The labour shortage could last for up to two years, delaying the UK’s economic recovery, warned the Confederation of British Industry (CBI) as it urged the government to take action to alleviate short-term pressures.
Labour supply problems, exacerbated by Brexit, have been reported in many industries as the economy tries to recover from the COVID-19 pandemic.
“Labour shortages are biting right across the economy,” said the CBI’s director-general Tony Danker. “While the CBI and other economists still predict growth returning to pre-pandemic levels later this year, furlough ending is not the panacea some people think will magically fill labour supply gaps. These shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery.”
A lack of lorry drivers has caused much-reported supply disruptions to supermarkets and fast-food chains in recent weeks, with the Road Haulage Association saying the HGV driver shortage stands at 100,000, while the construction industry, food producers, hotels and restaurants have all issued their own warnings about the dearth of skilled staff.
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“Other European countries are also experiencing staffing shortages as their economies bounce back,” said Danker.
“In the UK, many overseas workers left during the pandemic affecting sectors including hospitality, logistics and food processing. And new immigration rules make replacing those who left more complex.”
“The CBI has heard from companies actively cutting capacity because they can’t meet demand, like the hoteliers limiting the number of bookable rooms because they don’t have enough housekeeping staff and can’t get linen laundered. Meanwhile some restaurant owners have had to choose between lunchtime and evening services when trying to make the most of summer.”
The Restaurant Group PLC's Wagamama said today that it is struggling to hire chefs at a fifth of its sites due to the reduction in its EU workforce.
The hospitality sector is reporting a 10% vacancy rate, equal to 210,000 roles, according the latest figures from the Office for National Statistics.
“Using existing levers at the UK’s control – like placing drivers, welders, butchers and bricklayers on the Shortage Occupation List – could make a real difference. The government promised an immigration system that would focus on the skills we need rather than unrestrained access to overseas labour. Yet here we have obvious and short-term skilled need but a system that can’t seem to respond.
“Great economies like great businesses can walk and chew gum. We need short-term fixes to spur recovery and long-term reforms to change our economic model,” Danker concluded.