IoD press release Next government must prioritise tackling rising economic inactivity

Commenting on this morning’s release of labour market statistics that showed an increase in the economic inactivity rate in the three months to May 2024, Alexandra Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:

“Employers across the country will welcome further signs that the labour market is cooling, but accessing skills remains a headache for many businesses.

“In our most recent research, almost half (45%) of business leaders cited skills and labour shortages as having a negative impact on their organisation. The further rise in economic inactivity over both the quarter and the year threatens to compound these challenges for business.

“Stabilising rising costs and bringing people back into the workplace needs to be a focus for the next government. Without action to increase domestic labour supply, strong economic growth will be all but impossible.”

Full results

418 responses from across the UK, conducted between 14-29 May 2024. 14% ran large businesses (250+ people), 19% medium (50-249), 26% small (10-49 people), 30% micro (2-9 people) and 10% sole trader and self-employed business entities (0-1 people).

Which of the following, if any, are having a negative impact on your organisation?

UK economic conditions
Skills shortages and/or labour shortages
Global economic conditions
Compliance with government regulation
Business taxes
Cost of energy
Trading relationship with the EU
Employment taxes
Difficulty or delays obtaining payment from customers
Cost/availability of finance
Transport cost/speed/reliability
Supply chain disruption
Broadband cost/speed/reliability

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The IoD supports directors and business leaders across the UK and beyond to learn, network and build successful, responsible businesses.
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