What does the rising economic activity rate mean for employers?

More than a fifth of UK adults were not actively looking for work between November and January, according to figures published today by the Office for National Statistics (ONS).

The country’s economic inactivity rate was 21.8% over that period, a year-on-year increase, with 9.2 million people aged 16-64 not in work or not looking for a job.

That’s 700,000 more people than were in the same position pre-pandemic, sparking concerns over how worker shortages will affect the economy – and UK employers.

According to employee engagement expert Frank Creighton at Love2shop, the UK’s leading reward and recognition brand, employers must be proactive in their response.

The Director of Business Development said: “An increasing economic inactivity rate means there are fewer opportunities for employers to acquire talent, making it increasingly important for them to maintain morale and productivity among their current workforce.

“One of the keys to nurturing a motivated and galvanised workforce is by recognising the effort that employees put in. This can be done in a variety of different ways, from acknowledging good work to providing tangible appreciation.

“In the current economic climate, it’s increasingly clear that rewards and incentives play a central role. By showing employees they are truly valued, employers can make significant steps towards retaining the talent that they need to achieve success.

“This is played out in our data, which reveals an issue in the UK when it comes to morale and productivity, with almost a fifth of employees, around 5.5 million people, reporting they feel undervalued at work.

“Meanwhile, more than half of employees – around 17.2 million people – say their productivity increases when they feel valued, while almost nine in ten said they would feel more valued if their boss surprised them with a multi-retailer gift card as a spontaneous gift.

“While the current climate and an increasing economic inactivity rate do present businesses with certain difficulties, it’s possible to weather the storm and overcome them with the right approach to staff recognition.”