UK labour market set to struggle without increase in migrant workforce

The UK faces a slowdown in the supply of both skilled and unskilled labour in the next few years if there is not a significant increase in migrant workers.

A report from professional services firm KPMG warns that as baby boomers (typically born between 1946 and 1961) leave the workforce, the number of younger staff (known as Generation Y or millenniums)taking their place will lead to a ‘demographic fault line’ that will affect the supply of labour and talent.

To combat this, a much greater flow of labour from overseas will be needed to compensate, the study suggests.

Bernard Salt, a partner with KPMG in Australia and primary author of the report, said: “Without a surge in the annual intake of working-age migrants there will be a slow-down, if not a contraction, in the pool from which the labour force is drawn at the end of this decade in the US and by the middle of the next decade in the UK and many other developed markets.”

The study urges companies to adjust their resourcing and migration strategies. However, it comes as the government is rolling out a new points-based immigration system designed to limit the numbers of migrant workers coming to the UK.

In contrast, the report, The Global Skills Convergence, finds that much of the developing world including some Middle Eastern countries, Latin America and India will continue to offer a growing pool of talent.

Salt added: “Over time, large, multinational corporations will increasingly expand their head offices out of the traditional Western headquarters into the new territories of the developing world. We are going to see a change in the landscape over the course of the next few decades.”

In China, however, the report suggests the fault line will apply from the middle of the next decade, as the application of the country’s one-child policy of the mid-1970s begins to affect the labour market.

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