The UK is on the brink of another workforce crisis, with more than three-quarters (78%) of managers lacking confidence in their company’s ability to prepare for future skills gaps. As over half (57%) of the UK’s most experienced frontline workers near retirement in the next five years, 68% of managers fear that vital expertise will be lost when they exit, creating a generational skills vacuum – one that could cost the UK retail sector alone £28 billion in lost productivity.
New research from Flip, a frontline employee super-app, in partnership with Workplace Intelligence, warns that a wave of retirements is set to drain businesses of their most experienced and capable employees – particularly in retail and manufacturing, two industries critical to the nation’s economy.
The latest CIPD Labour Market Outlook echoes these concerns, naming retail as the hardest-hit sector for declining recruitment and employee engagement. At the same time, employer confidence has fallen sharply, with nearly a third planning job cuts through redundancies or reduced hiring.
The global study, which included 500 UK frontline managers and employees in manufacturing and retail reveals a stark reality about the state of skills on the front line:
- Employees spend an average of more than 12 hours per week, or nearly four months annually, helping colleagues who lack critical skills (including teaching coworkers, correcting mistakes and troubleshooting tech)
- Skills shortages are already cutting into productivity. Nearly three in four (72%) managers say that gaps in expertise are actively reducing their team’s efficiency
- With 73% of managers admitting they rely on a handful of experienced workers to keep operations running, businesses are at risk of bottlenecks and burnout
- The ‘brain drain’ is accelerating as 81% of UK managers say most technical expertise sits with older employees, making their nearing departure a critical risk to business continuity
The research exposes a deepening generational divide that threatens to create a dual-generation talent vacuum. While experienced workers hold critical operational knowledge, they lack the time and tools to transfer it effectively to younger colleagues. Meanwhile, 92% of UK managers report that Gen Z employees lack all the technical skills needed to perform effectively.
This disconnect is also pushing younger talent away: more than half (57%) of Gen Z frontline workers feel their skills go unrecognised due to their age, and 63% believe they need to leave their industry to advance their careers, a troubling indication that businesses are failing to nurture and retain their future workforce.
“Industries that form the backbone of our economies are facing a cliff edge when it comes to critical skills,” said Benedikt Brand, Co-founder and CEO of Flip. “It’s vital that businesses capture the invaluable expertise of retiring employees and make meaningful investments into developing the Gen Z employees who make up their future workforce. Without seamless knowledge transfer between generations, productivity will stall and these essential industries will suffer.”
