The government should introduce a temporary immigration ‘safety valve’ to help alleviate labour shortages in key sectors, the CIPD has said, after finding that two in five employers have hard-to-fill vacancies.
In a new report, the HR body argues that the government’s ambition to move to an economy that is less reliant on migrant workers will be unsuccessful unless it takes steps to address the immediate labour and skills crisis.
It finds that the current crisis is not likely ease off as businesses gradually return to pre-pandemic levels of activity. Rather, the shortages are part of a longer-term trend that predates the economic shock brought about by Covid-19.
Its survey of 2,042 senior HR professionals finds that 39% have vacancies that have been difficult to fill, only slightly above the 36% who said the same in 2019.
Urgent intervention is needed to help certain sectors fill vacancies, the report, Addressing Skills and Labour Shortages post-Brexit, states: 51% of organisations in hospitality, arts and recreation have hard-to-fill positions, followed by 49% in health and social care and 47% in manufacturing.
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Transport firms are also struggling to attract staff. In 2018 and 2019, transport employers received a median number of 50 applicants for the last low-skilled vacancy they attempted to fill, but in 2021 this had fallen to just 15.
The CIPD makes several recommendations to help alleviate staffing shortages in both the short and long term, including a temporary job mobility scheme for young EU nationals that builds on the Youth Mobility Scheme; reforming the Apprenticeship Levy into a flexible training levy, which could be put towards developing a wider range of skills that employers are in need of; and the provision of business consultancy support for SMEs on issues including workforce skills development and people management.
CIPD senior labour market adviser Gerwyn Davies said: “Changes in business behaviour, people management capability and investment priorities will take time, time that firms who are struggling with acute skill and labour shortages now simply don’t have.”
“In response, there is a strong case for an immediate immigration safety valve to address the rising labour supply challenges some employers are facing. Equally, we hope that the upcoming chancellor’s spending review recognises the need for improvement in the quality and availability of business support, to pave the way for greater investment in skills, people management capability and technology over the longer term.”
The CIPD found that many organisations experiencing recruitment difficulties do not have the resources or capability to respond to them, or think labour shortages are likely to be a temporary problem.
Asked what they are doing to mitigate the impact of staff shortages, 44% say they are upskilling staff; 26% are hiring more apprentices; 23% are raising wages; 20% are recruiting more UK graduates (20%); and 14% are improving job quality. Only 9% are planning more investment in technology.
Davies said that that too often employers in low-paying sectors saw the workforce as a “cost to manage down”. Further investment was needed to create better paid, quality jobs, he added.
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“There’s promising evidence that some employers are getting better at sourcing labour and improving job quality in response to labour shortages. Measures such as providing flexible working arrangements can also help attract and retain people and is an increasing expectation from candidates as we recover from the pandemic,” he said.
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