The United Kingdom's labour market has undergone significant shifts in recent years, influenced by a combination of long-term structural changes and short-term disruptions, including Brexit, the COVID-19 pandemic, and global economic conditions.
As of 2025, the UK’s economy faces a tight labour market characterised by high job vacancy rates, particularly in low-wage and high-skill sectors. The shortage of workers is not uniform; it varies by region, sector, skill level, and demographic group.
Technological adoption and changing worker expectations, especially around remote and flexible work, have further reshaped the dynamics of labour supply and demand. In this article, we detail the key trends, statistics, and underlying areas driving the UK’s labour shortages.
The employment rate in the UK is 75.1% as of Q2 2025 – Office for National Statistics
The unemployment rate stands at 4.8% in Q2 2025 – Office for National Statistics
Economic inactivity rate (people not working and not actively seeking work) was 21% – Office for National Statistics
Total job vacancies across the UK were 717,000 in Q2 2025 – Office for National Statistics
Payrolled employees in the UK were estimated at 30.3 million as of September 2025 – Office for National Statistics
Annual growth in employees' average regular earnings (excluding bonuses) was 4.7% in 2025 – Office for National Statistics
Annual growth in total earnings (including bonuses) was 5.0% in 2025 – Office for National Statistics
Full-time employment between June and August 2025 was 25.56 million, while part-time employment was 8.66 million - The House of Commons Library
There are 29.62 million employee jobs and 4.42 million self-employed jobs in the UK - The House of Commons Library
There are 2.4 million unemployed persons for every job vacancy in the UK - The House of Commons Library
1.69 million people claimed unemployment-related benefits as of September 2025 - The House of Commons Library
18% of businesses with 10 or more employees reported labour shortages as of May 2025 – Office for National Statistics
The highest worker shortages were in transportation & storage, health & social work, and accommodation and food services – Office for National Statistics
20.7% of businesses in construction reported shortages in 2022 – House of Commons Library
The food and drink manufacturing sector had a 3.9% vacancy rate in Q1 2025 – Food & Drink Federation Report
38% of firms said labour shortages prevented growth or new business – CBI Skills Survey
There are over 106,000 vacancies in the NHS workforce in England as of Q3 2024/25, including 27,000 nursing positions – Statista
The number of green jobs has grown by 34.6% since 2015, increasing by about 177,600 jobs – Office for National Statistics
95% of UK space sector organisations reported facing workforce skills challenges, with 72% of roles proving hard to recruit for - Space Sector Survey 2023
The construction and home improvement sectors will need 1.3 million skilled workers and 350,000 apprentices over the next decade – Checkatrade’s UK Trade Skills Index 2024
The highest employment rate in the UK was in the South West at 79.5%, while the lowest was in the North East at 68.8% – Office for National Statistics
The highest unemployment rate was in the West Midlands at 6.2%, and the lowest was in Northern Ireland at 2.6% – Office for National Statistics
The highest economic inactivity rate was in Northern Ireland at 26.9%, while the lowest was in the South West at 17.5% – Office for National Statistics
The number of payrolled employees decreased in all UK regions except Northern Ireland, where it increased by 1.0% compared with the previous year – Office for National Statistics
54% of employers in Northern England reported difficulties hiring staff – CIPD 2024
London and the South East showed significant regional labour market imbalances with higher unemployment and lower inactivity, respectively – Office for National Statistics
Employment in central government was a record high at 4.04 million in June 2025, mainly due to NHS growth and academy school conversions - Office for National Statistics
There are an estimated 6.17 million people employed in the UK public sector - Office for National Statistics
NHS employment hit a record high of 2.07 million in June 2025 - Office for National Statistics
In the year ending December 2024, 948,000 people migrated to the UK, while 517,000 emigrated, resulting in a net migration of 431,000 – Office for National Statistics / House of Commons Library
Non-EU nationals accounted for 81% of total immigration, while EU nationals made up 13% and British nationals 6% – House of Commons Library
The main reasons for long-term immigration to the UK were study, work, humanitarian protection, and family – House of Commons Library
Around 266,000 people came to the UK to study and 262,000 came for work in the year ending December 2024 – House of Commons Library
Skilled worker visas remained the largest category of work-related immigration, with 85,000 visas granted to main applicants in 2024, including 27,000 in health and social care occupations – House of Commons Library
By the end of 2024, there were approximately 3.4 million EU-born and 8.0 million non-EU-born residents in the UK, together making up 18% of the total population – House of Commons Library
The largest non-UK nationalities living in the UK were Indian (around 920,000), Polish (around 700,000), and Pakistani (around 600,000) – House of Commons Library
In 2024, the UK issued 375,000 work-related visas, with the health and care sector accounting for 50% of all main applicants under the Skilled Worker route – House of Commons Library
Between 2021 and 2024, work-related migration increased significantly, while arrivals for study declined following changes in post-study visa rules – House of Commons Library
In 2024, the UK received 94,400 asylum applications, of which 65% were from nationals of countries such as Afghanistan, Iran, and Eritrea – House of Commons Library
As of December 2024, adult migrants accounted for 19% of all UK employees, representing approximately 5.75 million workers – Migration Observatory
Unemployment rates among migrants have consistently been higher than among the UK-born population over the past two decades – Migration Observatory
In March 2025, 15% of individuals receiving Universal Credit were non-UK, non-Irish nationals – Migration Observatory
Employment rates among migrants also differ by reason for migration. Non-EU-born asylum seekers were significantly less likely to be in employment compared with those who migrated for work, study, or family reasons – Migration Observatory
Migrant workers are concentrated in specific sectors, including administrative services, hospitality, and health and social care – Migration Observatory
Workers born in North America and Oceania were most likely to be employed in high-skilled occupations, while those born in EU8 and EU2 countries were more likely to work in low-skilled roles – Migration Observatory
In terms of pay, non-EU and UK-born employees had similar annualised median earnings as of December 2024, while EU-born workers earned slightly more on average – Migration Observatory
Overqualification remains a challenge, with many highly educated migrants working in roles that do not match their skill levels – Migration Observatory
Foreign-born workers were also more likely than UK-born workers to be employed in non-permanent roles and to work during night shifts – Migration Observatory
62% of organisations in the UK face skill shortages - British Chamber of Commerce and the Open University Report
27% of all job vacancies in the UK are due to skills shortages - Statista
7.1 million people in the UK lack essential digital skills needed for the workplace - Lloyds Bank/IPSOS MORI Report 2025
Skills shortages caused 45.1% of job vacancies in the UK construction sector - Statista
Public administration had the lowest share of skills shortage vacancies at 6.6% - Statista
The Midlands has the highest level of skills shortages, followed by the North of England and South of England - British Chamber of Commerce and the Open University Report
The most frequently cited roles with skills shortages were engineers (mechanical, electrical, software, and project) - British Chamber of Commerce and the Open University Report
68% of organisations in the UK say skill shortages have increased the workload on existing staff - British Chamber of Commerce and the Open University Report
75% of manufacturers in the UK cite shortage of skills as their biggest barrier to growth - Barclays Insights
Around 49% of engineering and technology businesses struggle to hire because of skills shortages - UK Parliament
STEM skills shortages are estimated to cost the UK economy £1.5 billion each year - UK Parliament
56% of employers identified the need for digital literacy as a priority - British Chamber of Commerce and the Open University Report
Establishments in the Hotels and Restaurants, Financial Services and Wholesale and Retail sectors are more likely to provide on-the-job training - Department of Education Employer Skills Survey 2022
In June to August 2025, there were 655,000 young people aged 16 to 24 who were unemployed, an increase of 61,000 from the previous year – House of Commons Library
The unemployment rate for young people is 14.5% – House of Commons Library
There were 3.88 million young people aged 16 to 24 in employment, an increase of 138,000 from the previous year – House of Commons Library
There were 2.92 million young people aged 16 to 24 who were economically inactive, 77,000 fewer than the previous year – House of Commons Library
The inactivity rate for young people was 39.2%, down from 40.9% the year before – House of Commons Library
In 2024, around 872,000 young people aged 16 to 24 in the UK were not in education, employment, or training (NEET), representing 12.2% of all young people - Youth Employment 2024 Outlook
Among 18 to 24-year-olds, the NEET rate was 14.5%, compared with 4% for 16 to 17-year-olds - Youth Employment 2024 Outlook
The proportion of young people who are NEET has risen by more than 25% since 2021 and remains higher than before the pandemic - Youth Employment 2024 Outlook
The North East had the highest NEET rate at 15%, while the South West had the lowest at 9.4% - Youth Employment 2024 Outlook
By ethnicity, 25% of Black Caribbean young people were NEET, compared with 13.9% of Pakistani young people and 10.9% of White British young people - Youth Employment 2024 Outlook
More young men (13.5%) were NEET than young women (10.8%) in 2024 - Youth Employment 2024 Outlook
Young people with disabilities were more likely to be NEET (23.9%), and care leavers had the highest rate at 38% - Youth Employment 2024 Outlook
Mental health challenges are a growing barrier to employment. Around 34% of young people aged 18 to 24 experienced a common mental health condition such as anxiety or depression, a 42% rise since the mid-2010s - Youth Employment 2024 Outlook
The number of young people out of work due to ill health doubled over the past decade, from 93,000 in 2013 to 190,000 in 2023 - Youth Employment 2024 Outlook
Among NEET young people with a mental health condition, 85% said it affected their ability to find or keep a job - Youth Employment 2024 Outlook
There were 176,500 apprenticeship starts in England, including 77,700 under 19 and 98,800 aged 19 to 24 - Youth Employment 2024 Outlook
Young people identified several main barriers to employment: lack of training or experience (41%), low wages (38%), limited employment support (33%), poor mental health (32%), and a lack of suitable job vacancies (31%) - Youth Employment 2024 Outlook
The UK’s NEET rate of 12.5% is below the OECD average of 14.3%, but still higher than leading countries such as the Netherlands (4.4%) and Germany (8.9%) - Youth Employment 2024 Outlook
There were 16.64 million women and 17.58 million men in employment – The House of Commons Library
The employment rate for women was 72.4%, and for men it was 77.9% – The House of Commons Library
Unemployment and employment rates were both slightly higher for men than for women, although the gap in unemployment rates was very small – The House of Commons Library
Economic inactivity remained higher among women at 24.2%, compared with 17.8% for men – The House of Commons Library
The total employment rate for people aged 16 to 64 was 75.1%, up from 75.0% the year before – The House of Commons Library
Employment among women rose by 225,000 over the year, and employment among men increased by 248,000 – The House of Commons Library
The employment gap between men and women has been narrowing in recent years, mainly because more women have moved from economic inactivity into work – The House of Commons Library
Rising employment rates for women have also been influenced by changes to the State Pension age – The House of Commons Library
The gender pay gap stood at 7.0%, down from 7.5% – Office for National Statistics
The gender pay gap is wider for employees aged 40 and over than for those under 40 – Office for National Statistics
Higher earners experience a larger gender pay gap than lower-paid employees – Office for National Statistics
The gender pay gap was highest in skilled trades occupations and lowest in caring, leisure, and other service roles – Office for National Statistics
The gender pay gap among full-time employees was higher in all English regions than in Wales, Scotland, or Northern Ireland – Office for National Statistics
Employees’ average regular pay (excluding bonuses) grew by 4.7% in the year to 2025, while total pay (including bonuses) rose by 5.0% – Office for National Statistics
After accounting for inflation, regular pay increased by 0.6% and total pay by 0.8% when measured using CPIH – Office for National Statistics
Real regular pay rose by 0.9% and total pay by 1.2% – Office for National Statistics
Pay grew faster in the public sector (6.0%) than in the private sector (4.4%), partly because some public sector pay rises were made earlier in 2025 – Office for National Statistics
Outside the public sector, the strongest pay growth was in wholesaling, retailing, hotels, and restaurants – Office for National Statistics
In August 2025, around 14% of workers in Great Britain worked from home full-time, while 22% worked partly from home and partly travelled to work - Statista
About 41% of workers only travelled to a workplace - Statista
Hybrid working has become more common than fully remote work - Statista
Only 6% of workers in the accommodation and food services sector mainly worked from home, the lowest of any industry - Statista
Men were slightly more likely than women to mainly work from home - Statista
The number of UK employees able to work flexible hours rose from 3.2 million in 2013 to around 4.2 million by 2024 - Statista
Most workers said flexible working helped them achieve a better work-life balance, with 41% saying it made commuting easier - Statista
Around 31% of hybrid workers have at least one additional job, compared with 29% of in-office workers and 8% of fully remote workers - Owl Lab Study
Remote work adoption was highest in the IT sector - Yomly
Digital infrastructure gaps limited remote work opportunities in rural areas – Ofcom Report 2024
23% of businesses are currently using some form of artificial intelligence (AI) technology as of late September 2025 - ONS
4% of businesses that currently use some form of AI technology reported that their overall workforce headcount had decreased as a result of using those technologies - ONS
60% of employers expect broad technological trends, including AI and robotics, to be transformative for their businesses by 2030 – World Economic Forum Report
9% of UK businesses use artificial intelligence (AI), while 69% use cloud-based computing systems and applications - ONS
Large service firms were most likely to use AI, while large manufacturing firms were most likely to use robotics - ONS
Businesses that adopted new technologies had 19% higher turnover per worker than those that did not - ONS
Around 88% of top-performing firms had adopted at least one advanced technology such as AI, cloud computing, or robotics - ONS
39% of businesses in the UK admit that the main barriers to adopting AI were not knowing how to use it effectively, while 21% admit cost - ONS
50% UK workers fear job displacement due to automation – The Guardian Insights
The UK's AI industry has grown to include more than 5,800 AI companies - Department for Science, Innovation, and Technology
Based on key stats identified in this piece, several key trends are expected to shape the UK labour market in the coming years.
Labour Shortages Will Persist Across Key Sectors
Despite government and business efforts, shortages are expected to persist in healthcare, construction, and technology due to demographic shifts and evolving skill demands.
Skills and Training Gaps Will Widen
Without major reforms in education and vocational training, the mismatch between available skills and employer needs will grow, especially in digital and STEM fields.
Immigration Policy Will Remain Crucial to Workforce Supply
Post-Brexit immigration controls will continue to affect labour availability, making flexible immigration routes and attracting global talent vital to filling gaps.
Remote Work and Flexibility Will Shape Labour Market Participation
Flexible working arrangements and remote roles will drive higher labour market participation.
Technology and Automation Will Reshape Job Demand
Increased adoption of AI and automation will create new roles, particularly in tech and data, but may also displace routine jobs, emphasising the need for reskilling.
Wage Growth and Working Conditions Will Face Pressure
Inflation and labour shortages will keep wage growth under pressure, with employers balancing pay rises and improving working conditions to retain staff.
The UK labour market is structured around the working-age population (typically defined as ages 16 to 64). This population is divided into two broad categories:
Economically Active
Economically Inactive
This group includes individuals who are either employed or unemployed but actively seeking work. It forms the basis for calculating the labour force.
a. Employed
People are considered employed if they meet any of the following conditions:
Have done at least one hour of paid work in the reference week (including casual or part-time work).
Are temporarily away from their job (e.g., on leave, sick, or furloughed).
Are self-employed or in government-supported training schemes.
Key Measures:
Employment Rate: Proportion of people aged 16 to 64 who are in employment.
Average Weekly Earnings (AWE): Tracks the average gross pay received by employees before tax and other deductions. It includes base pay and bonuses, and is influenced by workforce composition.
b. Unemployed
People without a job are considered unemployed if:
They have actively sought work in the past four weeks, and they are available to start work within the next two weeks.
Key Measures:
Unemployment Rate: The proportion of the economically active population (employed + unemployed) who are unemployed.
Claimant Count: Measures the number of people claiming benefits due to unemployment, including Jobseeker’s Allowance and Universal Credit (searching for work group). Not all unemployed individuals are claimants.
2. Economically Inactive
People in this group are not in employment and not actively seeking or available for work. Reasons may include:
Full-time education
Long-term illness or disability
Caring responsibilities
Retirement before pension age
Discouragement due to a lack of opportunities
Key Measures:
Economic Inactivity Rate: The proportion of people aged 16 to 64 who are economically inactive.
3. Vacancies
Vacancies refer to positions that employers are actively seeking to fill from outside their organisation. They are a key indicator of labour demand.
The UK labour market is facing significant challenges due to persistent labour shortages, skills gaps, and changing workforce dynamics. Addressing these issues requires coordinated efforts between the government, employers, and education providers.
Investments in training and immigration reform are essential to support economic growth and ensure a resilient labour supply. Without timely action, labour shortages could hinder productivity and limit opportunities for many workers nationwide.
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