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The Perfect Storm for Labour Shortages

Over the past few weeks you will undoubtedly have seen no end of articles about labour shortages in UK industries, especially in distribution, food manufacturing and hospitality. Irrespective of political persuasion or views it is beyond doubt that certain events, some taken by our own volition, others perhaps unavoidable have led to this perfect storm.

It could certainly be argued that leaving the EU alone may have had less negative effect if the Covid-19 crisis had not hit at the same time.

But given this concurrence the UK workforce has not only lost a large portion of its EU workers because of Brexit and anti-EU rhetoric but difficulties caused though lockdown and quarantine, and even opportunities from furlough, have caused many to return to their home countries.

The BBC are reporting that others within the UK workforce have been reassessing what matters to them. This has caused more people to retire early or leave employment to set up on their own. 

Whatever the reason it is beyond doubt that the size of the workforce has diminished. The jobsite, Adzuna, showed that there were more than 1.1 million advertised job vacancies in a week towards the end of July, including nearly 85,000 vacancies in logistics and warehousing, an increase of more than three-and-a-half times than a year ago. Likewise retail vacancies have risen to 31,000 in last month, and 70,000 plus hospitality jobs were available for the ninth consecutive week. To look at it another way the Resolution Foundation has calculated that the total hours worked in the UK is now down 5% compared to pre-crisis. 

How long will this go on? 

The important question to now consider is whether or not this is a temporary situation? Has the lockdown and pandemic permanently changed societies perspective and do industries have to change to react to this? Will online shopping and deliveries be the new future? Will the discovery of new holiday opportunities within our own borders prevent families holidaying in the sun? Is it the end of the line for the abundance of coffee and sandwich shops in city centres?  Will they have to relocate to the suburbs with homeworkers? As time goes by we will get answers to some of these questions, this may come sooner than you think with the furlough scheme ramping down (80% of those furloughed in the first two lockdowns are now back to work) and government now beginning to persuade industry back to the office. But, to almost add insult to injury the so called “pingdemic” is now causing additional problems as people do return to normality, with vast numbers being forced to self-isolate. 

No doubt there are many even more complex issues behind this apparent lack of available employees. It has been suggested that fear of missing out on support schemes such as furlough have meant that people have not moved around between jobs anywhere near as much as normal. The fact that new employees must have been in their post for a number of weeks before being entitled to this pandemic related benefit means that moving jobs has perhaps become a risky option. I have seen clients wanting to use lockdowns and reduced demand to enable training, but social distancing and other pandemic measures have unfortunately prevented this, so skill issues have begun to be a problem. This has especially been seen with HGV drivers which effectively lost 12 months of training and testing as government offices were closed, alongside reforms to IR35 forcing contractors onto company payroll with additional cost implications. Just last week saw Arla suspend deliveries to 600 stores whilst the Road Haulage Association (RHA) estimated that there was a shortfall of 100,000 drivers. The response by the Transport Secretary, Grant Shapps, has been to relax the rules by extending the number of hours a driver can legally drive in a day. This may be seen as a bit of a temporary sticking plaster with health and safety implications. The RHA’s CEO responded by saying “Loading more hours on to drivers that are already exhausted is not the answer, it will only push more to leave. It also risks road safety” 

Is this a paradigm shift in the employee / employer relationship? 

As demand for employee resource and hours is not met this could have instigated a power shift towards the employee as increasingly more pay is demanded. Organisations have started offering joining bonuses and higher pay rates for unsocial hours, Tesco and Asda reportedly offering £1000 to new HGV recruits and Elysium Healthcare a huge £5000.  But once again as people reassess their situation it is becoming more evident that not just pay but conditions and the right to work flexibly in terms of time and place are also becoming a prerequisite. 

All in all, the need for businesses to provide an attractive place to work has never been more important. Recent backlash against Brewdog being seen as having a “toxic workplace culture” emphasises this. There is likely to be increased pressures to improve pay, shift patterns, flexibility and conditions of work in general to reflect this new employee power. Organisations would do well to place emphasis on career progression, health and wellbeing and training opportunities if they are to thrive. Unions are now pushing for a living wage of £10 ph, equal pay for young workers, minimum hours (more secure contracts), “proper and paid” rest breaks and timely consultations on rota changes. A Unite union spokesman saying that the crisis would not be resolved until employees treat workers as people not just exploitable commodities.  

So, we see that labour, irrespective of the historic reasons and shorter-term future political changes, is likely to become a more expensive attribute. Not only this, with pressures from employees and employers alike to enable flexibility, it will also become a more complicated aspect of business life. Once you manage to detail and contract these newly required ways of working it will become a greater business requirement to monitor the availability of hours and skills whilst facilitating the newly required flexibilities. Ensuring equitable treatment of less social hours and making sure not only absence is monitored and the reasons behind it understood whilst dealing with any consequences will become a greater imperative. 

Working in Partnership with You and Your Employees 

Crown Workforce Management has been helping businesses design and implement more flexible working schemes for decades. Our workforce management system gives you the power to manage your workforce more flexibly and efficiently than ever before. Our secure mobile app lets businesses support remote workers in exactly the same way as on-site staff, allowing them to sustain new and exciting ways of working. 

Meanwhile, our consultants are with you every step of the way as you reshape your company’s working arrangements leading to not only improvements in your workplace culture but also enabling better control and understanding of workforce costs. 

We can help businesses to:

  • Analyse, understand and predict their demand profiles 
  • Design and develop optimum resource profiles and shift patterns, enabling not only improved productivity but also work-life balance, motivation and reward 
  • Implement solutions in partnership with your employees 
  • Help you manage your future flexible working solutions – monitoring hours usage, absence and planning day to day flexibility requirements 

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