The UK labour shortage

Written by Andrea Frith

Covid-19 and Brexit has created a perfect storm to inflict a labour shortage on the UK, threatening its economic growth and attractiveness as an investment destination.

It’s said that in the UK, significant labour shortages are expected to continue over the next two years and as a result, the UK economic recovery from Covid-19 looks set to be considerably slowed.  The Confederation of British Industry (CBI) has called on the UK government ministers to take action on issues such as foreign worker visas.

I have recently read that the conclusion to the furlough scheme at the end of September 2021 would ease some of the labour shortages, but as we are now coming to the end of 2021 it seems as though that impact will be minimal. 

The worst-hit industries when it comes to staff shortages are the haulage, farming and hospitality sectors. This is putting real pressure on medium-sized businesses across the UK.   A new survey has warned that more than a quarter of the 500 companies polled said the lack of staff was putting pressure on their ability to operate at normal levels, with reduced stock – due to the resulting supply chain disruption – damaging their business.   While some firms had considered cutting production, others were planning to raise prices, leading to concerns over rising inflation as the Christmas trading period approaches.  Nearly a fifth said they were increasing wages to attract new staff, while others were introducing extra perks to lure candidates to apply for their roles.

However, there is another theory as to what has been going on; that we are simply in a temporary post-pandemic rut, and normal service will resume before long. On this account, we haven't yet recovered from the spanner that Covid has thrown in the everyday workings of our labour market.

There is an argument that the pandemic has stalled certain kinds of activity while propelling demand elsewhere. It has switched demand for retail jobs to online shopping and delivery, for example, it's taken jobs from city centre sandwich shops and put them into the suburbs where you find people working from home.

Why not contact Pertemps Managed Solutions if you are looking to increase your headcount.  We have talent pools that comprise thousands of candidates, along with market-leading search tools and methods to attract the best talent on the market.  Contact us on 0800 011 2783 or hello@pertemps.co.uk 

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