Let older staff work from their second homes in Spain, says recruitment chief

Companies should let older staff choose their own hours and work from second homes in places like Spain, a leading recruitment chief has said.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), said that businesses had to offer perks to try to stop people from retiring early, a trend worsened by the pandemic.

The UK will face a shortage of workers "for at least the next decade," he warned.

Mr Carberry said: “In some cases, you may say they can work from Spain for two months. That kind of flexibility is going to be really important for companies to navigate this labour market.”

The Office for National Statistics has said there are half a million fewer 50 to 70-year-olds in work than prior to the pandemic, a phenomenon known as "the great retirement".

Mr Carberry said: “There are many fewer people in the labour force today than before the pandemic, and during the crisis you also had lower workforce mobility as fewer people were able to travel to the UK.

“To add to that situation, we have a demographic squeeze as the post-war generation retires.

“So labour supply was already likely to lower because of that - but the effects of the pandemic will make the situation even tighter.

“That has the potential to constrain economic growth and we are going to have a tight labour market for at least the next decade.”

Many businesses are already struggling to get the staff they need, after an estimated 1.2m people left the workforce during the Covid pandemic and became economically “inactive”.

It has forced employers to hike wages, with particularly hard-hit industries such as hospitality also resorting to practices such as “golden hellos” to ensure they get certain skilled staff.

Experts have speculated that the exodus of workers is the result of older people opting to retire rather than go back to work.

It is also thought to be due to long-term illness, but the exact causes of the change are still being determined.

The shrinking labour force is helping to fuel inflation, as businesses are forced to lift wages and bonuses as they compete for the same shrinking pool of recruits.

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