Nine out of ten recruiters (88%) say that labour shortages are one of their biggest concerns for the remainder of 2021, while skills shortages are a major concern for two thirds (65%).
It follows yesterday’s data from the Office for National Statistics (ONS) that job vacancies have risen above one million for the first time since records began and now far exceed pre-pandemic levels.
With people shortages hitting every sector and many staffing companies reporting the tightest labour market they have ever experienced, the Recruitment & Employment Confederation (REC) is calling on business and the government to take urgent action to solve the problem.
Recruiters told the REC they 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 vacancies, compounding the problem. Half (50%) reported that it now takes more than a month to find suitable candidates.
Kate Shoesmith, deputy CEO of the REC, said: “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.”
She added: “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. Meanwhile companies need to focus on how they will attract and retain staff through improved conditions and facilities, not just pay.”
In real terms, ONS data last month shows that pay is now growing much faster rate than inflation, at 6.6% for total pay and 5.2% for regular pay, although rates are affected by “compositional and base effects” and should be interpreted with caution.
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 recruiters’ clients being unable to offer competitive salaries (53%).
Kate Nicholls, CEO of UKHospitality said: “A collaborative approach must be taken to tackle the causes of these. Some of these measures will be long-term – through reforms to education, careers advice and training – but government also has the opportunity to look at shorter-term issues, such as the operation of the Kickstart scheme and immigration policy post-pandemic.”
The REC has four key recommendations for government and business to help reduce staff shortages:
- Set up a cross-government forum including the departments of business, education, and work and pensions, as well as business organisations
- Broaden the apprenticeship levy and increase funding for training at lower skill levels. This would improve progression and transition opportunities for lower-skilled and temporary workers who need them most, and encourage business to do more in the UK, not less
- Allow flexibility in the point-based immigration system and a visa route for lower-skilled workers, which would allow firms in the worst-affected sectors like logistics to access staff at times of pressing need
- Increased focus from businesses on workforce planning, staff engagement, attraction and retention policies. Firms need to raise workforce planning up to the senior leadership level, and work with key professional partners like recruiters to boost performance, productivity and staff wellbeing.
Recent research from British Future found increasingly positive public opinion towards immigration. Two thirds of the public (65%) agree that employers should be allowed to recruit from overseas for roles in shortage – showing that a more flexible immigration system would be popular as well as helping businesses to fill crucial vacancies.
Sally Gilson, policy manager for skills at the Road Haulage Association, said: “There is an immediate need for fully-qualified HGV drivers that can only be fulfilled by temporary visas if we are to keep the supply chain running through peak time. Significant investment is being made by businesses to train UK workers, however a lack of funding within lower-level qualifications has limited the ability for people to upskill and retrain. Government needs to invest in all qualification levels, not just level 3 and above.”
The REC surveyed 191 recruitment professionals between 12 August and 10 September 2021.