17 Apr 2024

Training & development key to labour shortages

Skills gap

I think I would not be completely wrong in saying that the first month of the current new Prime Minister and Chancellor could have gone slightly better. The impact that the mini budget will have on the UK economy is yet to fully be understood, however the dramatic fall in the Pound, increases in fixed interest rates by banks, and the intervention of the Bank of England in the markets can only be described as worrying. On top of this and of significant concern to manufacturers are the findings from the recent annual Employment Trends Survey by the CBI and Pertemps Network Group, which highlights the very real problem of labour shortages.

The survey highlights that a majority now believe the issue of labour shortages is a real threat to labour market competitiveness, with shortages in the labour market having a material impact on firms’ ability to operate at full capacity, let alone grow.

Many businesses have responded by investing in training, while also increasing pay and improving their offer to staff to help retain workers and attract new recruits. However, this has consequences.

I therefore agree with Matthew Percival, CBI Director for Skills & Inclusion who commented that although businesses are pulling every lever they can to attract and retain employees, this is making productivity boosting investments like training and automation harder.

As he explained, to go for growth and build a higher-wage economy we will need to ease shortages to create the conditions for higher investment. That means helping more British workers to overcome barriers into the workplace, like a lack of affordable childcare, and taking a pragmatic approach to immigration.

The current economic situation has exacerbated the problem of labour shortages which unfortunately will not be going away in the short term. Although there is no single thing that can be done to solve the labour issues as highlighted by Carmen Watson, Chair of Pertemps Network Group, supply chains, businesses and recruiters need to collaborate to come up longer-term, sustainable, recruitment strategies.

Ultimately, as Watson says, businesses will need robust attraction and retention policies, with investment in training and development and a focus on diversity, equality, and inclusion, as well as the environmental performance of the organisation.

Company info: Smart Futures