A key focus of conversations so far has been on getting those people outside the workforce into work. Just as important, however, is stemming the flow of people leaving the workforce in the first place. This outflow has risen more sharply than the rate of returns to work, driving higher overall levels of inactivity.
With that in mind, PwC commissioned and undertook research to better understand the problem and to explore where new solutions might be found. We have heard from more than 4,000 UK adults through interviews and surveys as well as several hundred senior business leaders from major employers and SMEs.
Three perspectives
This brought together the following perspectives, understanding the challenge and opportunity from each of them will help us find a new approach to allow individuals and businesses to thrive.
Employers
“We weren't able to offer much health related support and I feel that we let them down in this instance. We've since implemented private medical insurance.”
Those in work and thinking of leaving
“I have sent my letters from occupational health to my workplace but I don't feel that any changes have been made to my work arrangements.”
Those who have already left work
“I never spoke to my employer about [my mental health] until it was too late...they may have been able to support me.”
Economic inactivity in the UK may well rise further, driven by employees leaving the workforce
One-in-ten workers is actively considering leaving work. This equates to 4.4m workers who are on the brink of leaving the labour market. A further 19% of workers say that in the past 12 months they have seriously considered leaving work for an extended period. Younger workers – aged 18-24 – are particularly at risk, with mental health a major driver.
Businesses are increasingly worried
Nearly nine-in-ten businesses report being concerned about the rise in economic inactivity. In addition, 81% of businesses say their productivity has been impacted, while 73% say the issue is affecting financial performance. This is aside from the broader impacts to public finances and the economy, such as through lower tax receipts and higher public spending.
Opportunity to reduce exits from work
While there is no universal pathway to leaving work, our research shows there are several windows of opportunity to provide more support for people before they decide to leave. While for some people a sudden event or diagnosis drives their decision, our findings show that, for most, the timeline is longer and more gradual. And during that time, a significant number of people never ask for – or receive – support. This suggests that a concerted effort by business and government to intervene earlier, and address the underlying factors driving people to leave work could make a real difference.
Businesses want to help prevent work exits
Employers see inactivity as a risk to talent they value. Encouragingly, more than half (54%) of employers are reconsidering or have reconsidered the support they have in place to prevent their employees leaving work. While there is desire to prevent work exits, over half of businesses admit being worried about recruiting people who are already inactive, with skills gaps a key concern.
The push factors driving people to leave work
The factors behind the rise in economic inactivity are various and complex, and often there is no “one single reason”. Among those individuals who were in work and left, there is a wide range of factors which led to that decision – although it is increasingly clear that ill-health, both physical and mental, is a major driver.
35%
of people left work due to unfulfilling work
42%
of 18-24 year olds left work due to mental health concerns
38%
of 35-44 year olds left work due to lack of career growth
A way forward
Our report identifies and elaborates on two key areas for further focus and consideration:
Keeping people engaged, healthy and resilient at work
Build prevention-first approach into workplace design and culture
Health support better integrated into other aspects of business
Improved communication, peer group and other social network support
Greater focus on development and skills
Employers and Government to work together on prevention-first approach eg through a Good Employer Charter
Faster in-work intervention and support once employees are at risk
Ensure workers have access to high quality, confidential support
Government to consider offering assistance to SMEs
Explore wider use of third-party providers
- Better mechanisms to identify those at risk early
- Improved communication and support for absent employees which focuses on return to work
“Coming through loud and clear in our research is the bearing confidence has on job satisfaction and broader wellbeing. Confidence at work is underpinned by many things, but one of the most significant factors – and one that employers and educators can influence – is having the skills to flourish."
Phillippa O’Connor, Chief People Officer, PwC UK
“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 work.”
Katie Johnston, Local and Devolved Government Leader, PwC UK
“Secure employment is a pillar of good mental health and many people experiencing mental illness can thrive at work, providing the right support is in place.”
Brian Dow, CEO, Mental Health UK
Contact us
Workforce Markets and Services Leader, PwC United Kingdom
Tel: +44 (0)7834 250359
