Image of a welder.

The UK’s Labour Shortage

Pure Staff specialise in the Industrial, FMCG, and Driving/Transport marketplaces and our recruitment teams are in close regular contact with hundreds of businesses each day. We wanted to take this opportunity to share our thoughts and our customers feedback on the UK’s worsening labour shortages ahead of what we expect will be the most challenging peak season in decades. We would also like to share some potentially useful insights into how some of our customers have been able to improve their value proposition to temporary workers which have in turn aided Pure Staff in improving candidate attraction and retention for their businesses.

The truth is labour supply challenges have been prevalent for years, but we are now experiencing a further tightening of the market, unlike anything we have seen. These shortages are not only affecting the Transport industry but also other industries too including Food Processors, Warehouses and Manufacturing businesses. The world has changed in many ways since the pandemic which has, in turn, changed how many industries operate, for example, the retail industry has seen a huge shift from physical stores to online solutions which has created an increased demand for labour in warehouses. Businesses operating out of locations with a high concentration of warehouses/factories/distribution centres are being hit the hardest.

We cannot reasonably predict when the labour shortage will pass and fear that despite furlough coming to an end the shortages will worsen as businesses try to cope with Black Friday and Christmas peaks. Despite recently announcing several measures to help tackle shortages the governments messages seem clear in that businesses will need to find the workers they need from the resident population with a stronger focus on better pay and better working conditions.

 Government officials, Industry bodies, Trade Unions, Political Commentators, Accountancy Firms, Industry Leaders and many other experts have all provided their insights and opinions into the causes of the UK’s labour shortage but in our view, we are experiencing the perfect storm of everything including; Brexit, Increased demand, Pandemic/Pingdemic, Skills shortages, IR35 and more recently the Fuel Crisis.

 

Improving Recruitment / Retention

Pure Staff understand that many businesses will be struggling right now after getting through lockdowns. We understand that not all businesses are in a position to make wholesale changes or investments at the moment and that many otherwise financially strong businesses are currently operating on lean margins and oftentimes tied into rigid pricing commitments with their customers and therefore can not pass cost increases up the chain easily or quickly.

We have however started to see several customers take steps towards making their businesses more attractive to candidates by improving worker pay rates, onboarding processes and where possible working conditions, this is already yielding positive results for them.

Recommendations for businesses currently experiencing critical recruitment and/or retention issues;

 

Review Pay Structures / Pay Rates for Temporary Workers.

  • Conduct a review of the local job market (we can assist you with this). Is your business a financially attractive proposition compared to other local businesses? It’s important to compare similar locations, job roles / skill-sets, shift times, overtime premiums and work patterns.
  • Are you able to financially reward loyalty throughout peak season? Many companies are paying loyalty bonuses to help ‘lock workers in’ throughout their busiest period.
  • Are you able to guarantee work for peak and beyond or offer a Temp to Perm placement?

There is no existing legislation that prevents businesses from paying their Temporary Workers more than their Permanent workers who do the same/similar work and we have noticed some businesses doing this on a ‘needs must’ basis while their permanent workforce negotiations are pending or being considered. Could this be considered for your business?

 

Review your Onboarding Process.

  • Candidate ‘shelf life’ is shorter than ever and it’s vital businesses do all they can to help facilitate a speedy yet safe onboarding process. Can your onboarding process be streamlined?
  • Review your Induction process. Can it be streamlined/tailored to a specific job role?
  • Are you able to provide CV/Interview feedback to your agency quicker?
  • Are you able to provide more flexibility in working patterns?

 

Review your Employee Value Proposition.

  • Have you conveyed all the features and benefits of working for your business to your agency to help them communicate this to their candidates? Do you truly understand why people stay with you? Do you understand why people leave your business? You could survey your existing employees to find out.
  • Why do people enjoy working for your business?
  • Why would potential employees want to join your business (above others)?
  • What do people think about your business?
  • Do people feel it’s different in any way from other businesses that they have worked for?

 

Summary

Since April 2021 (and the introduction of IR35 in particular) we have seen a huge spike in HGV Driver pay/charge rates. Transport businesses have historically become accustomed to pay and charge fluctuations as supply and demand change, but nobody could have predicted the pricing challenges that we have been hit with this year. Transport businesses should continue to monitor the market and ensure that they are furnished with the information they need to make informed decisions to safeguard their businesses going into a peak. Your agency should be able to assist you with this.

Warehouses / Distribution Centres / Manufacturing & Production businesses and Food Processors have typically been used to agency pay and charge increases as part of annual government-mandated increases to the National Minimum Wage (usually every April) – however, we are now starting to see more and more businesses increase their agency worker pay rates significantly higher than the National Minimum Wage to help ensure they are attracting and retaining a sufficient amount of agency workers. All businesses (not just Transport Businesses) experiencing shortages should review the local market and ensure their agency worker pay rates are where they need to be to compete.