Worker shortages intensify despite employers ramping up hiring

UK firms’ struggle to find candidates to fill roles continues to intensify amid severe shortages of workers across the economy, according to new figures released today.

Latest data from the Recruitment and Employment Confederation shows nearly 200,000 new job ads were posted in the last week alone, highlighting how desperate employers are to hire new staff.

UK businesses have been struggling to deliver normal services due to a sharp reduction in the supply of workers triggered by the Covid crisis prompting a flight of workers from the country and stricter immigration rules after Brexit.

Workers have been reluctant to leave furlough and return to jobs due to concerns roles may not be viable in the long term.

Younger people are returning to education instead of remaining in employment, while the pandemic has encouraged older workers to take early retirement. High levels of economic inactivity is also shrinking the pool of available labour.

Elevated rates of self-isolation amid still relatively high Covid cases is temporarily restricting workers from fulfilling their roles.

A scarcity of workers, combined with supply chain snarl ups, have led to supermarkets warning shelves could be empty at Christmas, while several high street fast food chains have taken some meals off their menus.

Data from the Confederation of British Industry released last month shows retailers’ stock levels are the lowest level since the 1980s, while road haulage chiefs have estimated there is a 100,000 shortfall in the number of HGV drivers.

Neil Carberry, chief executive of the REC, said: “Demand for workers remains very high across the economy and shows no signs of weakening.”

“With businesses in the particularly squeezed food, logistics and hospitality sectors starting to gear up for Christmas, the months ahead could be difficult – even with a large number of people coming off furlough in August and September.”

The REC’s research showed the last five weeks have recorded the highest weekly job ads since mid-December last year, indicating the labour market recovery is being impeded by greater reticence to find new jobs.

However, Carberry said the current mismatch in the supply of and the demand for workers in the labour market may simply be a short-term symptom of the rapid reopening of the UK economy following months of Covid-related closures.

“It is worth remembering that some of this could be short-term. Large numbers of people are finding new work post-pandemic as the economy reshapes,” he added.

“But that realignment will take time, and there is good evidence to suggest that the market will remain tight for some years to come, even if the current crisis passes.”