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An employer’s guide to overcoming the UK’s skilled labour shortage

Did you know? The UK’s shortage of skilled labour (workers) across industries such as transport, healthcare, hospitality and construction could slow down the UK’s economic recovery. The Guardian newspaper also backed up this finding, after mentioning that the number of available workers plunged in June 2021 at the fastest rate since 1997. So far, accountants, engineers, drivers, nurses, retail and hospitality workers were all among the professions where businesses said they had encountered skills shortages in 2021.

This significant finding, coupled with the fact that the UK is still in the midst of a COVID-19 pandemic, means employers are struggling to secure the right level of skilled labour to fill in their available vacancies. Given the situation, employers can find ways to improve their chances of finding skilled labour such as offering effective employee benefits plans and more.

To help employers, this guide by Pacific Prime UK will:

  • go over the definition of skilled labour;
  • reflect on the impacts of Brexit and the COVID-19 pandemic; and
  • explore how companies can overcome a skills shortage in the UK.

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What is skilled labour?

According to Indeed, one of the world’s top job sites, skilled labour refers to work that requires a certain level of training or skills. This type of work is exemplified in electricians, administrative assistants, doctors, plumbers, engineers, designers and more. Skilled workers are either blue-collar or white-collar workers, who need to have a set of specialised skills to perform their job duties effectively.

Do skilled workers need a degree or higher qualification?

Yes. Generally, skilled workers need to have a degree or vocational qualification in their related field where they can garner the skills and training needed to pursue their careers.

What are the 3 types of skills that all skilled workers should have?

Skilled workers should have the following set of skills:

1. Foundation skills

Foundation skills are the building blocks that serve as the basis and support for additional training, operations and more. They are a combination of language, literacy and numeracy (LLN) skills and employability skills. So oral communication, numeracy, learning, reading and writing would fall under LLN. On the other hand, being able to navigate the world of work, forming interactions with others, and getting work done would fall under employability skills.

2. Transferable skills

Transferable skills represent a core set of skills that can be applied no matter where the workers are and can be applied to a wide range of different jobs and industries. They would usually pick these up from past or current experiences such as volunteering for a charity, taking on a career development course, committing to their hobbies like debate clubs, or when networking with other professionals in their field of expertise.

3. Technical skills

Technical skills are less generic and more specific to completing certain tasks requiring physical or digital tools. They are also known as hard skills that can vary across industries and jobs. Some specific examples include:

  • Project management
  • Technical writing
  • Data analysis
  • Software proficiency
  • Programming languages
  • Common operating systems

Further reading: How to develop and train soft skills in the workplace

Why are skilled workers important for the UK economy?

Skilled workers are incredibly important to the UK economy for several reasons including determining the strength, potential and quality of the workforce. However, they are also a key indicator and driver of labour productivity (output per worker or per hour worked).

It goes without saying that for the UK to remain an economic symbol and beacon for attracting foreign investments, it needs to demonstrate that the national workforce is well-skilled and effective in their respective industries.

The key factors affecting the availability of skilled workers in the UK

When it comes to employment in the UK, many factors affect the availability of skilled workers. But two factors have stood out in 2021: Brexit and the COVID-19 pandemic.

Brexit’s impact on the UK’s employment landscape

As the economy restarts after months of lockdowns and restrictions, news of skilled worker shortages have emerged in some industries. While many point to the COVID-19 pandemic as the culprit for shortages (which we’ll also mention below), the impact of the UK leaving the European Union (EU) could be to blame too, as the next section explores.

Further reading: Brexit’s impact on employment – 3 trends all UK businesses need to know

EU workers departing the UK post-Brexit

An exodus of EU workers as a result of Brexit has left key industries in the UK with severe staff shortages. EU workers have expressed their dismay at the UK’s vote to leave the EU and impose new post-Brexit immigration rules that leave many having less desire to continue living and working in the UK. One particular industry that has been hardest hit is the construction industry.

The number of skilled workers in the construction industry has dropped significantly across the UK

Referring to an article by Construction News in 2018, the London construction market saw the number of EU-born workers drop from 115,000 to 53,000 – a fall of 54%. Fast forward to the first quarter (Q1) of 2021, and the number of EU-born workers in the UK construction industry had dropped by more than a quarter in 12 months.

New UK points-based immigration system

The abolition of free movement due to Brexit means EU workers wishing to return to the UK must now apply for a visa, which is based on a points system. To qualify for a visa, migrant workers who want to move to the UK will have to qualify for 70 points.

Although such a system aims to attract the “brightest and best from the EU and around the world”, it could have the opposite effect and deter skilled workers due to initial application costs as well as education and health requirements.

Furthermore, the ongoing COVID-19 pandemic is seen as a major factor for deterring skilled workers from EU and non-EU countries from travelling.

Further reading: Your guide to the immigration health surcharge (IHS)

COVID-19 pandemic disrupts the available pool of skilled workers

No one ever anticipated that the COVID-19 pandemic would devastate the UK’s economy in 2020. In the last 18 months or so, the UK applied stringent lockdown measures, imposed travel restrictions, and closed schools to contain the spread of COVID-19.

In turn, many if not all key sectors and industries were affected by severe declines in economic output including retail trade, accommodation, food services, travel and manufacturing to mention a few. This affected workforces across the UK with many made redundant or even put onto the furlough scheme.

Further reading: What are your health insurance options if you’ve been furloughed or made redundant?

Skills shortage in 2021: Hospitality and IT technology

In May 2021, employers from the hospitality and IT technology sectors began learning of the huge shortages of workers as the government began easing COVID-19 restrictions. A monthly survey, based on responses from 400 recruitment and employment agencies, reported that hiring activity intensified across all job categories, particularly in IT and computing, and hotels and catering.

As of the time of writing, hospitality venues across the UK are struggling to fill in thousands of job vacancies, while over 70% of employers are experiencing skills shortages in the IT and technology industry.

The imminent effect due to skill shortages in these sectors will be a slower recovery post-COVID-19 and lower productivity from a labour perspective. Considering that skill shortages will take time to improve, businesses will have to look above and beyond the situation, and overcome the skills shortage by radically changing their existing practices and looking within the business for prospects.

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How can companies overcome a skills shortage?

Below are five ways that you can achieve better workforce management and productivity for the business when there’s a shortage of skilled workers in your industry:

1. Train and develop existing employees

More and more employers are now looking within and offering training to their existing employees. Not only does this help develop employees so that they can fulfil vacant roles and responsibilities, but it could also help them with their career progression. Employers can provide additional resources to help their learning and development and show employees they feel valued and supported.

Additionally, offering existing employees the opportunity to grow in the business could be an incentive to keep them long-term in the company. According to totaljobs, an online job site, two in three UK workers left a job due to a lack of learning and development opportunities. All in all, training and development will help aid retention, which is of increasing importance in a post-COVID-19 candidate-led market.

2. Resort to adaptability and change your approaches

As an employer, it’s imperative to be able to see the potential that each employee has and have them perform work in a way that can elevate the business. In other words, getting the right people doing the right jobs. Therefore, it’s important to keep an open mind when noticing the skills in your employees that can be transferable.

Managers or team leaders should consider employees that might be able to apply certain skills differently. For instance, an employee with a strong sales background could easily apply their abilities to a marketing role. While someone with great communication skills and thought leadership in the marketing team can develop their career and become an operations manager. The underlying message here is to look for the talent within and have them do jobs that suit their abilities. They could enjoy it better too. A win-win for you and the employee.

3. Review your recruitment practices

When it comes to recruitment, every employer will know that finding the right candidate is like finding a needle in a haystack. It can take weeks and months to find the right candidate but that doesn’t guarantee that they will stay – especially when competition for candidates is rife and candidates have choices now.

Instead, it might be time to re-evaluate how you recruit new staff. So rather than ticking the boxes for skills that candidates have, perhaps getting to know their personality and looking for potential is the better approach. The truth is, employers who build a connection with employees and garner trust and understanding will find that employees are willing to learn and grow to fulfil the needs of the business. So the next time you have a candidate come in for an interview, assess their personality and attitude rather than skills and you could find yourself hiring the future CEO of the company.

4. Form partnerships with local educational institutions

Employers are encouraged to form connections with educational institutions to foster the future workforce and help educational institutions target their syllabus to help individuals develop key skills and a better understanding of the world of work.

Collaborating with a local educational institution and offering apprenticeships, co-op work placements and internships can also improve public relations and reputation too. Young adults will also appreciate the opportunity to put theory into practice and acquire work experience that will help develop their abilities to work with others and understand true accountability when working for an employer.

This approach is also vital for the future of the UK economy as a reliance on overseas talent in a world that is dynamic and challenging could be a risk, which employers in the future may not want to take.

Further reading: 6 ways to improve your intern program

5. Go temporary and use contingent workers

With a shortage of skilled workers in your industry, one of the quickest ways to fill in roles is by hiring contingent workers. Around the world, there are freelancers, consultants, contractors and more that are capable of working remotely and delivering work like any employee in the workforce. More so their availability, experience, expertise and flexibility could be beneficial to you if you have short timeframes, varying budgets and ad-hoc projects.

Adopting an effective employee health and benefits plan

At Pacific Prime UK, we firmly believe that offering employee benefits in the UK to your employees is important because it shows them you are invested in not only their health and wellbeing but also their future. More so, an effective employee benefits plan can help attract and retain talent, which during this period of shortages of skilled workers is incredibly important for the survival of any business.

Additionally, employee benefits can help improve your business’s bottom line by getting employees to participate in health and wellbeing programs. Healthier employees will translate into savings through reduced healthcare costs for your business. Group health insurance plans are probably the most attractive option to include in your employee benefits offerings and they can help attract future talent and make you stand out from the competition.

Employee benefits plans in the UK can also have added telemedicine options for employees to utilise. Employees with better access to medical support and have fewer health risks will likely take fewer sick days, fewer visits to the general practitioner (GP), and spend more time working productively and yielding results for the business.

Further reading:

Get in touch with our trusted, industry experts at Pacific Prime UK who are specialists in the employee benefits domain. With over 20 years of experience and close working relationships with many of the world’s leading insurers, our experts are bound to match options and design effective employee benefits plans that meet your employees’ needs and improve your bottom line.

Contact us today!

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Content Creator at Pacific Prime UK
Jimmy is a content writer who helps simplify insurance for readers interested in international private medical insurance. He is on a mission in the UK to support locals, expatriates, and businesses by bring the latest news and updates to his Pacific Prime blog articles.

His expert view and wealth of knowledge on insurance can also be found in his blogs for the UK, China, Dubai, Thailand, Hong Kong, and Singapore.