If you thought it was only young people fleeing the workforce, think again. The UK is currently seeing a large number of over-50s resigning en masse from the workforce at a startling rate - known as a “silver exodus”.
According to The Times newspaper, around 300,000 more workers aged between 50 and 65 are now considered “economically inactive” than before the pandemic, meaning that these older workers are neither employed or seeking a job.
One would assume that this is a luxury afforded only to those in the middle and upper classes, but research from academics at The Conversation has found that the largest rise in economic inactivity post-pandemic is from workers earning roughly £18,000 to £25,000 per year in their most recent job. The industries with the largest rises in inactivity among the over-50s are wholesale and retail (40%), transport and storage (30%), and manufacturing (25%).
There are several reasons for this; these sectors were severely affected by the pandemic and there was an assumption among these workers that they were unlikely to get their jobs back. Therefore, many chose to retire early rather than seek out another job.
These are also sectors where it’s not possible to work remotely, so perhaps some older workers chose to resign out of concern for their health.
A big question on many leaders’ lips is will this group ever return to work in the future? Research from The Conversation suggests that this is unlikely to happen given that the rise in inactivity among the over-50s is already three times higher than after the last financial crisis.
Leaders should also consider the fact that this group has no desire to come back to work. Their main reasons for leaving are retirement and sickness, although the research shows that this started at least two years before the pandemic and wasn’t affected much by the pandemic itself.
It is also worth mentioning that pre-pandemic, the number of retirees was falling as workers had been retiring later in life, driven by increases in the state pension age from 65 to 66 from 2019 to 2020. This rise during and after the pandemic is, according to The Conversation, partly the emergence of a hidden trend while the state pension rose.
So what does this all mean for businesses today? Is there anything that can be done to reverse this? Because the rise in inactivity is concentrated in the lowest-income parts of the country, where the government already offers work incentives, there is a possibility that the government could extend these incentives, such as Working Tax Credits, to reach lower-middle class people to encourage them to go back to work. But considering the current economic situation, it’s unlikely this will happen.
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