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Why is there a shortage of staff in the UK?

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Published on 26 October 2022

Broadly speaking, the coronavirus pandemic takes a big portion of the blame for the staffing issues we’re now experiencing. But in truth, it accelerated many issues we already had, while simultaneously creating new ones.

It was widely anticipated that the pandemic would result in a shortage of jobs, not the opposite. But combined with Brexit, stagnant wages and a shift in employee expectations, we ended up with the perfect storm for a staff shortfall.

Here we cover all of the factors that have contributed to the worker shortage across the nation.

When the pandemic swept through the nation and businesses were forced to close, redundancies and layoffs were inevitable. Between March 2020 and January 2021 alone, 1.3 million people lost their jobs. And there were more to follow with the fluctuations of restrictions throughout 2021 and the ending of the furlough scheme.

During this period while demand for staff was low, many people who lost their jobs decided to change industries, not return to work or retire early.

When the pandemic restrictions ended and business began to return to normal, it created a sudden surge in demand for staff across all sectors. But by this point, the number of available vacancies was almost outstripping the number of available candidates.

Ageing workforce
Around one in four workers across most industry groups are aged 50+. But the employment rate of those aged 50+ is falling and at the same time, young people are spending longer in education and joining the workforce later, so it’s becoming more difficult to replace those exiting and bridge the gap.

In addition to this, young people have become less attracted to the roles occupied by the ageing workforce – like driving, agriculture, catering and manual labour. Instead, the younger generation is showing an increased interest in white-collar, entertainment and creative/arts roles. 

Skills shortages
The threat of skills shortages in the UK is not a new one. For years, industries such as healthcare, hospitality, logistics and construction have struggled to recruit the right talent, and it has only worsened since the pandemic.

An increased reliance on technology in all sectors is just one example of how the world of work is changing. For young people in particular, the reduction of available work experience and fewer opportunities to develop employability skills as a result of reformed school exams, have also contributed to the decline in technical and soft skills. 

Surveys show that investment and training is far below the levels it needs to be to reduce these shortages.

A number of industries in the UK relied heavily on EU workers, and the end of free movement as a result of Brexit has reduced the pool of workers further.

While there is a work visa route for seasonal workers in some sectors, most low-wage jobs are not eligible, meaning many of the industries that were already suffering due to skills shortages and an ageing workforce, have been hit harder.

Employee expectations
With a heightened desire for a better work-life balance post-pandemic and the realisation that job-seekers were suddenly in the driving seat, the era of “the great resignation” was born.

Due to the difficulty of hiring new staff and the abundance of job vacancies, employees were in a position to make more demands on flexible working options and wages, and many of those whose preferences weren’t met moved jobs.

Not only has this made it more difficult for businesses to retain their staff and avoid the pressure of finding new ones, but it also pushed wages up across the board.

Rise in economic inactivity
Since the pandemic, the number of people neither working nor seeking work has risen to more than nine million people. That’s one-in-five working age adults. There are a number of reasons for the increase, but one of the biggest drivers is a new record of long-term sickness, preventing people from returning to work. There’s been a clear link in NHS treatment delays and economic inactivity, so as pressure on the NHS continues to build, this may be put further strain on the labour force.

How can you tackle the staff shortages?
The issues we’re currently facing are nationwide and they’re not easily addressed at a business level. But there are a number of things that you can do to improve your employee retention and candidate attraction.

How efficient your hiring process is plays a huge part in whether or not you can secure your ideal candidates. Job seekers no longer want to go through long application processes, endless interviews and extensive tasks. If they have the option, they’ll favour roles with simpler hiring processes. So if you feel like a candidate is right for your business, don’t make them jump through too many hoops as you may face losing them.

Offering clear progression routes and training, developing a strong company culture, introducing incentives and having regular check-ins and appraisals can help you to retain your current employees, without needing to hike wages.

To conclude…
While the employment rate has improved since the pandemic, the individual contributors to the staff shortages don’t show immediate signs of improvement. And until these areas are addressed, the difficulty to hire will likely continue.

Therefore, it’s certainly worth partnering with a recruitment agency to ensure you have the best possible chance of reaching those hard-to-find candidates.
Not only can recruitment agencies save you a lot of time and resources, but taking into account the cost of a bad hire and loss in productivity, agencies can save you money too.

Submit a vacancy or get in touch with one of our expert local consultants to find out how we can help you.

Why is there a shortage of staff in the UK?