Job vacancies in the UK are soaring, but there are not enough workers to fill them. This has caused a skills shortage - the most pressing issue in the jobs market right now - which has the potential to slow down the country’s economic recovery.
Lots of jobs, but not enough experts
Now that coronavirus restrictions have eased and the UK attempts to adjust to the ‘new normal’, job vacancies have actually climbed past pre-pandemic levels. This may sound like positive news, but for businesses, it highlights a serious problem: skills shortages. A recent report, “Solving the UK Skills Shortage”, has revealed that two-thirds of recruiting businesses expect to struggle to find the candidates they need.
The Covid-19 pandemic has accelerated social and economic change. In the last year, it has prompted many foreign workers in the UK to return home to wait until the situation improves, but there’s no guarantee that they will all return. Add Brexit into the mix, and the inability for companies to hire staff from Europe to plug gaps in the workforce is no longer an option.
Companies across various sectors of the economy just can’t find enough people. There is also a reluctance from potential candidates to seek new roles because of the ongoing uncertainty caused by Covid-19. In addition, the number of staff still on furlough, and the hundreds of thousands of individuals that are being forced to self-isolate, are worsening the labour shortages caused by Britain’s post-Brexit points system for hiring non-UK nationals. An estimated 1.3 million non-UK workers left the UK because of Covid, but many may not return because of Brexit.
Even Amazon has been affected
The fact that Amazon, the world’s 4th most valuable company, is also suffering from the same recruitment issues as other companies shows how widespread this problem is. To combat the problem and drive their recruitment campaign, they are offering a £1,000 joining bonus to new warehouse workers. Similarly, Tesco and Asda are offering HGV drivers a £1,000 bonus to sign up to offset the exodus of Eastern European lorry drivers who returned home after the pandemic hit.
This is also having a positive effect on wages: recruitment company Hays has said that the hiring problems are causing wages to increase by as much as a quarter in some sectors. Employers are clearly keen to attract and retain quality people. There is a battle going on right now for top talent, and companies are paying for it.
However, these seem to be short term incentives aimed at getting people into the workplace quickly, rather than solid strategies that will benefit businesses in the long run. At RMS, we are taking a different stance in terms of how we retain our valued workers. We understand that there are other things that are important to people rather than signing-on bonuses. For example, we are investing heavily in training our people to support their personal development, and we are advocates of flexible working because we believe that everyone has the right to an ideal work-life balance.
How to solve the problem
Action from businesses and the government to reskill and upskill furloughed and prospective workers is needed desperately, as the increasing skills gap in the workforce has the potential to slow the UK’s economic recovery. By 2030, two-thirds of the UK workforce could be lacking in basic digital skills, while more than 10 million people could be under-skilled in leadership, communication, and decision-making.
In a survey by the CBI (Confederation of British Industry), more than 80% of firms stated that access to skills was the most significant threat to the UK’s labour market competitiveness. So, how can organisations prepare now to secure the right talent in the occupations that face shortages today?
- They can build new skill sets among existing employees. The costs associated with hiring and firing staff can be prohibitive, so for the majority of occupations, the ideal solution is to upskill existing employees while replacing routine tasks with automated systems.
- Organisations can rent talent from external partners. Companies can develop outsourcing partnerships that bring in specialised skills. Or, they can tap into the gig economy to source talented individuals. 8 in 10 businesses believe gig economy workers are more productive than permanent staff, while offering employers flexibility and the option to scale their operations up and down.
- Another approach is to harvest transferable skills – to acquire talent from unconventional sources, by focusing on a person’s intrinsic qualities rather than the sector they work in. Many UK companies lag behind their global peers in regard to the reallocation of human resources. Companies will need to shift from assessing people based on their qualifications and career histories to assessing their underlying skills.
The road to growth
Skills shortages that existed in the UK before the pandemic are becoming more apparent now that the economy has reopened. ONS data reveals that UK productivity levels are low, sitting at 20% lower than what was forecasted a decade ago, which is proving a major threat to the country’s economic growth. Skills gaps reduce an organisation’s ability to respond to customer needs, stay ahead of competitors, adopt new technologies, or utilise existing equipment or practices to promote growth.
Luckily, there are several coping mechanisms that could prevent disastrous consequences. If organisations focus on staff retention, developing a workplace learning culture, and invest heavily in training their people to teach them the skills they need to succeed, productivity will naturally increase. Businesses succeed or fall depending on the quality of their people – recognising the value of continuous professional development and ensuring that existing members of the workforce are given the chance to learn and improve will be the keys to success.
RMS is the leading provider of merchandising and retail support services in the UK and Ireland. We understand the importance of quality people, which is why we have made an investment in upskilling our staff across all areas of the business. Supported by flex™, our innovative technology, we have committed to providing our people with the opportunities to develop their skillsets, which will allow them to deliver a better service for our retail partners.
