nationals to Britain fell by 75,000 in the year to September – the lowest level for five years as a “Brexodus” gets under way. The total number of people coming to work in the country fell by 45,000 to 248,000, which was driven by a 58,000 drop in the number of EU citizens coming to work.



Sectors such as hospitality, retail and agriculture have voiced particular concerns over their access to migrant labour, while universities, pharmaceutical companies and banks are worried about attracting international talent.



Jobs vacancies are at the highest levels since comparable records began in 2001, according to the Office for National Statistics, with 816,000 recorded in the three months to February. The Bank of England’s network of regional agents said on Wednesday that recruitment difficulties were the primary concern raised by the businesses they spoke to in the first quarter of the year.

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Mercer added that over the next eight years there were projections for 300,000 fewer workers under the age of 30, while there would be an increase of 1 million people aged over 50 as a result of falling net migration and ageing baby boomers. London in particular could suffer as its economy was more dependent on young and migrant labour. Mercer forecasts the capital’s resident worker population under the age of 30 will fall by a quarter, while rising by the same amount for the over-50s.

Simmons said companies needed to boost their diversity and inclusion practices to encourage more people into the workforce. “Young people don’t grow on trees,” he added.

