Britain faces two-year labour shortage

UK industry could see a two-year labour shortage should current issues facing the British workforce not be dealt with successfully following the end of the job retention scheme, the Confederation of British Industry (CBI) has revealed.

Key sectors, such as construction and manufacturing, transport, retail, and hospitality have faced disruptions to their operations in recent weeks amid growing staff shortages and with little time to take on and train new members before the end of September.

Read more: UK's Covid furlough scheme extended until autumn

To this end, the CBI has set out a number of priorities for both businesses and the government to shield the UK's economy against any potential labour shortage windfalls.

The CBI's Director-General Tony Danker said: "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," stipulating the importance of flexibility within the employment market.

The CBI blames a mix of Brexit and the pandemic on the current condition of British industry. Supply chains disruptions are also causing further chaos exacerbated by other issues such as a lack of HGV drivers, which have to lead to increasing calls for action in the run-up to the Christmas period.

A focus on using British workers, particularly those coming off furlough once the scheme ends, is at the forefront of the CBI's agenda, rather than changing rules to allow for temporary EU workers to fill in the gaps as has been done previously.

The association has also called on businesses to prioritise training in areas with significant unfilled vacancies in order to allow them to plug more pressing skills gaps in the short term alongside the government skills-based immigration levers.

Other sectors, such as hospitality, are facing shortages in cleaning staff, which has caused many to have to limit the number of rooms they can rent out over concerns of turnover. Another example is restaurant owners having to choose between lunchtime and evening services to get the most out of the boom the sector sees during the summer period without overworking staff.

Danker has also urged employers to play their part in long-term economic reform through investment in training, automation and the digital transformation - Industrial Internet of Things (IoT), Industry 4,0 etc.

While a number of economists still expect growth to return to pre-pandemic levels towards the end of this year, labour shortages will still continue to bit across the economy, the CBI revealed.

Danker has warned officials that the furlough scheme ending will not "magically fill" labour gaps. With many of these pitfalls already in place, it could stand to hinder the UK's economic recovery.

Building a more innovative economy, coupled with better training and education, could allow for greater business performance, but the setup will take a significant amount of time. Deployment of short-term solutions to allow for long-term economic recovery will be essential.

The firm has called on ministers to add a number of professions, such as bricklayers, HGV drivers, welders and butchers on the UK's shortage occupation list to allow for supplementation and priority for incoming migrant workers to the UK, which Danker claims could make "a real difference".

Read more: Which UK industries were most affected by the pandemic?

"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", Danker said.

“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.”

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