Skills Shortage: How far reaching it is and what is the solution?
After a challenging period, it appeared that UK businesses were on the road to recovery.
But resourcing- and skills shortages in particular- are blotting the landscape.
Brexit and the pandemic only served to exacerbate the issue, as evidenced by the recent shortage of lorry drivers across the UK. And this week, we are seeing in very real terms the impact of these staff shortages with the ongoing fuel shortage.
What caused the skills shortage?
A variety of factors have contributed to the national skills shortage. According to the City & Guild skills index reporti, rapidly changing industries are creating gaps between the skills people believe they have, and the skills employers require. For example, many industries such as health care faced disproportionate demand and pressure due to the pandemic and were forced to innovate. The report additionally identifies digitalisation of workplaces and processes, as key contributors to the skills shortage.
Brexit also played its part with many employers now hiring locals, according to the report, which found that only 6% of businesses sought talent from abroad, (compared to 44% local). Further Brexit fall out can be seen in the recent news around fast food and restaurant chains facing supply chain shortages and issues, with the likes of Greggs, McDonalds, KFC and Nando’s becoming victims to food shortagesii. McDonald's was forced to halt milkshake and bottled drink sales due to a shortage of HGV drivers, Nando's temporarily closed 50 locations due to supply chain issues, and the German confectionary brand Haribo struggled to deliver in the UK. Moreover, the British Poultry Council, one of the largest poultry suppliers, also identified labour shortages as the cause of chicken shortages, arguing that there is a lack of migrant workers, who make up 60% of their workforceiii. However, as City & Guild points out, employers must reconsider their approach to filling skills gaps and prioritise upskilling as Brexit has resulted in a shrinking talent supply due to tougher immigration policies.
Furthermore, skills shortages like the HGV driver shortage has impacted more than just the hospitality and food industries, as BP was forced to temporarily close a few of its UK sites due to a lack of access to petrol and dieseliv. Now, this problem has become even more prolific as we face an ongoing fuel shortage across the country, which has led to panic buying and the highest petrol prices since 2013. With the Government potentially looking to deploy army tanks to deliver petrol to petrol stations struggling with the increased demand, the issue continues to be overwhelmingv. Especially as the knock-on effects can potentially have wider and more dangerous implications. With many essential workers not being able to come into work in the morning due to a lack of access to petrol, The British Medical Association and Royal College of Nursing are urging the government to prioritise healthcare workers who are unable to get to workvi.
Looking at this issue closer, the pandemic, among other factors, has contributed to a shortage of HGV drivers for numerous reasons. Many workers have been absent due to Covid-19 illnesses, resulting in a phenomenon known as the ‘pingdemic’. Many manual workers have been unable to work from home because they have been forced to isolate. The pandemic also disrupted much of normal life, and many driving exams were rescheduled, resulting in a significant backlog of people wishing to receive training. Moreover, long hours, as well as the £3,500 cost of obtaining a C+E licence, which allows drivers to drive lorries with trailers attached, have made manual jobs like HGV driving less appealingvii, and the industry has seen many drivers retire.viii
What are the solutions to this ongoing crisis?
The government has identified those industries facing the biggest skills shortage and is encouraging international job seekers to apply for skilled worker visas in a variety of sectorsix. Welding trades, mechanical engineers, programmers, and software development professionals are among the industries that have been impacted and may be looking for skilled workers internationally.
HomeServe director Helen Booth in a Personnel Today articlex suggests that the answer to the skills shortage problem may lie in utilising the apprenticeship levy more effectively. Booth asserts that, despite a skills shortage more than £1 billion in apprenticeship levy funding has gone unused. Agreeing with this sentiment Checkatrade CEO Richard Harpin believes a longer-term plan to encourage more school leavers to take up apprenticeships rather than going to university, is the way to goxi. Our ASPIRE apprenticeship programme and our Close Brothers SME Apprenticeship programme, for example, has been incredibly successful in placing high school graduates in professional, challenging, and fast-paced business environments. Programmes such as this give school leavers the opportunity to acquire practical skills that will aid in their transition from education to the workplace.
In other industries the use of incentives to entice workers into their sectors has proved effective. According to Adzunaxii, a job search engine, offering lucrative sign-up bonuses is the latest tactic used by some recruiters who are struggling to fill positions. Tesco and Asda, for example, have announced that new HGV drivers will receive a sign-up bonus. James Reed, chairman of Reed, additionally, said that pay for jobs in hospitality and catering had gone up 18% on the jobs advertised on their sites, and 14% for all jobs paying £25,000 or lessxiii. In contrast, other companies such as Aldi are choosing to fund upskilling as well as monetary incentives, as Aldi for example are offering a driver apprenticeship programmexiv. The most effective solution can only be determined by the individual company, whether that’s providing monetary incentives or focusing on upskilling.
Employers too are looking to attract talent from demographics that may traditionally not put themselves forward for jobs in their sector. For example, Veolia UK, the refuse collection company, have urged mums in particular to apply for part time work with them, citing the flexible nature of the job as a benefit. Veolia hope to break the ‘binman’ gender stereotype and open up the sector to more women and in doing so fill their staff shortages.
The UK skills shortage is a complex situation with numerous implications for small businesses, whether it is due to supply chain issues or talent droughts. But there are a few creative solutions at play to try and address this. For most businesses, any solution will need to be tailored to their individual needs with budget and resource allocation a key consideration when appraising initiatives such as offering financial incentives and bonuses or the capacity to hire an apprentice.