Relentlessly tight labour market hindering business growth

Businesses across the UK are desperately struggling to find workers and the latest labour market figures add to the realisation that there is no opportunity for them to expand their operations in the near future.

by | 17 Jan, 2023

Jane Gratton, head of people policy at the British Chambers of Commerce, said the ONS figures came as no surprise to businesses up and down the country that are desperately trying to fill record numbers of vacant roles.

“With over 1.16 million job vacancies, businesses are still experiencing a relentlessly tight labour market. If firms can’t hire the staff to fulfil their order books, any room for growth is extremely limited,” she said.

“Government is heading in the right direction with its plans to help bring economically inactive workers back into the labour force, especially older workers who left in their droves when lockdown ended.

“But we need to see more action. There must be carefully tailored careers advice, job seeker support and rapid re-training opportunities to help employers harness the skills and experience of older workers.

“Businesses also need to play their part, by engaging with local skills and employment opportunities, adopting flexible working policies where possible and helping older workers develop their skills for the changing workforce.

“Finally, Government must hear our calls to urgently reform the Shortage Occupation List to help businesses fill urgent job vacancies when they cannot recruit locally. The List should include job roles below RQF Level 3 for sectors where there is clear evidence of a national shortage.

“The UK’s tight labour market is one of the top challenges preventing our businesses and economy from growing. It’s no use simply talking about growth if we are not prepared to take action on it.

“With an anaemic economy and low productivity, Government must take immediate steps to ease the considerable labour pressures on businesses — we can’t afford to wait any longer.”

UKHospitality chief executive, Kate Nicholls, said the ONS labour market data reinforces the challenging recruitment landscape hospitality businesses are facing, with vacancy rates still 63 per cent higher than pre-pandemic levels.

“This continues to restrict the ability of businesses to trade and our recent Future Shock report illustrated the impact that is having, with businesses restricting trading hours, reducing opening days and simplifying menus as a result of staffing shortages,” she said.

“Wages in the sector have been steadily rising for a long time, reflecting the efforts of businesses to both attract staff and keep up with inflation. Our latest quarterly survey showed staff pay was up 12 per cent, joining energy, food and drink as the most significantly rising business costs.

“There is not a silver bullet to solve this recruitment crisis but we do need to see ambition from Government, ranging from investment in skills, apprenticeships and education to immigration solutions where necessary.

“If the sector is able to access the people it needs to fill essential roles, businesses will be able to trade more freely and return to their potential to deliver economic growth and create even more job opportunities.”

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