CBI says labour supply problems could last for up to two years
Labour supply problems could last for up to two years and will not be solved by the end of the Job Retention Scheme, according to the Confederation of British Industry.
A lack of HGV drivers has dominated the headlines in recent weeks as retailers struggle to get new supplies on the shelves of their shops, but the CBI has warned that the challenge extends well beyond this. Due to the resulting disruption to supply chains, there are now increasing calls for action in the run-up to Christmas.
With the crisis looking like it will not be resolved any time soon, the CBI’s director-general Tony Danker has set out priorities for both business and the Government to guard against labour constraints harming the UK’s economic recovery.
He said three things the Government could do now include marrying skills policies to roles with the highest unfilled vacancies, adding greater flexibility to the Apprenticeship Levy and using the government’s own skill-focused immigration levers to alleviate short-term pressures.
He is also calling on businesses to play their part by continuing to invest in training, automation and digital transformation, and doing more to attract and retain staff from a diverse talent pool.
The CBI’s labour market intelligence is built on data from the organisation’s recent economic surveys and member consultation, which point to labour shortages as a growing constraint on businesses’ plans to invest in the year ahead.
Introducing the CBI’s labour market insights, Danker said: “Labour shortages are biting right across the economy. While the CBI and other economists still predict growth returning to pre-pandemic levels later this year, furlough ending is not the panacea some people think will magically fill labour supply gaps. These shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery.
“Building a more innovative economy – coupled with better training and education – can sustainably improve business performance, wages and living standards. But transformation on this scale requires planning and takes time. The Government’s ambition that the UK economy should become more high-skilled and productive is right. But implying that this can be achieved overnight is simply wrong. And a refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.
Let’s be clear – employers back existing Government schemes to get people back into work. And businesses are already spending significant amounts on training, but that takes time to yield results, and some members suggest it could take two years rather than a couple of months for labour shortages to be fully eliminated.”
