The Confederation of Business Industry has warned that the present labour shortages could last for up to two years, with experts suggesting that the government should take a more flexible approach to filling gaps instead of waiting for shortages to solve themselves. It also suggested that firms should use skills training and apprenticeships to assist in solving the problem.
Tony Danker - Director-General of the CBI - raised concerns, stating:
“Shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery”.
He added:
“Standing firm and waiting for shortages to solve themselves is not the way to run an economy. We need to simultaneously address short-term economic needs and long-term economic reform.”
Tony Danker remarked that the government’s ambition to make the labour force in the UK more highly skilled and productive was correct and he agreed that businesses would train and hire more homegrown workers in time - but added that this could not be achieved overnight.
He said:
“A refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating. Businesses are already spending significant amounts on training, but that takes time to yield results, and some members suggest it could take two years rather than a couple of months for labour shortages to be fully eliminated.”
Gerwyn Davies - Senior Labour Market Adviser at CIPD - said that recent increase in hiring activity - and the related decline in labour supply - indicated that labour shortages might not continue to the same extent, given the imminent end of the furlough scheme.
However, Kate Palmer - HR Advice and Consultancy Director at Peninsula - stated that, as the impact of coronavirus continued and the new immigration laws continue to be rolled out, there was still a chance that staff shortages could worsen.
She said:
“Government intervention will be needed to curb the impact of this and help reduce the risk of potential business closures in the near future.”
She suggested that employers should consider investing in training new hires to their desired standard, perhaps through apprenticeship schemes.
Ian Moore - founder of HR consultancy Lodge Court - said:
“Having a blended approach of permanent, contract, and overseas staff, together with apprentices will help to plug the known gaps but this will take time.”
He went on to suggest that the government review not only immigration but also employment levies and taxation rules such as IR35, so they do not deter more individuals from changing careers - whilst also encouraging others to stay in the UK.
