Nearly three quarters of UK firms attempting to recruit are still facing difficulties, according to new data from the British Chambers of Commerce (BCC) Insights Unit.
Hospitality firms are facing the biggest challenges in hiring staff, with nearly 80% of UK hospitality businesses reporting short staffing issues, for the third quarter of 2023.
This is closely followed by both construction & manufacturing at 78% (down from 86% and 81% respectively in Q2 of 2023). Meanwhile, 72% of retail businesses said they have experienced recruitment issues.
The data came from the Quarterly Recruitment Outlook (QRO), a survey of nearly 5,000 UK firms of all sectors and sizes, by the British Chambers of Commerce (BCC) Insights Unit.
But despite the figures remaining high, they have dropped slightly from the historical high of 82% of UK businesses facing problems hiring staff, which came in Q4 2022.
Of the hospitality firms reporting problems, 58% faced difficulties in finding semi/unskilled workers, 41% skilled manual/technical staff. And in the construction and engineering sector, 78% faced problems getting skilled manual/technical workers, but just 21% for semi/unskilled.
As businesses continue to face a series of economic headwinds, most are still reporting no increase to investment in workplace training. Just over a quarter of firms reported an increase in staff training (27% the same as Q2), with 13% reporting a drop (14% in Q2).
Labour costs are cited by most firms as a source of cost pressure, with 66% citing this (compared to 63% in Q2 and 67% in Q1). 59% of firms say they’re also concerned about energy costs.
WHAT ARE STAFFING ISSUES?
Staffing issues refer to problems or challenges that an organisation faces related to its workforce. These issues can encompass various aspects of managing employees and ensuring that an organisation has the right people with the right skills in the right positions to meet its goals and objectives.
In the UK, Brexit had an impact on staffing levels, particularly within the hospitality and retail sectors, as many shops and restaurants were staffed by young, European and international workers who no longer had the right to work in the UK. This was compounded by the Covid-19 pandemic, which forced many businesses to lay off staff only to be left with a shortage when they eventually re-opened again, as many employees had either left the country, re-trained or moved elsewhere.
The UK now has just under a million job vacancies in the economy, and skills shortages are damaging businesses’ ability to operate profitably – as well as impacting the wellbeing and morale of remaining staff.
Common issues around staffing include recruitment and hiring, with difficulty in finding and attracting qualified candidates for job openings. This can include issues such as a limited pool of talent, intense competition for talent, or a lack of effective recruitment strategies.
Struggles in retaining valuable employees. This may involve high turnover rates, which can be costly and disruptive to an organisation. And skills gaps, when employees lack the necessary skills and competencies to perform their jobs effectively. This can be due to insufficient training and development opportunities or changes in job requirements.
Many staff are now looking for a better work-life balance and demanding more in terms of compensation and benefits, as well as remote working.
Responding to the findings, Jane Gratton, deputy director for public policy at the BCC says: “The scale of the recruitment crisis remains huge, despite a welcome fall in the number of firms reporting hiring problems.
“Employers are offering more flexible working wherever possible but are still struggling to hire and retain the right staff to help get them through these challenging economic times. The picture in the hospitality and manufacturing sectors is particularly worrying.”
HOW TO SOLVE STAFFING ISSUES?
Solving staffing issues requires a systematic and strategic approach. Gratton says businesses and the government need to work together to resolve this problem. Bringing more people back into the workforce, with rapid retraining programmes and comprehensive support, will help.
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While many employers remain sharply focused on investment in training, most businesses need more help to get the workforce skills they need. He says positive interventions in the tax and skills system would be welcome, to boost investment in workplace training and development.
“It’s high time the government listened to employers and brought in the urgent reforms to the apprenticeship levy that will allow more people to get the training they need,” he continues. “We also need long-term commitment to Local Skills Improvement Plans that are bringing together employers and providers to plan for skills needs,” he adds.
Gratton suggests that where businesses have tried everything possible to recruit people locally, a flexible and affordable immigration system must be there to support them.
He says: “The Shortage Occupation List does not reflect the reality businesses experience on the ground. Last week, the Migration Advisory Committee underlined concerns that the list is not an effective tool to address labour shortages. An alternative must be developed urgently and in consultation with business.
“Our economic forecasts suggest the coming couple of years are going to be tough for everyone. Solving the recruitment crisis will be key to getting the economy growing again,” he adds.
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