News Article

BUSINESS NEWS UK - Recruiters concerned labour shortages will delay economic recovery

Posted 15th September 2021 • Written by •

The majority, or 88% of recruiters in the UK, say that labour shortages are one of their biggest concerns for the remainder of 2021, while skills shortages are a major concern for two in three (65%), according to the Recruitment and Employment Confederation.

With shortages hitting every sector of the economy and many staffing companies reporting the tightest labour market they’ve ever experienced, the REC is calling on business and the government to take urgent action to solve the problem.

According to the REC, recruiters have a significantly higher number of roles to fill than before the pandemic, with three in five (58%) having at least 30% more vacancies than pre-Covid. Almost every respondent to the REC survey (97%) said that it was taking longer than usual to fill those vacancies, compounding the problem. Half, or 50%, reported that it now takes more than a month to find suitable candidates.

Kate Shoesmith, Deputy CEO of the REC, said, “Worker shortages are a huge problem for employers and their recruitment partners, across all industries and regions. Vacancy numbers are far higher than pre-pandemic, and it is taking much longer to fill them. This is putting the recovery at risk by putting capacity constraints on the economy, as last week’s GDP figures showed. In our survey, recruiters also highlighted a wide range of factors that have combined to cause these shortages – this is a complex problem with no one easy fix.”

“Government must allow more flexibility in the immigration system so firms can hire essential workers like drivers from abroad, and also improve training opportunities for lower-paid and temporary workers,” Shoesmith added. “Meanwhile companies need to focus on how they will attract and retain staff through improved conditions and facilities, not just pay.”

Recruiters reported a number of factors were affecting their ability to source candidates. The top reason was skills shortages (cited by 65% of respondents), followed by the new immigration rules (57%) and their clients not being able to offer competitive salaries (53%).

 In response, the REC has set out a number of asks for both government and business to help solve this crisis:

  • Set up a cross-government forum including the Business, Education and Work and Pensions departments, as well as business organisations. This would restore the importance of workforce planning in the economic debate between business, government and other stakeholders, not only focusing on skills, the REC stated.
  • Broaden the apprenticeship levy and increase funding for training at lower skill levels. 
  • Allow flexibility in the point-based immigration system and a visa route for lower-skilled workers. This would allow firms in the worst-affected sectors like logistics to access staff at times of pressing need, the REC added.
  • Increased focus from businesses on workforce planning, staff engagement, attraction and retention policies. 

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