Staff shortages at British businesses could hamper the country’s recovery from the pandemic and stoke inflationary pressures, the Institute of Directors (IoD) has warned.
A survey of more than 700 bosses showed that 44 per cent of businesses are currently experiencing staff shortages.
Of those affected, 65 per cent said the problem was caused by the UK’s long-term skills gap, while four in 10 are struggling with a lack of potential workers from the EU.
A further 21 per cent said the shortages were caused by the so-called pingdemic, with employees forced to self-isolate due to Covid contacts.
The survey revealed challenges for bosses in the professionals, associate professionals and skilled tradespeople categories. The sector worst hit by staff shortages is hospitality.
The IoD called on the government to increase its efforts to train workers, facilitate the issuance of working visas and reduce the costs of employment.
The proposals include extending the Kickstart Scheme beyond 2021, suspending the immigration skills charge for small businesses and temporarily slashing non-wage costs like employers’ NICs.
“Employers are keen to re-build following an incredibly turbulent 18 months for business. But the issue of labour shortages is proving disruptive across a huge range of sectors and at all levels. Ensuring that workers are available with the right skillset to perform effectively is a crucial pre-requisite for recovery,” said Joe Fitzsimons, senior policy advisor at the IoD.
“Although there is light at the end of the tunnel, with Covid restrictions continuing to ease, businesses are still relying on the government to address the ongoing challenges within the labour market. There are actions the government should take in the immediate term, although they must not neglect the longer-term skills gaps employers are facing.”