Tuesday, May 17

UK employers face worst labor shortage since 1997 | Deal

British employers are struggling with the worst staff shortage since the late 1990s, amid the rush to reopen after the lockdown and a sharp drop in overseas workers due to Covid and Brexit.

Sounding the alarm about the risks to economic recovery from the acute labor shortage, the Confederation of Recruitment and Employment (REC) and accounting firm KPMG said the number of available workers plummeted in June at the fastest pace. since 1997.

Hiring companies are reporting hiring challenges in various sectors of the economy, led by deficits in areas such as transportation and logistics, hospitality, manufacturing, and construction.

In addition to the problems hiring chefs, cooks, cleaners and warehouse staff recorded in previous months, the snapshot indicated that problems for employers were spreading to typically higher-paid sectors such as finance, IT, accounting and engineering.

“We need action from business and government to retrain and upgrade the skills of unlicensed workers and future workers now more than ever, as the growing skills gap in the workforce has the potential to slow the recovery. UK economy, “said Claire Warnes, Director of Education, Skills and Productivity at KPMG UK.

The rush to reopen after pandemic restrictions is causing bottlenecks. Employers are encountering additional complications as fewer EU workers travel to Britain due to Covid-19 border controls and post-Brexit government immigration rules.

According to the REC and KPMG survey of more than 400 recruitment companies, a sharp increase in recruitment demand led to an unprecedented drop in candidate availability in June. Recruiters noted that increased hiring, Brexit, uncertainty related to the pandemic and the licensing plan affect the number of available job applicants.

Official figures show about 1.5 million workers are still on leave with pandemic restrictions still limiting full return to work, after the government pushed back the date for the end of most pandemic restrictions to July 19 and the Delta variant fueled the surge in infections.

Rishi Sunak started cutting the billion-pound jobs plan last week, which is due to close at the end of September. At its peak, nearly 9 million jobs were suspended during the first wave of the pandemic, with about 5 million in the wave in January this year.

Unemployment in the UK has fallen in recent months as companies scrambled to hire, dropping to 4.7%, or around 1.6 million people. The Bank of England forecasts that unemployment would rise to 5.5% after the leave ends. However, this is significantly below last year’s expectations that Covid-19 would increase job losses at the fastest rate since the 1980s, leading to 12% unemployment.

In a sign of mounting pressure on companies, British Chamber of Commerce polls released on Thursday showed that 70% who had tried to hire staff in the three months to June had trouble doing so.

According to the survey of 5,700 companies, 52% said they tried to hire during the three months to June. The sectors with the greatest problems for hiring workers were construction, hospitality and catering and manufacturing.

Jane Gratton, head of people policy at BCC, said part of the problem for employers was that the skills shortage that had existed in Britain before the pandemic was becoming apparent once again as the economy reopened. “The encouraging increase in job creation in the manufacturing and services sectors is being held back by hiring difficulties at all levels, jeopardizing growth and productivity,” he said.

An estimated 1.3 million non-British workers have left the country during the pandemic. Business leaders said easing post-Brexit immigration rules could help address the shortage, but they also called for more investment in government skills and training to increase the number of domestic candidates.

Employment experts believe that people are being kicked out of work in certain sectors that have developed a reputation for low wages and poor conditions in recent years, and that concerns about continued high rates of Covid-19 are also having an impact. .

Sustained labor shortages could lead employers to raise wages, which in turn could lead to higher inflation if companies raise their prices to accommodate higher wage costs. However, there is debate over whether bottleneck pressures as the economy reopens from the lockdown will translate into a permanently tighter labor market.

Neil Carberry, CEO of REC, said: “The job market is improving at the fastest rate we’ve ever seen, but it is still an unpredictable time. We cannot yet say to what extent the completion of the license and the increased confidence of the candidates will help meet this growing demand for staff. “


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