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Recrutiment & Employment Confederation
Research

Labour and skills shortages

Labour shortages

We collected data from across the industry to understand the scale and complexity of the labour and skills shortage, here are our findings:

Recruiters' biggest concerns

Our findings clearly highlight the severity of the problem.

Nine in ten recruiters (88%) say that labour shortages are their biggest concern for the remainder of 2021, while skill shortages are a major concern for two in three (65%).

biggest concerns


Factors affecting recruiters' ability to place suitable candidates

placement


Filling the roles

Despite the severity of the labour and skills shortages, recruiters have been working around the clock, placing people into work. Many of the respondents say they have a significantly higher number of roles to fill than before the pandemic – three in five recruiters (58%) have at least 30% more vacancies now.

Almost every respondent to the REC survey (97%) said that it was taking longer than usual to fill those vacancies, exacerbating the problem:

vacancies


Recruiter response

Recruiters have adapted their operations to respond to the fluid demand of the pandemic. Here’s what some our members have done to respond to a changing labour market:

recruiter response

In response, the REC has set out a number of asks for both government and business to help solve this crisis:

Set up a new cross-government and industry forum including BEIS, DfE and DWP.

Whilst we are pleased that government has set up a cross departmental group internally – to be effective, this group must include industry experts. This would restore the importance of workforce planning in the economic debate between business, government, and other stakeholders.

This will enable government to make informed decisions based on what businesses are seeing on the ground, with the aim of building a resilient internal workforce, bearing in mind the constrains faced by each sector and how those can be alleviated by incentives, training and overseas recruitment as needed, both in the short and long-term.

Allow flexibility in the points-based immigration system and a visa route for low skilled workers.

This would allow firms in the worst-affected sector, like logistics, to access staff at times of pressing need.

For some sectors, as an immediate solution, this could be sector specific and follow the same format of the Seasonal Agricultural Visa Scheme. This would enable sectors heavily reliant in overseas labour to phase out that reliance and retrain the internal workforce without a cliff edge.

This ask is aligned with the Immigration White Paper from 2018, which included a: "a new time limited route for temporary short-term workers of all skill levels, including seasonal low-skilled workers"

Other asks that could partially alleviate the issues are:

  • An immediate review of the Shortage Occupation List to include occupations such as HGV drivers would also help alleviate some of the pressure.
  • An awareness campaign on EU Settlement Scheme rights, especially in terms of overstays overseas: government's guidance on this was updated only in June 2021, there could be some EU citizens that might be able to return to the UK but are unaware of their current rights.

Broaden the apprenticeship levy and increase funding for training at lower skill levels.

This would improve progression and transition opportunities for lower-skilled and temporary workers who need them most and encourage business to do more here in the UK, not less.

Currently a lot of the training on offer is for level 3 and above, while shortages are in every skills level and aggravated at lower skilled.

There are also particularities in some industries with workers following peaks elsewhere and project-based hiring, who cannot benefit from yearlong high restrictive training.

Increase focus from businesses on workforce planning, staff engagement, attraction and retention policies.

Firms need to raise workforce planning up to the senior leadership level, and work with key professional partners like recruiters to boost performance, productivity and staff wellbeing.

One example is the poor conditions of roadside facilities that have a direct impact in the demographics of the sector, with young people and women staying away, which has an impact on diversity.xibility in the points-based immigration system and a visa route for low skilled workers.

Allow flexibility in the points-based immigration system and a visa route for low skilled workers

 


Sector specific insights

Industrial Sector Insights

For nine in ten recruiters (95%), that source candidates in the industrial sector, labour shortages were their biggest concern. Followed by skills shortages (65% - two in three) and retaining your workforce (53% - one in two).

Other concerns include:

  • 24% - Recruiting from abroad/new immigration system,
  • 20% - Regulatory changes related to Brexit,
  • 17% - Ongoing uncertainty around pandemic and reintroduction of public health restrictions,
  • 13% - Ability to win new business/clients.

Nine in ten (98%) say they spend more time working on vacancies since before the pandemic:

  • 54% - It takes longer to find suitable candidates (up to a month),
  • 43% - It takes a lot longer to find suitable candidates (more than a month).

When it comes to sourcing suitable candidates 69% of respondents said that the current immigration rules are preventing workers from EU countries from taking on work in the UK; while another 69% cited skills shortages as a barrier.

Other notable mentions include:

  • 61% - Right to work changes for EU workers,
  • 54% - Inability of your client to offer competitive salaries,
  • 47% - The end of the EU Settlement Scheme,
  • 46% - Workers are reluctant to change jobs in the current climate.

71% of respondents are currently working on at least 30% more vacancies than before the pandemic:

  • 38% - Extremely higher (+50%),
  • 33% - Much higher (+30%).

Almost four in five recruiters (78%) don’t know what a skills bootcamp is, with only one in ten (9%) interested in taking part in the scheme.

Biggest changes to recruiters’ operations in the last six months:

  • 58% - Simplified our recruitment process,
  • 53% - Increased starting salaries,
  • 29% - Introduced flexible working,
  • 20% - Changed our vacancies' requirements.
Hospitality Sector Insights

For all the respondents who recruit in hospitality (100%) labour shortages were the biggest concerns for the remainder of the year. This was followed by skills shortages (53%) and workforce retention (42%).

Other concerns include:

  • 32% - Ongoing uncertainty around pandemic and reintroduction of public health restrictions,
  • 21% - Regulatory changes related to Brexit; Recruiting from abroad/new immigration system.

All respondents (100%) say they spend more time working on vacancies since before the pandemic:

  • 58 % - It takes a lot longer to find suitable candidates (more than a month),
  • 42% - It takes longer to find suitable candidates (up to a month).

When it comes to sourcing suitable candidates 68% said that the current immigration system is the main barrier. Other notable mentions include:

  • 63% - Skills shortages,
  • 63% - Right to work changes for EU workers,
  • 53% - The end of the EU Settlement Scheme,
  • 47% - Inability of your client to offer competitive salaries,
  • 42% - Workers are reluctant to change jobs in the current climate; Workers personal preferences around their lifestyle, career choice and priorities.

58% of respondents are currently working on at least 30% more vacancies than before the pandemic:

  • 32% - Extremely higher (+50%),
  • 26% - Much higher (+30%).

Almost seven in ten recruiters (68%) don’t know what a skills bootcamp is, with only two in five (21%) interested in taking part in the scheme.

Biggest changes to recruiters’ operations in the last six months:

  • 61% - Simplified our recruitment process,
  • 56% - Increased starting salaries,
  • 39% - Introduced flexible working.
Logistics and Drivers Sector Insights

For more than nine in ten recruiters (94%) sourcing in logistics and drivers labour shortages were the main concern for the remainder of the year.  While skills shortages were a concern for three in five (62%).

Other major concerns:

  • 51% - Retaining staff,
  • 31% - Recruiting from abroad/New immigration system,
  • 23% - Regulatory changes related to Brexit.

Almost all (97%) say they spend more time working on vacancies since before the pandemic:

  • 49% - It takes longer to find suitable candidates (up to a month),
  • 48% - It takes a lot longer to find suitable candidates (more than a month).

The main factors, recruiters cited as barriers to them finding suitable candidates were the ongoing skills shortage crisis (72%), current immigration system (66%), and the inability of their clients to offer competitive salaries (62%).

Other notable mentions include:

  • 58% - Right to works checks for EU workers,
  • 49% - The end of the EU settlement scheme,
  • 40% - Workers are reluctant to change jobs in the current climate.

69% of respondents are currently working on at least 30% more vacancies than before the pandemic:

  • 40% - Extremely higher (+50%),
  • 29% - Much higher (+30%).

Two in three recruiters (67%) are not aware of skills bootcamps, with only one in five (20%) interested in taking part in the scheme.

Biggest changes to recruiters’ operations in the last six months:

  • 45% - Increased starting salaries,
  • 40% - Simplified our recruitment process,
  • 30% - Introduced flexible working,
  • 25% - Included a joining bonus.

 

 

Construction Sector Insights

For nine in ten recruiters (95%), that source candidates in the construction sector, labour shortages were their biggest concern. Followed by skills shortages (78%) and workforce retention (43%).

Other concerns include:

  • 32% - Ongoing uncertainty around pandemic and reintroduction of public health restrictions,
  • 16% - Regulatory changes related to Brexit; Recruiting from abroad/new immigration system.

Nine in ten (98%) say they spend more time working on vacancies since before the pandemic:

  • 57% - It takes longer to find suitable candidates (up to a month),
  • 41% - It takes a lot longer to find suitable candidates (more than a month).

When it comes to sourcing suitable candidates 76% said that the skills shortages are the main barrier.

Other notable mentions include:

  • 59% - Current immigration rules preventing workers from EU countries from taking on work in the UK,
  • 54% - Workers are reluctant to change jobs in the current climate; Inability of your client to offer competitive salaries; Right to work changes for EU workers,
  • 43% - The end of the EU Settlement Scheme.
  • 54% of respondents are currently working on at least 30% more vacancies than before the pandemic:
  • 30% - Extremely higher (+50%),
  • 24% - Much higher (+30%).

Three in five recruiters (65%) don’t know what a skills bootcamp is, with only one in five (14%) interested in taking part in the scheme.

Biggest changes to recruiters’ operations in the last six months:

  • 50% - Increased starting salaries; Introduced flexible working,
  • 36% - Simplified our recruitment process.

 

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Further data


A guide on engaging your local MP on worker shortages

Please find a template letter to reach out to your local MP with a view to arranging a meeting between your organisation, the REC, and the MP regarding the labour shortages.


Parliamentary Questions

Official portrait of Alex Cunningham crop 2

Question by Alex Cunningham - for Department for Business, Energy and Industrial Strategy

Labour

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the implications for his policies of the findings of the Recruitment and Employment Confederation, published 14 September 2021, that labour shortages are the main concern of 88 per cent of recruiters for the remainder of 2021.

Paul scully

Answer by Paul Scully

Conservative 

The Government is working closely with industry to address sector challenges, which are being faced by countries around the world.We have expanded the Seasonal Workers Pilot to 30,000 visas for workers to come to the UK for up to six months; and have introduced measures to help tackle the HGV driver shortage.

Full answer here

Official portrait of Alex Cunningham crop 2

Question by Alex Cunningham - for Department of Transport

Labour

To ask the Secretary of State for Transport, what assessment he has made of the effectiveness of the Driver Certificate of Professional Competence; and whether he plans to amend the requirement for that certificate to help tackle driver shortages.

Official portrait of Andrew Stephenson MP crop 2

Answer by Andrew Stephenson

Conservative

In 2016, the Government published a post-implementation review of the Driver Certificate of Professional Competence (DCPC) 2007 regulations. The review considered the extent to which the regulations improved road safety and increased the professionalism of driving as an occupation.

View full answer here

Official portrait of Alex Cunningham crop 2

Question by Alex Cunningham - for Department for Business, Energy and Industrial Strategy

Labour

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent discussions he has had with the Home Secretary on the introduction of temporary visas for low skilled workers to supply sectors reporting labour shortages.

Paul scully

Answer by Paul Scully

Conservative

My Rt. Hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has regular discussions with my Rt. Hon. Friend the Home Secretary on a range of issues, including making sure businesses have appropriate access to talent from across the world so that we can build back better from the pandemic and support the national economic recovery.

View full answer here.


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