As the economy recovers from the pandemic, demand for labour has risen significantly. In the Chamber’s Quarterly Economic Survey for Q2, in partnership with Bishop Fleming, we found that 51% of local businesses attempted to recruit, up from 38% in Q1. Recent figures released by the Office for National Statistics showed the biggest increase in payroll employees since the start of the pandemic.
As demand has increased, so has the number of businesses experiencing recruitment difficulties. 62% of businesses who tried to recruit in Q2 struggled to do so.
The skills shortage is affecting a range of sectors. For example, we are hearing anecdotally that hospitality businesses are having to limit their opening hours and manufacturers are struggling to recruit for technical and semi-skilled roles.
The Road Haulage Association estimates there is now a shortage of more than 100,000 HGV drivers in the UK. In response, the government has announced a package of measures to support recruitment and retention in the industry. The announcement came after the government temporarily relaxed Drivers’ Hours rules until 8 August, a move that concerned the industry due to safety standards.
The reasons for skills shortages are complex and varied. The Road Haulage Association found the three most important reasons for driver shortages are an ageing workforce, European drivers leaving the UK and changes to IR35 rules.
While some recruitment difficulties are likely to be temporary as the economy gets back on track, others are due to more fundamental issues that must be addressed by national government. The British Chambers of Commerce have outlined skills policy recommendations in their Workplace Training and Development Commission Report. Among other measures they are lobbying for more re-skilling opportunities for adults in the workforce and a more flexible immigration system.
In January 2021, the government released their further education white paper, ‘Skills for Jobs’ which was followed on 18 May by the introduction of the Skills and post-16 Education Bill in Parliament. The aims of the bill are to embed employers in the skills system to ensure training meets local needs, giving every adult access to a flexible loan for training and increasing accountability amongst education providers. Proposed changes are likely to be debated for some time.
In the meantime, businesses need to be aware of the local labour market and carefully plan how to attract and retain talent. The Chamber’s Salary and Benefits Survey 2021, in partnership with Hewett Recruitment, is now open and we encourage all local businesses to take part: https://www.surveymonkey.com/r/SalaryBenefits2021. When the report launches in November 2021 it will give businesses the opportunity to compare their recruitment and retention practices to other businesses in the two counties.