With over 10 million people currently out of work in the United Kingdom, the government has pledged to deliver widespread employment reform, with ambitious plans to get the country’s workforce back on track.
In November, it unveiled its ‘Get Britain Working’ white paper, which promised the “biggest employment reforms in a generation” by addressing things like health and skills to tackle workforce shortages, as well as economic inactivity.
This move will involve huge investment in young people and their job prospects, as well as those with illnesses and health conditions with the aim of shrinking the economically inactive population in the UK. But will it have the desired effect and what does it mean for UK businesses?
According to the Office for National Statistics (ONS), the UK unemployment rate for people aged 16 and over is estimated at 4.4% in November 2024 to January 2025. This is 0.3% higher than the same time period in 2023/24. In fact, the estimates are at their highest level since the summer of 2021.
It isn’t just the ONS’ unemployment estimates that are on the rise, but also the UK claimant count — the number of people claiming unemployment benefits — which currently stands at 1.78 million people.
The ‘Get Britain Working’ white paper aims to boost the UK employment rate to 80%, utilising a £240 million investment to adopt a three-tiered strategy that targets support for young people and those with long-term health conditions.
£55 million of this figure is allocated to the transformation of Jobcentres into a more modern National Careers Service for England. Funding will also go towards the ‘Youth Guarantee’, which ensures that everyone aged between 18 and 21 is given access to an apprenticeship, education or training for future employment. This is a transactional deal, though, with the young people in question being given the responsibility of taking up one of these options, or potentially missing out on some or all of their access to benefits.
Power will also be handed to local authorities, with each region of the country devising their own local ‘Get Britain Working’ plan, allowing mayoral authorities and councils to develop strategies that best suit the local demand of the area they reside over.
With the UK employment rate currently at 75% (November 2024-January 2025, ONS), the government has to find job roles for at least 5% of the population to achieve its goals set out in the white paper — but crucially, there is no set time limit on when this figure is expected to be reached.
Many may feel that this is a necessary piece of legislation to propel the workforce back to levels we were used to pre-COVID-19, but there are a number of factors that need to be considered and accounted for, beyond just opening up job opportunities for people.
A focus has been placed on people who are economically inactive as a result of ill health, so in order for this cohort of people to be given a fair chance, the overall health expectations of the country must be boosted alongside employment potential.
While this is a government-led initiative, it will require support from employers and employees alike, who are willing to be part of this significant culture change.
White paper proposals like ‘Get Britain Working’ will serve to create a larger, more diverse talent pool for employers, improving the skills of jobseekers and thus their career prospects in the process. And while hiring people always costs money, there are financial incentives in place for businesses that are committed to supporting the white paper and its goals, namely in the form of apprenticeship grants.
The focus will then turn onto employers as they seek to keep hold of these skilled employees - given that the greater knowledge base and experience someone has, the higher salary they will likely require. With a clear skills gap in the UK, this is something that will rear its head at an even grander scale once the foundations of this white paper are established.
This will present fresh challenges for businesses, though; particularly with National Insurance, National Living Wage and National Minimum Wage increases all brought in this April. These three hikes will result in increased overheads when it comes to staff costing, and must be considered when preparing for an influx of new workers based on white papers like this and their ambitions.
To manage these rising costs, businesses should stay vigilant regarding cost control and regularly conduct comprehensive reviews. Things to consider include: are suppliers still offering competitive pricing? Could upgrades in machinery or technology reduce ongoing expenses? Or are inventory management systems optimised to minimise waste?
Cash flow strategies should be strengthened too, to ensure businesses can weather the storm of rising outgoings. Finance teams could look at the possibility of introducing payment incentives to improve receivables timelines or optimise internal approval processes to speed up invoicing. Another option is to leverage short-term financing options, such as asset-based lending, to bridge gaps when necessary.
Time will tell whether the ‘Get Britain Working’ white paper will have the desired effect, but in the meantime businesses should get ahead to make sure they’re well prepared for the influx of new hires and the training they’ll require.
