Last reviewed 4 November 2021

A report on addressing skills and labour shortages post-Brexit has been published by the Chartered Institute of Personnel and Development (CIPD).

It argues that the Government’s ambition to move the UK to being a “high wage, high skill” economy that is less reliant on migrant workers will be undermined unless there are short-term interventions.

In particular the Government must re-examine the urgent case for a temporary immigration “safety valve” and for long-term reform of skills policy, the CIPD suggests.

Available at https://www.cipd.co.uk/knowledge/work/trends/skills-labour-shortages, the report is based on a survey of more than 2000 employers and focus groups with employers in low-paying sectors.

It finds that most labour and skills shortages currently facing the UK pre-date the pandemic and are therefore unlikely to be resolved by the gradual return to pre-pandemic norms.

For example, the CIPD’s figures show that, in 2018 and 2019, transport employers received a median number of 50 applicants for the last low-skilled vacancy they attempted to fill, but in 2021 this had fallen to just 15.

Some employers pointed to the reduction in labour supply from the EU as a factor — most notably in hospitality and transport and storage; sectors which are particularly reliant on EU workers.

CIPD recommendations

The report calls for:

  • a temporary job mobility scheme for young EU nationals to act as a safety valve to ease immediate, acute labour shortages

  • reform of the Apprenticeship Levy to create a broader, more flexible training levy to boost employer investment in skills

  • the provision of £60 million by the Government to fund a business improvement consultancy service via the Growth Hub network to help more firms invest in new technology and improve their people management and workforce development capability.

CIPD senior labour market adviser, Gerwyn Davies, said: “There’s promising evidence that some employers are getting better at sourcing labour and improving job quality in response to labour shortages. Measures such as providing flexible working arrangements can also help attract and retain people and is an increasing expectation from candidates as we recover from the pandemic”.

Comment by Kate Palmer, HR Advice and Consultancy Director at Peninsula

Recruitment and retention are major problems affecting organisations from a diverse range of industries at the moment.

Evidence clearly shows that there are record levels of job vacancies but low uptake among applicants. With individuals making flexible working arrangements, pension contributions and family-leave entitlements a high priority, businesses that fall short of these expectations risk losing their ideal new employee.

Similarly, those who promote enhanced terms take talent away from organisations who do not have the resources or abilities to match their offering.

This jumping between employers stagnates the progress of alleviating labour shortages. A collaborative approach to support businesses and employees equally may be the only way to encourage real change in this area.