Staff shortages bite as hiring confidence soars

Hiring intentions in hospitality have grown by 15 points

The UK has seen the ‘biggest bounce’ in hiring confidence in 20 years, according to recruitment company ManpowerGroup.

Its latest Employment Outlook Survey showed a 13-point increase in the third quarter of 2021 compared to the second quarter, driven by the easing of lockdown restrictions and the retail and hospitality sectors hiring staff as they reopened.

UK growth was the strongest in any European country bar Ireland, according to Manpower, with double digit increases in hiring intentions in retail, hospitality, finance and business services.

The survey asks employers about whether they intend to add to or reduce their workforce – a positive figure indicates that more employers plan to increase hiring rather than decrease staffing levels. The current Outlook figure is +8%, the highest it has been for six years and this is the sharpest quarter on quarter increase since 2002.

Finance and business services saw its hiring intentions rise by 13 points to +8% – in mid-2020, it hit a low of -17%. Manufacturing jumped from -4% in the second quarter of this year to +5% in this quarter.

Hospitality hiring intentions grew 15 points to +8% from -7% in the second quarter of this year, a stark contrast from a low of -13% in the first quarter of 2021. Hotels and restaurants saw a 44-point swing from -18% to +26%.

Chris Gray, director for ManpowerGroup UK, said: “After the weakest twelve months for the UK’s jobs Outlook in 30 years, employers are raring to get back to normal and capture the wave of pent-up consumer demand.

“Much of this is likely to be companies making up for hiring freezes and redundancies undertaken over the past 12 months.”

Small and mid-sized businesses also showed strong growth in hiring intentions, with small employers’ confidence up by 15% and medium-sized employers up by 19%. Gray said this was a “shot in the arm” for the UK economy.

He added: “Sectors like hospitality have never experienced anything like this sudden snapback in hiring. The war for talent is hotting up. Employers are desperate to hire experienced chefs, waiting staff, retail workers and more, not least due to post-Brexit skills shortages in many of these roles.”

The company’s talent shortage survey revealed that the proportion of employers struggling to fill certain skills has more than doubled in the past two years, from 35% in 2019 to 77% in 2021. The UK has the highest proportion of skills shortages in Europe and has one of the highest globally.

This race for talent is also driving up wages, according to Gray. “In the logistics sector, we’re seeing wages for drivers increase by as much as 20%. The shortage is being felt for several reasons, many drivers have not returned as a result of Brexit and fears surrounding the next milestone in the UK’s exit from the EU on the 30th of June this will get worse. Furthermore, driver training was stalled for many months as a result of the pandemic.”

Logistics companies have “tens of thousands” of driver vacancies at the moment as staff shortages increase by 30% and employers find a balance between attractive pay offers and not passing this cost to consumers, he explained.

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