Staff shortages hitting 44% of UK firms, says IoD

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Around 44% of UK businesses are experiencing staff shortages in a trend that could put the country’s economic recovery at risk, according to the Institute of Directors (IoD).


In a survey of over 700 directors, the IoD also flagged that of those affected, 65% attributed the shortage of workers to a long-term skills gap in the UK, while 4 in 10 said they were struggling with a lack of potential labour from the European Union. Around 21% also said shortages were being caused by staff having to self-isolate after exposure to someone who tested positive for COVID-19.


The IoD survey also highlighted that roles for ‘professionals’ and ‘associate professionals’ were proving to be the most challenging to recruit for, with ‘skilled tradespeople’ also being in high demand. Perhaps unsurprisingly, the hospitality sector was the segment most affected by the lack of workers.


Around three quarters surveyed also said the current situation was impacting salary costs. Of those affected, half said they were witnessing wage costs increasing by over 5%.


To combat the shortages, 81% supported loosening immigration requirements to ease the pressure on labour markets, while other proposals included increasing investments in training workers, cutting non-wage costs for employers such as national insurance contributions and widening tax relief on research and development.


“Employers are keen to re-build following an incredibly turbulent 18 months for business. But the issue of labour shortages is proving disruptive across a huge range of sectors and at all levels. Ensuring that workers are available with the right skillset to perform effectively is a crucial pre-requisite for recovery”, said IoD senior policy advisor Joe Fitzsimons.


“The long-term skills gap combined with both a reduced talent pool since leaving the EU, and the immediate impact of the ‘pingdemic’, are the primary pressure points. The resultant rising wage bill is the next bitter pill to swallow. It is understandable that directors are very concerned. Although there is light at the end of the tunnel, with covid restrictions continuing to ease, businesses are still relying on the government to address the ongoing challenges within the labour market. There are actions the government should take in the immediate term, although they must not neglect the longer-term skills gaps employers are facing”, they added.

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