81 percent of manufacturers have told the British Chambers of Commerce that they can’t find the employees they need, making this their biggest staff shortage in 30 years.
What it means: Unemployment in the UK is currently lower than it has been at any time since 1975. The number of EU citizens working in Britain has also been falling since the Brexit vote in 2016. The upshot is that there’s less people in Britain looking for jobs. That’s not good for companies who have lots of jobs that need filling. And although manufacturers are the worst hit, they aren’t the only one struggling: 71 percent of service firms (things like restaurants, bars and banks) say they’re also desperate for staff.
There is an easy way to ensure you have lots of job applicants: offer high salaries (or at least higher salaries than your competitors). But lots of applicants isn’t useful unless most of them have the right skills to do the job. And according to interviews with businessfolks conducted by the British Chambers of Commerce, Brits are woefully underqualified.
Skills-training would solve this problem, but it takes a long time and really needs the help of the UK government, who can do things like put relevant training in the school curriculum. Company bosses could look abroad for skilled workers, but are likely to run into problems post-Brexit day (i.e. March 29th 2019), after which the UK government plans to severely curb migration, especially for any foreign worker earning less than £30,000 a year. (That’s higher than the average British wage).
So in the short term, manufacturing and service firms may just potter on without a full staff (and therefore potentially produce less stuff, including profit). Some may find that solution unsustainable and either close down, move the company abroad, or perhaps invest in more non-human workers like robots.
Read our explainers on employment and wages.
