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Skills shortages starting to bite in sectors employing EU nationals

UK employers are struggling to fill roles with the right candidates because of both labour and skills shortages

Labour and skills shortages are starting to bite in UK sectors that employ a high number of EU nationals, according to the latest Labour Market Outlook from the CIPD and The Adecco Group.

Despite a near-record number of vacancies – 748,000 according to the latest Office for National Statistics (ONS) data – the report found that UK employers are struggling to fill roles with the right candidates as a result of both labour and skills shortages.

Low-skilled sectors that typically employ a large number of workers from the EU are facing particular recruitment challenges, with vacancies in retail and wholesale, manufacturing, health and accommodation, and food services making up almost half (45%) of all vacancies.

Official data from the ONS suggests that growth in the number of non-UK EU nationals in employment in the UK has slowed sharply in recent months.

The public sector looks set to be severely affected, with 43% of education and 49% of healthcare sector employers surveyed in the Labour Market Outlook saying they believed EU employees to be considering leaving their organisation and/or the UK in 2017.

Gerwyn Davies, labour market adviser for the CIPD, warned that employers need to consider what they will do when faced with unfilled vacancies.

“The most recent official data suggests there has been a significant slowdown in the number of non-UK nationals from the European Union in work in the UK,” he said. “This is creating significant recruitment challenges in sectors that have historically relied on non-UK labour to fill roles and who are particularly vulnerable to the prospect of future changes to EU immigration policy. With skills and labour shortages set to continue there’s a risk that many vacancies will be left unfilled, which could act as a brake on output growth in the UK in the years ahead.

“Employers need to start collecting data about their workforce and review their approach to workforce development and training to avoid a squeeze on skills. Employers in sectors like retail, hospitality, and care will need to work much harder to attract candidates and combat labour shortages by improving the attractiveness of their jobs through better line management and job design, developing closer links with local educational institutions, and improving pay and employment conditions where possible.”

John Marshall, CEO of Adecco UK & Ireland, said that employers need to be prepared for change. “The big decisions Britain took last year are beginning to show in the UK labour market,” he said. “It is encouraging that some employers are beginning to look to new solutions for their future workforce with investment in retraining and apprenticeships, but many more need to begin this planning and investment in their workforce.

“While the outcome of Brexit negotiations is still uncertain, employers’ access to EU migrant workers is likely to change. Investing in young people is a solid long-term strategy, but employers also need to face the facts and prepare for a situation where they might lose access to significant numbers of skilled EU workers in the near future.”