Our UK economy has been hit by a wave of staff shortages, unseen since the 1970s. Research shows that businesses across the country are struggling to recruit the staff needed to operate at full capacity, with labour shortages present in a variety of sectors and role types, from entry-level hospitality positions, to veterinary practitioner roles which are needed to validate animal produce traded with the EU.
The Road Haulage Association estimates that there is currently a shortage of around 100,000 HGV drivers, meaning supply chains are overstretched. Customers are already seeing the impacts of this, with supermarket shelves increasingly bare. As the run-up to Christmas edges closer, there are concerns from sector experts that supply problems will cause widespread stock shortages.
The shortage of HGV drivers is having a particularly deep impact on the North East’s ability to trade. As a result of their inability to transport the goods, a small manufacturing member of Chamber has had to cancel six orders, while other companies have had to inform international clients that they cannot guarantee deliveries on time. Businesses are concerned that this could hamper their chances of winning supplier contracts.
So, what has caused such extensive labour shortages?
The pandemic has caused widespread labour shortages across Europe, with many foreign workers returning home to wait out the crisis. The US, Germany and France are also struggling with a shortage of HGV drivers for example; however, the UK has been hit hardest due to the new immigration system, which put a stop to freedom of movement with the EU. There are now strict entry requirements for skilled talent, whilst the entrance of so-called ‘unskilled’ workers, including care workers, hospitality staff and HGV drivers, has been blocked.
The shortages caused by the pandemic and the EU’s exit will likely be a longer-term problem; businesses expect to see shortages remaining for two years at least. Employers are working hard to create a strong domestic talent pipelines, but this is a long-term project, and the Government needs to allow employers more flexibility to hire the staff they need from outside the UK while this is established.
We recently wrote to the Government pushing for urgent changes to the system to be made to ensure that businesses in the North East can recruit the staff they need. The changes we proposed included creating a temporary route for unskilled roles critically needed to meet economic or social priorities. We will continue to push Government on this critical issue.