Labour and skills shortages "accelerating", survey finds

There has been a "shock drop" in the number of both EU and non-EU citizens employed in the UK, making recruitment harder overall for employers, according to the latest Labour Market Outlook.

Image: Pixabay (CC0)
Image: Pixabay (CC0)

The quarterly cross-sector survey of 1,000 employers is published by the Chartered Institute of Personnel and Development (CIPD) with recruiter The Adecco Group.

It found that among employers with vacancies, 70% eport that at least some of these are proving hard to fill, up from 66% in summer and 61% in spring. Just over half of these employers say they have increased salaries as a result.

Similarly, 44% of employers believe it has become more difficult to fill vacancies over the past 12 months, while 34% say staff retention has become harder over the same period.

However overall recruitment demand remains strong, with the survey’s net employment balance – a measure of the difference between the proportion of employers who expect to increase vs. decrease staff levels – remaining "extremely positive" at +22.

According to the latest official data, the number of non-UK-born workers in the UK decreased by 58,000 between Q2 2017 and Q2 2018, compared with an increase of 263,000 from Q2 2016 to Q2 2017 - with non-EU nationals making up the bulk of both figures.

"Contrary to the popular narrative, the labour supply shock is being driven primarily by falling interest from migrants from outside the EU," the CIPD said.

"Looking ahead, labour supply looks set to be further constrained from 2021 when migration restrictions for EU citizens are introduced, especially for lower-skilled workers," it added.

The survey also found that a third of employers who employ non-EU citizens say that the administrative burden of using the current points-based system, which will most likely be also adopted for EU citizens from 2021, is too great.

CIPD senior labour market analyst Gerwyn Davies said: "This underlines the risk that more non-UK-born citizens and employers will be discouraged from using the post-Brexit system if more support is not provided and it is not made simpler, fairer and more affordable, especially for lower-skilled roles."

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