In order to create a system which is less reliant on migrant workers in the long-term, the CIPD argue there must be short-term changes to immigration policy to tackle immediate problems.

According to a new report by the Chartered Institute of Personnel and Development (CIPD), immigration policy and longer-term reforms to skills policy must occur in order to ease immediate staff and skills shortages.

The research finds that the majority of labour and skills shortages currently facing the UK pre-date the pandemic and are therefore unlikely to be resolved by the gradual return to pre-pandemic norms.

At present, four in ten (39 per cent) employers have hard-to-fill vacancies which is a marginal rise compared to 2019 figures (36 per cent), indicating this problem continues to persist.

However, this issue has been particularly difficult for specific industries including hospitality, arts and recreation (51 per cent, up from 12 per cent in 2020), health and social care (49 per cent) and manufacturing (47 per cent).

In addition, low-paid sectors also harboured unique problems which made it difficult to attract and retain talent, including:

  • A supply shock in key sectors including hospitality and transport and storage which have traditionally been particularly reliant on EU workers.
  • The unattractiveness of key industries – with expectations of UK job seekers failing to align with the wages and working conditions offered in these industries.
  • Employers being left without adequate resources to address recruitment difficulties.
  • Lack of investment in technology – with under one in 10 businesses (9 per cent) utilising this to fill existing shortages, either in labour or skills.

As such, the CIPD have proposed a variety of key measures to tackle these problems.

One proposal includes the Government introducing a temporary job mobility scheme for young EU nationals.

This, the body argues, would help to offset the fall in EU nationals reported as a cause of recruitment difficulties in the most affected sectors.

Much like the demands of the REC, the CIPD also believe the Apprenticeship Levy should be reformed to make it more flexible.

This would allow employers to invest in a wider range of skills training and boost their engagement with further education colleges which include meeting the cost of much needed HGV driver training.

The wages could also be increased to tackle any misconceptions towards apprenticeships and make this a more attractive route for young, unemployed jobseekers.

Finally, the body suggests the Government should invest £60m a year to provide a business improvement consultancy service through the Growth Hub network.

This would provide SMEs with up to two-days of free business consultancy support on vital issues such as people management capability, workforce skills development and technology adoption to boost productivity and create better paid and quality jobs.

Gerwyn Davies, senior labour market adviser at the CIPD, stated:

Our research suggests that too often, employers in low-paying sectors see the workforce as a cost to manage down rather than a key value driver to invest in. There’s promising evidence that some employers are getting better at sourcing labour and improving job quality in response to labour shortages.

However, changes in business behaviour, people management capability and investment priorities will take time, time that firms who are struggling with acute skill and labour shortages now simply don’t have.

In response, there is a strong case for an immediate immigration safety valve to address the rising labour supply challenges some employers are facing.

Equally, we hope that the upcoming Chancellor’s spending review recognises the need for improvement in the quality and availability of business support, to pave the way for greater investment in skills, people management capability and technology over the longer term.


*This research has been detailed in the CIPD’s new report “Addressing skills and labour shortages post-Brexit“, published in October 2021.