New research from Flip, the 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 (under 25) 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.”
Dan Schawbel, Managing Partner at Workplace Intelligence, adds: “The new generation gap isn’t just about age — it’s who has essential work skills and who doesn’t. The research shows many employers aren’t doing enough to pass knowledge on to younger workers before older employees retire.”
“There’s a lot of good will, with experienced workers wanting to support new hires, but no one has the time or tools they need to train effectively,” Schawbel concluded.
If businesses fail to act now, they risk long-term skills shortages that will slow growth, weaken operational efficiency, and deepen the UK’s economic challenges. For further insights and the full research findings, click here.
