As the weeks go by, more and more businesses are re-opening – and with restrictions seemingly set to end on July 19, the rest will soon follow. This is fantastic for our economy.
But as restrictions lift, we’re also seeing a surge in demand for staff. We know many businesses are already struggling to recruit.
I hear it with more and more frequency (and urgency) from CBI members across the UK – and the figures back it up: the latest REC/KPMG report shows overall candidate availability during the past quarter declined at its quickest rate since 2017. It emerging as a big challenge, not just for individual businesses, who can’t find the people they need, but also for our longer-term economic recovery.
As I outlined in my recent speech to the Recruitment and Employment Confederation (REC), we’ve got a perfect storm brewing, with a range of factors at play.
So what’s going on? During the pandemic, many workers from overseas left the UK to return home – hitting the UK’s hospitality, logistics, and food processing industries particularly hard. Meanwhile, Covid has added major uncertainty. Some people are understandably wary of changing jobs right now. Others have moved away from sectors that have stayed locked down. And the job retention scheme – an important lifeline for millions of employers and employees alike – has temporarily shrunk the talent pool for businesses looking to grow.
Furthermore, staff shortages are being exasperated by the government’s strict self-isolation rules; with infections rapidly increasing, anyone who comes in contact with a Covid positive person has to self-isolate for 10 days regardless of whether they have been double vaccinated, have had Covid, have no symptoms and have had a lateral flow or PCR test showing negative results – this has to change to free up not only workplaces but also schools too.
On top of all this, the UK’s longstanding skills shortages haven’t gone away.
Businesses must first help themselves. By opening up new routes into business, whether it’s a new apprentice scheme or widening access for candidates with technical qualifications. And by investing in innovation and technology.
They must also do more to recruit from a wider talent pool. There are organisations and charities they can work with to do this, like Mind, Business in the Community, Movement to Work, or DisabilitySmart. And there are campaigns they can support which will help them think twice about those people they’ve overlooked – such as the CBI’s Change the Race Ratio, which – a year on from launch – has almost 100 businesses signed up.
Above all, we know strong employer/employee relations are central to attracting and retaining the best staff and driving the best results.
But the Government has an important role to play too. Firstly, it can update the Shortage Occupation List, reflecting the advice of the Migration Advisory Committee in September last year to include jobs such as butchers, bricklayers and welders.
Businesses would also welcome a commitment to review the list more frequently, so it remains responsive labour market demand.
But workers from overseas aren’t, and shouldn’t be, our only response to labour shortages. Investing in skills in the UK too is vital. It’s not an either/or choice. We must do both to ensure our firms have the access to the people they need to succeed.
It’s why we need to align our immigration and skills policies – by using the Lifetime Skills Guarantee and the National Skills Fund to help workers gain skills for jobs on the Shortage Occupations List. Doing more to support British workers, and directing them to qualifications we know are in short supply.
It’s why we need the government to extend its Kickstart scheme too – to give time to match young people to these opportunities.
And ensuring a steady pipeline of young people equipped with the right knowledge and skills to enter the world of work is vital too. That means getting to grips with travel rules in a way that enables overseas students to start their UK university education as planned in September.
The UK government can do these things straight away, with no regrets, to help make sure the UK is open for business. Business and government together can help resolve staff shortages. And if we do, I have every confidence this could be the best decade yet for the UK economy.
