Staff shortages ‘could last up to two years’ and furlough end won’t ‘magically fill gaps’

Staffing shortages seen across the UK could last for up to two years and will not be solved by the ending of the furlough scheme this month, the director-general of the Confederation of British Industry (CBI) has warned.

Shortages across the UK have seen venues forced to close or reduce trading hours, while a widely reported lack of HGV drivers has resulted in shortages of some ingredients and products and could even affect allergen compliance. The Job Retention Scheme will come to an end on 30 September.

The CBI is calling for the government to align skills policies to roles with the highest unfilled vacancies, provide greater flexibility for the apprenticeship levy and use skills-focused immigration policies such as the Shortage Occupation List to alleviate short-term pressures.

Director-general Tony Danker said that “standing firm and waiting for shortages to solve themselves is not the way to run an economy”. He added that both short-term economic needs and long-term economic reform were needed, and that furlough ending was “not the panacea some people think will magically fill labour supply gaps”.

He also urged businesses to play their part on long-term productivity reforms by continuing to invest in training, automation and digital transformation, while doing more to attract and retain staff from a diverse talent pool.

Danker said: “In the UK, many overseas workers left during the pandemic affecting sectors including hospitality, logistics and food processing. And new immigration rules make replacing those who left more complex.

“Building a more innovative economy – coupled with better training and education – can sustainably improve business performance, wages and living standards. But transformation on this scale requires planning and takes time. The government’s ambition that the UK economy should become more high-skilled and productive is right. But implying that this can be achieved overnight is simply wrong. And a refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.

“The CBI has heard from companies actively cutting capacity because they can’t meet demand, like the hoteliers limiting the number of bookable rooms because they don’t have enough housekeeping staff and can’t get linen laundered. Meanwhile some restaurant owners have had to choose between lunchtime and evening services when trying to make the most of summer.”

He added: “The government promised an immigration system that would focus on the skills we need rather than unrestrained access to overseas labour. Yet here we have obvious and short-term skilled need but a system that can’t seem to respond.”

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