Action Needed as UK Skills and Labour Shortages Bite

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Labour Shortages

There is a skills shortage in the UK. A survey carried out by the Office for National Statistics (ONS) in November 2022 found that 13.3% of businesses were short of workers.

Government data also shows that the number of job vacancies across the UK is also high based on there being 1.19 million open positions between September and November 2022.

Finally, according to a 2022 study by the Federation of Small Businesses, 78% of businesses had difficulties recruiting staff… Of those employers struggling to recruit, 82% cited a lack of relevant qualifications, skills and experience among applicants.

The government is working to address the skills and labour shortage. In Autumn 2022, Prime Minister Rishi Sunak instructed the Department of Work and Pensions to “thoroughly review issues holding back workforce participation”. Prior to this, changes had been made to the visa application process for employers and, in turn, prospective employees.

The Tier 2 system was replaced by the Skill Worker Visa in 2020. The new system changed a variety of requirements, including certain thresholds.

Visa Changes Help Ease Labour Market Struggles

Labour Shortages

The minimum salary an applicant must be guaranteed has been lowered from £30,000 to £25,600. The roles applicants can apply for can now be A-level standard, rather than degree-level. Other conditions have also been changed, including a lifting on the number of skilled worker visas that can be granted each month.

This has helped cause an uptick in successful work visa applications, with the number increasing by 25% between 2019 and 2021. However, despite the uptick in work visas, there remains a skills shortage in the UK.  

In the government’s summary posted in January 2023, the sectors most affected by the skills shortage are healthcare, transport, administration, arts, accommodation and food services.

Another sector that’s struggling to recruit skilled workers is construction. According to ONS data, 20.7% of construction businesses are suffering worker shortages. The Department of Work and Pensions review will aim to tackle these shortages, as well as those in other sectors.

A change to the points-based immigration system for skilled workers was one course of action taken by the government in 2022. This was originally intended for healthcare workers, but new measures may soon be necessary for other sectors, including construction.

Any such changes could help ease the skills shortage, but some employers can’t wait. In these situations, employers have two options: recruit and train local workers or hire skilled workers from abroad.

Businesses Need a Blended Approach to Address the Skills Gap

Labour Shortages

Both are viable options and, in reality, a blended approach is probably best. However, in industries such as construction where time is of the essence, hiring skilled workers from abroad might be necessary. It can take two years to train a bricklayer, for example.

With the help of an immigration lawyer who understands how to use the sponsor licence system, it’s possible to bring skilled workers to the UK in a matter of weeks. The rub, of course, is that you need to know how the system works and, indeed, if it’s suitable for your business.

The government has made it easier for skilled workers to get a visa, but the process is by no means straightforward. What’s more, with an individual application costing upwards of £1,400, both the employer and employee need to make sure it’s the best route.

The reality is that there are no quick fixes. The skills gap is at the point where it can’t be closed quickly. The good news, however, is that there are options.

Bringing over skilled workers is easier than it was and there are plenty of resources out there for employers who want to use the immigration system.

The government is also looking to start more training initiatives and offer incentives across various sectors. These things take time, but there are certainly positives on the horizon.