Staff shortages are dragging down the UK’s attractiveness as a place to hire workers – and could lead to soaring prices, a business group has warned.
The Confederation of British Industry (CBI) said 76 per cent of firms had reported access to staff as a threat to the UK’s competitiveness, the highest proportion since the annual survey began 24 years ago.
And as employers are having to boost starting salaries to lure workers, the CBI cautioned that prices could rocket for consumers unless output increases with wages.
Stacking up: The CBI’s annual survey with recruitment firm Pertemps Network found that 24 per cent of businesses expect to increase pay above inflation
As Covid restrictions have eased, firms have struggled to recruit staff, with around 400,000 older workers thought to have taken early retirement after re-evaluatuing their life.
And university students who often fill part-time roles in hospitality have been less likely to take on a job. The pandemic and Brexit also led to many overseas workers leaving.
Matthew Fell, the CBI’s chief policy director, said: ‘As the UK’s labour market emerged from one crisis, it’s been plunged into another, with shortages holding back growth. Whilst firms have been stepping up through further investment and training, these steps take time and do little to ease pressure firms are facing now.
‘Firms are feeling the strain across the whole economy, and expect this to continue for two years.’ The CBI’s annual survey with recruitment firm Pertemps Network found that 24 per cent of businesses expect to increase pay above inflation, while 44 per cent would lift wages in line with cost of living rises.
Matthew Percival, the CBI’s director of skills and inclusion, said: ‘Pay intentions are rising as the economy recovers.
‘Pay rises need to be underpinned by productivity or risk being passed on to customers through higher prices.’
The CBI is calling on the Government to review the Shortage Occupation List, allowing businesses to temporarily recruit foreign workers, and develop policies to train workers for in-demand roles.
Separate figures from data firm Dealroom showed Britain’s tech sector has attracted £13.5billion from venture capital investors in the first half of 2021 – almost three times the total for the same time in 2020.
Preston, Edinburgh, Liverpool, Newcastle and Cardiff have seen the biggest growth in tech jobs, but even here there is a shortage as vacancies in the tech sector are 42 per cent higher than pre-pandemic.
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