Construction and manufacturing firms face severe recruitment challenges

According to the British Chambers of Commerce (BCC), at least 78 per cent of firms in these sectors reported having “significant issues” recruiting new staff.

The construction sector is facing the most severe recruitment challenges, with 83 per cent reporting difficulties. This is closely followed by production and manufacturing on 79 per cent, logistics on 79 per cent and hospitality on 78 per cent.

In the face of rising business costs, less than a third of employers (28 per cent) have increased their investment in the last three months. Smaller firms are even less likely to report an increase, at just 19 per cent.

The BCC called for “urgent reform” of the Shortage Occupations List (SOL) so that more people and job roles are covered. The SOL comprises roles deemed by the UK government to be in short supply within the labour market, with such roles afforded more relaxed eligibility criteria for sponsored work visa applications.

The BCC data was drawn from a survey of over 5,700 businesses for its Quarterly Recruitment Outlook for Q2 2022. 

Responding to the findings, the BCC’s head of people policy, Jane Gratton, said: “Businesses remain under huge pressure to fill jobs, but record levels of recruitment difficulty are showing no signs of improvement. Solutions are urgently needed, so that firms can keep their doors open throughout these tough times.

“We have written to the government outlining a three-point plan on how they can work with businesses to solve this.

“Firms must be encouraged to find new ways of unlocking pools of talent – by investing more in training their workforce, adopting more flexible working practices and expanding use of apprenticeships.

“Government must help employers invest in training by reducing the upfront costs on business and providing training-related tax breaks, and the SOL must be reformed to allow sectors facing urgent demand for skills to get what they need.

“The SOL is not currently fit for purpose and should be more flexible, so it supports firms experiencing a national recruitment crisis. Recruitment difficulties have been at record highs for a year.

“There are 1.3 million unfilled jobs in our economy and now fewer people in the workforce than before the pandemic. This is holding back productivity and growth, and employers are at their wits’ end. It is putting livelihoods at risk and damaging the economy.

“The government must reform the SOL criteria to include more jobs at more skill levels to give firms breathing space to invest in their workforce.

“Employers cannot wait for a new Prime Minister before this is sorted. Shortages are impacting not only on their ability to service order books but also on the morale and wellbeing of their people.

“The economic challenge we are facing is huge and unless we start to fill the hole caused by 1.3 million vacancies, we cannot get back to growth.”

Last year, a report found that the UK tech sector, which has been growing rapidly in recent years, is now under serious threat due to massive skills shortages.

Dr Graham Herries, co-chair of Innovation and Skills at the IET, said: “It is a huge concern to see a talent shortage within our technology sector and employers need to recognise that they play a significant role in addressing the skills gaps that they face – by recruiting more apprentices and re-training existing staff, as well as utilising the apprenticeship levy to address demand.

“The importance of engaging with local schools, colleges and universities with employees acting as STEM ambassadors and exciting future generations should be a priority for employers.”