Why is The UK Experiencing Labour Shortages?

What is a Labour Shortage? 

In simple terms, a labour shortage is when there are more jobs available on the market than there are suitable workers. This makes it difficult for employers to find and hire staff with the correct training needed in the relevant role. 

This can have negative effects on a business, with CBI’s Employment Trends Survey with Pertemps Network Group reporting that more than a third (38%) of businesses haven’t been able to grow and take new opportunities due to labour shortages in the last year, while 1 in 10 (12%) have shrunk due to shortages. 

Where Are the Labour Shortages in the UK 

Almost every industry has been affected by labour shortages in some way over the last few years, but these are the industries that have been strained the most.  

• Health and Social Care 
  The health and social care industry has experienced significant shortages in labour, with care homes, social care services, and nursing being hit due to the shortages. The demand for skilled healthcare professionals, along with an ageing population that needs care, has made it increasingly difficult to fill positions and is continuously straining resources. 

• Construction 
  Construction, and other skilled trades like electrical work and plumbing, is facing constant labour shortages due to skill gaps and a workforce that is ageing. These trades have struggled to attract younger workers in recent years, resulting in less qualified personnel. 

• Hospitality and Tourism 
  Low-skilled and seasonal workers are relied upon to keep the hospitality and tourism industry afloat, with workers often being recruited from abroad. Restrictions that have been applied to international workers in recent years and a lack of interest among job seekers in the UK has seen labour shortages in hotels, restaurants, and other tourism-related services. 

• IT and Technology 
  As a rapidly evolving sector, IT and technology face continued labour shortages that are mostly driven by skill gaps. The demand for highly skilled workers in areas such as software development, cybersecurity, and data analytics is higher than the talent pool that is currently available to employers. This leads to fierce competition for those who are qualified in the industry. 
  

What's Causing UK Labour Shortages? 

There are a considerable number of factors that could cause labour shortages. Some that plague several industries include: 

• Brexit 
• Skill gaps 
• Early Retirement 

Brexit 
According to new research, the UK is down over 300,000 workers as a result of Brexit. Issues that employers had already faced pre-Brexit have only amplified since the end of the free labour movement within the EU. Industries such as hospitality, transport, and other ‘low-skilled’ sectors who relied on low-wage workers from the EU have struggled as a result of this. 

Skill Gaps 
In a lot of industries, like IT and Technology, employers are finding it increasingly difficult to find workers with the correct skillset for the job requirements. In August 2022, the Federation of Small Businesses discovered that 80% of small businesses had faced issues when recruiting applicants with the skills they need over the last 12 months.  

Early Retirement 
One of the lasting impacts of the Covid-19 pandemic is the rise of early retirement in the UK, and the impact this has had on businesses.  

People in their 50s and 60s have been retiring in increasing numbers since the start of the pandemic, despite the official retirement age in the UK being 66. A 2022 ONS survey found that less than 1 in 10 of these had done so due to health issues and were instead retiring early out of choice. This has led to a decrease in skilled workers in their industries and increases the amount of hiring and training that employers are having to carry out. 

What Can the Government do to Overcome Labour Shortages? 

The UK government is aware of the labour shortage, and there are ways that they can combat it. Here are some things that the government has done so far. 

Increase in Seasonal Worker Visas 

To combat labour shortages in the agricultural sector where food has been left unpicked, the government has increased the number of seasonal worker visas to 45,000 per year. This is an increase of 15,000 since the previous year, however, the National Farmers’ Union has said that this is still not enough. 

Looser Visa Requirements for In-Demand Professionals 

A list of occupations experiencing labour shortages was published by the government, having been compiled by an independent group of experts. The plan for this is to make it easier for immigrants to fulfil in-demand roles in the UK by lowering visa requirements. 

How Does Upskilling Fight the Labour Shortage 

Upskilling in the current workforce environment has emerged as the best solution to combat the labour shortages. For jobseekers and workers alike, having the skills and confidence they need to enter or climb through the workforce is crucial to fight against the labour shortage.  

Meeting industry demands allows you to adapt to the changes within the current environment, ensuring you possess the skills needed to fill critical roles. Gaining those sector-specific skills like business administration, or health and social care, increases the likelihood of securing employment, and further staying in employment. 

As an employer, investing in the development of your employees can increase their satisfaction and loyalty. This is due to the fact that employees are more likely to stay with an organisation that values their professional growth whilst providing opportunities to upskill.  

The AIM Group offers a range of courses, both government-funded and paid, that can give you the skills you or your employees need to succeed in specific industries. All our courses are nationally accredited, which means they are recognised by employers across the UK.  

Combat these labour shortages and upskill your future. View our full range of courses here: https://theaimgroup.co.uk/courses