CBI warns labour shortage could drag on for two years

Research from the Confederation of British Industry (CBI) warns that the current labour supply problems facing the country could last for two years.

While some have suggested that the end of the Job Retention Scheme on 30 September could alleviate the issue with a wave of previously furloughed workers entering the job market, CBI director-general Tony Danker said the scheme’s end will not be a silver bullet.

“Standing firm and waiting for shortages to solve themselves is not the way to run an economy. We need to simultaneously address short-term economic needs and long-term economic reform,” Mr Danker said in a public message to MPs this week.

Noting that new immigration rules have made it difficult to replace workers who have left the UK, the CBI is urging the government to consider relaxing some of the requirements around foreign labour.

The CBI is asking the UK to place drivers, welders, butchers and bricklayers on the list of shortage occupations that are eligible for skilled worker visas.

The lack of lorry drivers has been making headlines, but Mr Danker called attention to a number of other industries in crisis due to staffing issues.

Hospitality, logistics and food processing have all been hit, according to the CBI.

“The CBI has heard from companies actively cutting capacity because they can’t meet demand, like the hoteliers limiting the number of bookable rooms because they don’t have enough housekeeping staff and can’t get linen laundered,” Mr Danker said. 

“Meanwhile, some restaurant owners have had to choose between lunchtime and evening services when trying to make the most of summer.”

Mr Danker noted that businesses had to play their part on long-term productivity reforms by continuing to invest in training, automation and digital transformation, and being proactive in their measures to retain staff.

And he said that the CBI and UK employers largely supported the existing government schemes to get people back into work, but that more immediate action was needed.

“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.”