CBI: Labour shortages will continue for two years without action

The current labour shortages experienced by employers could last for up to two years, the CBI has warned.

The business lobbying group said the staffing crisis that has hit a number of sectors including logistics, retail and hospitality would not be solved by the closure of the Coronavirus Job Retention Scheme at the end of this month.

Tony Danker, CBI director general, warned that ongoing shortages would have a “negative impact” on the UK’s economic recovery.

The CBI accused government ministers of “waiting for shortages to solve themselves” and urged them to address short-term supply problems with an eye on long-term economic reform.

In the short-term, government should support employers by targeting support schemes such as the Lifetime Skills Guarantee and National Skills Fund to shortage occupations; introducing time-limited flexibility on the apprenticeship levy so firms can divert funds to train people for shortage roles; and temporary access to visas to allow the time for this training to have an impact and a review of the Shortage Occupation List (in particular the inclusion of HGV drivers).

Longer term, the CBI wants businesses to step up their investment in training, accelerate diversity and inclusion efforts to draw talent from under-represented groups, invest in digital transformation and automation, and consider how jobs are designed to make them attractive to jobseekers.

Danker said: “While the CBI and other economists still predict growth returning to pre-pandemic levels later this year, furlough ending is not the panacea some people think will magically fill labour supply gaps. These shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery.

“Other European countries are also experiencing staffing shortages as their economies bounce back. In the UK, many overseas workers left during the pandemic affecting sectors including hospitality, logistics and food processing. And new immigration rules make replacing those who left more complex.

“The government’s ambition that the UK economy should become more high-skilled and productive is right. But implying that this can be achieved overnight is simply wrong. And a refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.”

He argued that great economies could “walk and chew gum”, adding: “We need short-term fixes to spur recovery and long-term reforms to change our economic model.”

The CBI’s calls for reform come as care homes have reported losing staff to become Amazon warehouse pickers, with the retailer offering 30% higher rates of pay in some cases.

Anita Astle, a manager at the Wren Hall care home in Nottingham, told the Guardian that she had lost two staff to Amazon and six to better-paid jobs in the NHS. Astle told the newspaper that one staff member on £9.30 an hour was able to get £13.50 an hour picking orders for Amazon as well as a £1,000 joining bonus.

Many care home workers have objected to the government’s requirement from the end of October to be double-jabbed if they work on the front line, while Amazon and other retail employers often offer recruitment incentives due to staff shortages.

Christina McAnea, general secretary of the union Unison, said: “Widespread care home closures could be the consequence if they ignore the warnings. This would be disastrous for elderly people and those who cannot live without care support.”

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