The recruitment crisis across the UK shows no sign of slowing, with over 1 million job vacancies and not enough people to fill them. This shortage not only impacts the now and short term, but also impacts the country in the long run – shortages could mean that we see a fall in productivity by 2027, which could damage the economy and cost billions of pounds.
The worst affected industry is construction, with logistics and hospitality close behind. The labour shortages are also prevalent in the care industry which, along with other contributors, is causing record NHS waiting lists.
Causing of Labour Shortages
The end of free movement following Brexit is one of the challenges faced by UK recruiters, impacting the labour market. The labour shortages are highest in jobs that relied heavily on EU workers pre-pandemic, such as hospitality, with outmigration reducing the number of workers available.
Recovering from the pandemic has influenced the shortage of labour. Foreign workers have moved back to their country of origin. The pandemic also led to the end of many part-time jobs. In addition to this, many felt demoralised at work with low pay and pressure during the pandemic, leading them to leave their job and even the industry that they were in itself.
Following on from this, in the last few years the country has seen an increase in people changing careers for a multitude of reasons – wanting improved salaries, increased job security or more flexibility with remote working opportunities.
Over 450,000 people are now classed as ‘economically inactive’, meaning that they are not in work or looking for work. A large number of these people are those over 50 years old who have retired – some of which are retiring early.
Luckily, it isn’t all doom and gloom. One positive is that evidence shows that businesses are progressively adjusting to the challenges posed by the labour market, with many reducing their need for workers by using automation processes.
What’s more, it’s important to note that this issue isn’t affecting just the UK – unemployment has reached 2.8% in Germany with an increase seen in other European countries too.
Tackling Labour Shortages
Advice from recruiters, the government and specialist groups suggest that companies should look outside of their current recruitment practices, extending the scope of their search to include non-traditional pools of talent, which helps to fill vacancies and also promotes diversity and inclusion.
Employers should modify their approach to recruitment, offer higher wages and offer more flexibility, and think more creatively on the talent they’re trying to attract, to see improvements in the labour shortage. They should also focus on upskilling to ensure that the business has in-house expertise to take on everyday challenges.
A Final Word
Unemployment remains near historic lows whilst inflation adjusted earnings continue to drop too. The government is under pressure to help UK companies with the labour crisis.