Dealing with post-Brexit staff shortages

Almost half of UK busi­ness­es are expe­ri­enc­ing staff short­ages, accord­ing to new research. For many exec­u­tives, the prob­lems stem from Brex­it. 

Accord­ing to a recent sur­vey by the Insti­tute of Direc­tors, 44% of UK busi­ness­es are encoun­ter­ing such prob­lems. Four in 10 attribute the short­ages to a lack of a tal­ent pipeline from the EU fol­low­ing the UK’s exit from the union. 

Since 1 Jan­u­ary 2021, employ­ers that want to hire some­one from out­side the UK to work for their organ­i­sa­tion must acquire a spon­sor licence, which can cost from £364 to £1,820 for a small com­pa­ny or char­i­ta­ble organ­i­sa­tion and £1,000 to £5,000 for a medi­um- to large-sized busi­ness, depend­ing on an employee’s length of stay. 

Fees for spon­sor­ship licence appli­ca­tions and cer­tifi­cates of spon­sor­ship issuance also apply, as does a min­i­mum salary of £25,600 per year or £10.10 per hour, whichev­er is high­er. An employ­ee must speak Eng­lish and fill an eli­gi­ble occu­pa­tion. Min­i­mum salaries and skills demands may be low­er for “short­age occu­pa­tions” or if an appli­cant has a PhD. 

Closing doors

Stonegate Pub Com­pa­ny is the UK’s largest pub own­er, with 4,600 venues in its port­fo­lio, of which it man­ages 820. The new cri­te­ria – which pre­clude pub and bar staff – is “ridicu­lous­ly pre­scrip­tive”, says Tim Painter, the company’s HR direc­tor. 

 “I’ve looked at this in detail with my team and unfor­tu­nate­ly I’ve come to the con­clu­sion that it’s just not going to be an avenue for us,” he says. “It’s frus­trat­ing eco­nom­i­cal­ly for us. I think it’s eco­nom­i­cal­ly bad and social­ly bad for the coun­try. It’s a huge shame that we’ve effec­tive­ly closed our doors to so many peo­ple who can come and con­tribute eco­nom­i­cal­ly and cul­tur­al­ly.”

Stonegate employs around 15,000 peo­ple. Before Brex­it, 10% were from the EU and the remain­der were UK nation­als, although there were region­al dif­fer­ences across the coun­try, par­tic­u­lar­ly in Lon­don, where EU nation­als rep­re­sent­ed 35% of the work­force. The group cur­rent­ly has 1,000 vacan­cies. 

“We can’t run away from the fact that we’ve got a dis­con­nect where­by the gov­ern­ment is say­ing that’s it all about retrain­ing peo­ple and the real­i­ty is that at this point in time, with the path­way to the Euro­pean Union closed, there are not the peo­ple to train,” adds Painter.

Andy Dod­well, chair­man of Cor­betts The Gal­va­niz­ers, one of the UK’s old­est gal­va­niz­ing busi­ness­es, says the gov­ern­ment has to lis­ten. “The employ­ment pool in the UK will not sat­is­fy the major­i­ty of man­u­al labour-dri­ven busi­ness­es.” 

Cor­betts has increased its pro­por­tion of UK work­ers from 3% to 45% over the past year. “We’ve fol­lowed the guide­lines of the gov­ern­ment; we’ve done every­thing we can, but it’s not enough,” Dod­well says. 

Cor­betts cur­rent­ly employs 105 work­ers and has around 20 vacan­cies. Fill­ing these jobs will mere­ly help the busi­ness to ful­fill its exist­ing con­tracts, not meet its growth expec­ta­tions and increased demand from cus­tomers, Dod­well says. “The gov­ern­ment wants us to grow and wants us to use UK labour, clear­ly, but the real­i­ty is very much dif­fer­ent,” he adds. 

In response, Cor­betts is pro­vid­ing trans­port to help employ­ees get to work and cre­at­ing ini­tia­tives – such as sea­son­al work and flex­i­ble work pat­terns – to attract work­ers from mar­kets it hasn’t pre­vi­ous­ly con­sid­ered, such as stu­dents and work­ing moth­ers. Sim­i­lar­ly, Stonegate has put in place refer­ral pro­grammes that incen­tivise exist­ing employ­ees to rec­om­mend the busi­ness to friends and fam­i­ly, along with recruit­ment cam­paigns in its bars and pubs and social media cam­paigns pro­mot­ing devel­op­ment oppor­tu­ni­ties on offer through­out the group. 

Rob Hol­ly­man, a direc­tor at Youngs Trans­porta­tion and Logis­tics, has instead focused on increased pay deals and hopes that a start­ing annu­al salary of £40,000 will help to attract appli­cants to fill its 30 HGV dri­ver vacan­cies. “It’s killing us. But what’s killing us more is trucks parked up. These trucks are £100,000 each, so if you’ve got six of them parked up because you haven’t got enough dri­vers, it’s a cri­sis.” 

Youngs, which has three depots based in Pur­fleet, Southamp­ton and War­ring­ton respec­tive­ly, employs 200 staff. Around 15 are non-UK work­ers, down from 20 pri­or to Brex­it. 

Long-term solutions

Some employ­ers are hope­ful that the end of the government’s fur­lough scheme on 30 Sep­tem­ber 2021 will increase the num­ber of peo­ple in search of work. Research by the British Cham­bers of Com­merce reveals that near­ly one in five com­pa­nies are con­sid­er­ing staff redun­dan­cies post-fur­lough. 

But Painter isn’t opti­mistic. “I don’t antic­i­pate a return to the work­force for mil­lions of peo­ple,” he says. While his com­pa­ny pri­ori­tis­es train­ing to help devel­op work­ers, “even if you’re train­ing peo­ple to progress through the busi­ness, at some point you’ve still got to pull in the peo­ple who are going to work at the bar lev­el”. 

Some areas of the econ­o­my sim­ply don’t have the peo­ple to train, he adds. 

“So the gov­ern­ment can keep say­ing, ‘retrain peo­ple’, or ‘train peo­ple’, but you have to have peo­ple to train. And that is a sys­temic issue. I don’t think that the end of fur­lough is going to alle­vi­ate that sys­temic issue.” 

Neil Car­ber­ry, chief exec­u­tive offi­cer at the Recruit­ment and Employ­ment Con­fed­er­a­tion, thinks the solu­tion lies in a new employ­ee propo­si­tion from UK employ­ers. 

 “In the long term there are answers here. We need to think about the way we sell jobs to British work­ers, we need to think about the terms and con­di­tions of those jobs and we need to think about the train­ing path­ways.”

Employ­ers must be mind­ful that the domes­tic labour force is like­ly to get small­er, says Car­ber­ry, not just because of Brex­it and life-chang­ing deci­sions dur­ing the coro­n­avirus pan­dem­ic, but because baby boomers are retir­ing and being replaced by a small­er gen­er­a­tion. This, Car­ber­ry says, is like­ly to result in a can­di­date-dri­ven recruit­ment mar­ket.