Employers facing ‘perfect storm’ of staff shortages as economy reopens, says CBI chief

Industries from haulage to hospitality are facing a “perfect storm” of issues creating staff shortages as the economy reopens, the president of the CBI is warning.

Lord Bilimoria said the departure of overseas workers during the pandemic, who have not since returned, was among the factors causing headaches for employers.

He also said there was a need to update the “shortage occupation list” which makes it easier to hire skilled workers from overseas where roles are hard to fill from the UK workforce.

Meanwhile the success of the “lifeline” furlough scheme, in continuing to pay temporarily laid-off workers, has reduced the pool of labour from which employers who need them now can hire.

Hauliers, hospitality and food and drink suppliers are among the worst affected, Lord Bilimoria said – in a speech being delivered on Tuesday to the Recruitment and Employment Confederation.

The speech comes amid reported examples of shortages such as restaurants having to close for lunchtime sittings due to lack of staff.

The CBI president said: “As the weeks go by, more and more businesses are re-opening. It’s fantastic.

“But as lockdown restrictions lift, we’re also seeing a surge in the demand for labour – and we know many businesses are already struggling to recruit.”

Lord Bilimoria pointed to industry figures showing availability of candidates shrinking at its fastest rate since 2017.

“We’ve got a perfect storm of factors coalescing,” he said.

“During the pandemic, many workers from overseas left the UK to return home – hitting the UK’s hospitality, logistics, and food processing industries particularly hard.

“Meanwhile COVID has added major uncertainty.

“And the furlough scheme ─ a lifeline, for millions of employers and employees alike, is becoming a strange paradox for policymakers.

“The more successful the Job Retention Scheme is – and it has been very successful so far – the smaller the talent pool for businesses, here and now.”

He said a shortage of chefs, already a problem before the pandemic was “now even more acute” while haulage operators were “desperately searching for more drivers”.

The CBI president called for employers to do more to widen recruitment, such as through apprenticeship schemes, and to invest in innovation.

He also said the shortage occupation list needed to be updated to include butchers, bricklayers and welders as recommended by the government’s own advisers in September – and for a commitment for the list to be reviewed annually.