80 percent of UK businesses are now struggling to recruit the staff they need
The Great Resignation is not solely a US problem. The impact is also being felt in the UK, despite rising living costs. According to estimates by the British Chambers of Commerce, 80 percent of businesses are struggling to recruit, with more than 40 percent of FTSE firms reporting that talent acquisition is a struggle in 2022.
The challenges of recruiting are particularly high in sectors traditionally awash with labour, such as construction and hospitality. Hotels, restaurants, cafés and builders are all finding it hard to find the workers they need to carry out their operations. Many are having to pay higher wages than they did in 2019 for less talented and experienced people.
Driving recruitment challenges are multiple issues, including lack of access to UK-based employees and disruption caused by the pandemic. However, many observers believe that problems are not merely structural, but also psychological. UK workers are taking a break en masse, and many plan never to return to the monotony and grind of work. They envision more for themselves, and they are taking a stand.
The British Chamber of Commerce sampled 5,400 companies from across the country involved in various industries and sectors. In Q3 2021, around 77 percent of employers reported struggling to find the people they needed to operate their organisations. By Q4, that figure had risen to more than 79 percent, driven by labour shortages from the continent and other factors.
Employers may not be able to do a great deal about the headwinds that they currently face in attracting labour. For many, increasing wages to lure more workers back to the labour force simply isn’t an option, given cheaper rates overseas. For others, there is simply a lack of available people. The UK’s working-age population is large, but because of declining birth rates over the last two decades, there are fewer new entrants into the world of work than there were in the past, partially explaining why unemployment rates have been so low since the financial crisis of 2008.
Employers, though, are trying to do what they can to keep their businesses ticking over, adopting radically new retention and recruitment strategies. For instance, more companies are offering workers a “golden hello,” something that was previously only available at top firms or in the public sector. Amazon, for instance, recently started paying people large upfront cash sums, just to work in its warehouses.
Companies are also looking into flexible working and giving employees more non-cash perks in their jobs. Improving company culture and assigning more creative tasks are top priorities. Firms want to prove to their workers, particularly millennials, that they provide dignified, varied, and rewarding work. If employees want to work from home for a few days each week, that is their prerogative.
Businesses are also adopting feel-good measures, such as welcome boxes for new employees and corporate days out. These additions to the working day, they hope, will make colleagues feel more valued than they do currently.
There’s also a greater drive to develop home-grown talent. Many firms now see themselves as being people developers, with masters and apprentices, since finding the people they need from outside the firm is so difficult. With a pervasive skills shortage, it’s no longer possible to just spend money and get the required talent, so many are looking inwards to see if they can get the workers they need from their own ranks.
How the current talent shortage will play out is anyone’s guess. The British Chamber of Commerce says that companies face severe economic headwinds that will hurt their ability to meet wage demands. Falling consumer confidence, higher debt levels and inflated input costs are all taking their toll. There is a real risk of recession, and the last thing firms want in that environment is rising labour costs. Employers still need time to get back on their feet after COVID-19, but are having trouble doing so.
Because of the nature of skills required by the economy, immigration may not be an answer, either. Overseas labour tends to find work in low-skilled jobs, particularly agriculture, in the UK. But the skills shortage is affecting companies from across the spectrum, including those who require western-educated individuals more likely to find opportunities in their home countries.
Brexit has created even more barriers to trade. Before the UK left the EU, workers from the continent could work in UK businesses without needing to meet strict visa requirements. However, since the break, that’s all changed, and now employees need to complete more paperwork before being granted permission to work in the country.