York and North Yorkshire Labour Market Analysis 2025 report
Posted on Monday 3 November 2025
The Yorkshire and the Humber Policy Engagement and Research Network (Y-PERN) Policy Fellow role is designed to strengthen collaboration between academic researchers and policy partners through two integrated functions: knowledge exchange and applied research. Funded by the Research England Development Fund, Y-PERN operates across Yorkshire and the Humber via four subregional hubs: West Yorkshire, South Yorkshire, Hull and East Yorkshire, and York and North Yorkshire (YNY). Policy Fellows embedded in these areas work closely with Combined Authorities and local policymakers, providing responsive, demand-led research capacity alongside facilitating the transfer and application of academic knowledge to regional policy challenges.
The Y-PERN Policy Fellow role for YNY serves as an important bridge between local universities, including the University of York and York St. John, and regional policymakers. This role combines knowledge exchange, connecting academic expertise to policy priorities, with research activities that respond to the evolving evidence needs of the Combined Authority. The wider Y-PERN network further expands access to expertise from universities across Yorkshire and the Humber, enabling collaborative workshops and initiatives aligned with the Combined Authority’s strategic interests.
This collaborative approach benefits universities by fostering closer partnerships with local authorities and offering academics the opportunity to apply their research to regional challenges, thereby enhancing their impact and engagement. At the same time, the region benefits from timely access to relevant academic insights, supporting policy decisions grounded in robust evidence. This mutually advantageous relationship ensures that research outputs are closely aligned with practical needs and contributes to regional growth and well-being.
In YNY, the Combined Authority required a comprehensive labour market analysis to inform strategic economic planning and regional priorities, such as those present in the region’s local growth plan. This plan, developed in line with the government’s 2024 Devolution White Paper, sets out a ten-year vision for sustainable economic growth in the region. YNYCA is also leading delivery of the Get Britain Working Economic Inactivity Trailblazer, a national programme aimed at reducing economic inactivity.
Through the research capacity element of the fellowship, this detailed labour market analysis was developed in a timely manner, allowing the Combined Authority to respond effectively to its changing needs. The analysis covered the regional business landscape, employment trends, pay, and economic inactivity, followed by assessments of skills demand, supply, and gaps. This evidence base supports targeted policy interventions aimed at addressing structural imbalances in the labour market and fostering sustainable economic growth.
The full report is listed under the evidence base to the Local Growth Plan: York and North Yorkshire's Local Growth Plan > Mayoral Combined Authority
Key findings
The YNY economy is characterised by a high number of small enterprises, a strong rural sector, and a relatively skilled but unevenly utilised workforce. The area has 47.7 businesses per 1,000 residents, well above the national average, though growth has been modest at 5.2% between 2015 and 2024. Productivity lags the English average, with YNY’s Gross Value Added (GVA) per hour at £37.40 versus £40.30 nationally, in part because of its dependence on lower-productivity industries such as agriculture, tourism, and hospitality. While these sectors provide stability and employment, there may be comparatively limited wage growth and productivity gains compared to other sectors such as finance or information technology.
Employment is strong at 79%, higher than the national rate, and unemployment is low at 1.8%. However, pay is below the England average (£667 vs £732 weekly), and the gap widens at higher income levels, discouraging the retention of high-skilled workers. Commuting patterns show that many residents work outside the region. Early retirement and long-term sickness contribute to higher economic inactivity compared to national levels.
YNY’s education and qualification profile is strong, with 48% of residents holding Level 4 or higher qualifications, slightly above the national average. However, there are marked local differences: York has a highly qualified workforce, while areas such as Scarborough and Richmondshire lag behind. Despite the presence of strong higher education institutions, graduate retention remains weak across YNY, and apprenticeships are concentrated at lower levels. Among the economically inactive, 29% have no qualifications, but an equal 29% hold Level 4+ qualifications, indicating a pool of untapped talent.
The region’s labour market reflects inefficiencies in making full use of available skills. Although YNY has many skilled workers, there are too few high-value roles to absorb them, pointing to underutilisation and outward commuting. Around 39% of employers report that staff skills are underused, alluding to unmatched job design and workforce planning.
At the same time, a 15% skills gap exists, representing nearly 6,000 employees who need additional training to meet job demands. This shortfall is most pronounced in digital and analytical skills. Employers also struggle to fill 25% of vacancies due to skill shortages, particularly in professional, technical, and trade occupations. Recruitment is further constrained by low interest in certain job types, limited applicant pools, and challenges such as remote locations and poor transport connectivity.
YNY face a structural imbalance in their labour market. While the region is home to a well-qualified population, too few high-skilled and high-value jobs exist to retain this talent. Meanwhile, employers in key sectors cannot find workers with the specialised or technical skills they require. This mismatch between workforce qualifications and local job opportunities results in both underutilised talent and recruitment difficulties.