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British employers face the worst labor shortage since 1997

Employers in the UK are struggling to cope with the worst shortage of employees since the late 1990s, due to Covid and Brexit.

The Recruitment and Employment Confederation (REC) and KPMG have issued a warning on the risk of severe labor shortages for economic recovery, saying that the number of available workers declined in June at the fastest rate since 1997.

Recruiting companies report that many sectors of the economy are facing recruitment challenges due to talent shortages in areas such as transportation and logistics, hotels, manufacturing, and construction.

In addition to the difficulties in hiring chefs, kitchen movers, cleaners and warehouse staff in the previous months, the snapshot also shows that the problems faced by employers are spreading to industries that usually pay more, such as finance, IT, accounting, and engineering.

“We now need more than ever before for companies and governments to take action to retrain and upgrade their skills for leave and prospective workers, because the widening skills gap in the workforce has the potential to slow down the UK’s economic recovery,” Education, Skills and Education Director Claire Warnes expresses the productivity of KPMG UK.

The eagerness to reopen after the pandemic restrictions caused bottlenecks. Due to Covid-19 border controls and post-Brexit government immigration regulations, fewer and fewer EU workers are going to the UK, and employers find the situation more complicated.

According to a survey of more than 400 recruitment companies by REC and KPMG, the sharp increase in recruitment demand led to an unprecedented decline in the availability of candidates in June. Recruiters pointed out that increased hiring, Brexit, pandemic-related uncertainty and vacation plans all put pressure on the number of job candidates available.

Official data show 1.5 million workers are still on vacation After the government postponed the end date of most pandemic restrictions to July 19, pandemic restrictions still limited full recovery efforts, and the Delta variant exacerbated the increase in the number of infections.

Last week, Rishi Sunak began to scale back a multi-billion pound employment plan originally scheduled to end at the end of September. During the first wave of the pandemic, nearly 9 million jobs were sacked during the peak period, and about 5 million jobs were laid off during the wave of January this year.

The unemployment rate in the UK has fallen in recent months As companies scrambled to recruit, this proportion dropped to 4.7%, or about 1.6 million people.The Bank of England predicts that the unemployment rate will Increase to 5.5% after the leave. However, this is significantly lower than Last year, Covid-19 was expected to push up the number of unemployed at the fastest rate since the 1980s, Resulting in an unemployment rate of 12%.

According to a survey released by the British Chamber of Commerce on Thursday, 70% of companies that have tried to recruit employees in the three months to June are working hard to recruit, which shows that companies are facing increasing pressure.

According to a survey of 5,700 companies, 52% of companies stated that they tried to hire employees within the three months ended June. The industries with the biggest hiring problems are construction, hotels and restaurants, and manufacturing.

Jane Gratton, BCC’s head of personnel policy, said that part of the problem employers face is that as the economy reopens, the skills shortage that existed in the UK before the pandemic has once again become apparent. “The encouraging growth in job creation in the manufacturing and service industries is hampered by recruitment difficulties at all skill levels, jeopardizing growth and productivity,” she said.

An estimated 1.3 million non-British workers left the country during the pandemic. Business leaders said that relaxing the immigration rules after Brexit may help solve the shortage problem, but also called on the government to further invest in skills and training to increase the number of domestic candidates.

Employment experts believe that people in certain industries known for low wages and poor conditions in recent years are being postponed, and concerns about the continued high incidence of Covid-19 are also having an impact.

Continued labor shortages may cause employers to push up wages, and if companies raise prices to accommodate higher wage expenditures, this in turn may cause inflation to rise. However, as the economy reopens from the blockade, it is controversial whether the bottleneck pressure will translate into permanent contraction of the job market.

REC CEO Neil Carberry said: “The job market is improving at the fastest rate we have seen, but this is still an unpredictable period. We are still not sure about the end of the leave and the candidates. To what extent does the increase in confidence help meet the growing demand for employees.”

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