As we go into 2022, some of the worst hit sectors for job shortages remain in production, logistics and warehousing. The arrival of the Omicron variant hasn’t helped the issue, with the public sector and health service predicted to be hit even harder.   

This is causing a perfect storm that is hitting the UK’s economy and labour market, with a combination of a Brexit-induced exodus of EU staff, Covid-19 illness and self-isolation, and structural challenges in certain sectors meaning many HRs and employers are struggling to get the staff the business needs.  

It’s an issue that is likely to hit many other industries, as demonstrated by the latest labour market figures from the ONS, which showed that job vacancies between September to November 2021 rose to a new record of 1.2 million, an increase of 434,500 from the pre-coronavirus January to March 2020 level. Thirteen of the 18 industry sectors, including manufacturing, wholesale and retail and transport, showed record highs.   

But how are employers responding to skills shortages and will this be enough to fill the gaps? Retailers, for example, know what’s going on and they’re just as at risk as the supply chain. A lot of companies are beginning to throw money at the problem via wage increases or sign-on bonuses. Some are taking it to extremes – with Amazon, GIST and many others offering performance-related signing on bonuses of £1k, £3k and even £5k to new starters. Whilst this supports those businesses, it leaves many others at a loss.   

Wages are on the increase in these sectors. Businesses will have to pass this increased cost of production/operation down the supply chain who, in turn, will pass it on to us – the consumers. For small businesses, in particular, with smaller margins/less economies of scale, wage inflation can have a devastating effect on their longer-term viability and it erodes their profits and working capital. Now that we’re into a new year and the Christmas rush has subsided, it will be very interesting to see if hourly rates abate to what would be considered normal levels.  

From a candidate sourcing perspective, HR teams and businesses in general are diving deeper into online avenues more than ever before and finding that jobs boards are only a small part of the options available to them. Many still think they are the only option. Understanding the best way to use internet analytics isn’t a 10-minute exercise though and it’s that sort of expertise that HR is relying on to help widen the net on reaching talent. There are now Artificial Intelligence platforms capable of matching the wealth of job offers available with the demands from job seekers, with unprecedented matching speed and accuracy in a fair, inclusive and non-discriminatory way. These tools use behavioural and cognitive functions that better understand the candidates’ profiles and aspirations and match these against the suitability of the jobs available – improving the likelihood of a good match and saving time all round.  

But the threat of the skills crisis to businesses remains and many are struggling and dealing with a lack of staff, in the wake of Brexit and the pandemic. The situation is bad enough that it may signal the end of the road for some. Businesses should be giving everyone a chance to develop their skills and progress in their work, enabling recruiters to source from large and diverse talent pools. It could be argued that if companies were more open to part-time work and more lenient on shift start times, it could be easier to use not just older people who want some work (but not necessarily full-time work) but also students who could work around their studies, single parents and carers too. Temporary labour is an obvious way of addressing skills shortages, but staff are already in high demand. 

Simply put, the government needs to review the glaringly obvious fact that a lot of the work needed to put products on our shelves is manual. It’s clear to everyone involved in the chain, from production to all areas of logistics, that there simply are not enough people in the UK willing to undertake this work. In most cases, automation is too expensive to be viable or just not practical. Reskilling people for essential but labour-intensive work is not needed; people are needed.  

The only way to achieve that is to re-look at the UK immigration points based system, not from a political perspective but from what UK PLC really needs to perform.