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UK workforce crisis looms as mass retirement threatens £ 28 billion productivity loss
The UK is on the brink of another workforce crisis, with more than three-quarters( 78 %) of managers lacking confidence in their company’ s ability to prepare for future skills gaps. As over half( 57 %) of the UK’ s most experienced frontline workers near retirement in the next five years, 68 % of managers fear that vital expertise will be lost when they exit, creating a generational skills vacuum – one that could cost the UK retail sector alone £ 28 billion in lost productivity.
New research from Flip, a frontline employee super-app, in partnership with Workplace Intelligence, warns that a wave of retirements is set to drain businesses of their most experienced and capable employees – particularly in retail and manufacturing, two industries critical to the nation’ s economy.
The latest CIPD Labour Market Outlook echoes these concerns, naming retail as the hardest-hit sector for declining recruitment and employee engagement. At the same time, employer confidence has fallen sharply, with nearly a third planning job cuts through redundancies or reduced hiring.
The global study, which included 500 UK frontline managers and employees in manufacturing and retail reveals a stark reality about the state of skills on the front line:
• Employees spend an average of more than 12 hours per week, or nearly four months annually, helping colleagues who lack critical skills( including teaching coworkers, correcting mistakes and troubleshooting tech)
• Skills shortages are already cutting into productivity. Nearly three in four( 72 %) managers say that gaps in expertise are actively reducing their team’ s efficiency
• With 73 % of managers admitting they rely on a handful of experienced workers to keep operations running, businesses are at risk of bottlenecks and burnout
• The‘ brain drain’ is accelerating as 81 % of UK managers say most technical expertise sits with older employees, making their nearing departure a critical risk to business continuity
The research exposes a deepening generational divide that threatens to create a dual-generation talent vacuum. While experienced workers hold critical operational knowledge, they lack the time and tools to transfer it effectively to younger colleagues. Meanwhile, 92 % of UK managers report that Gen Z employees lack all the technical skills needed to perform effectively.
This disconnect is also pushing younger talent away: more than half( 57 %) of Gen Z frontline workers feel their skills go unrecognised due to their age, and 63 % believe they need to leave their industry to advance their careers, a troubling indication that businesses are failing to nurture and retain their future workforce.
“ Industries that form the backbone of our economies are facing a cliff edge when it comes to critical skills,” said Benedikt Brand, Co-founder and CEO of Flip.“ It’ s vital that businesses capture the invaluable expertise of retiring employees and make meaningful investments into developing the Gen Z employees who make up their future workforce. Without seamless knowledge transfer between generations, productivity will stall and these essential industries will suffer.” x
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