The true impact of the volatile job market on the supply chain

In May 2020, around 7.6 million jobs (24% of the UK workforce) were at risk due to COVID-19-related lockdowns. Plunging Britain into its deepest recession on record, the worst-hit sector for job cuts was (unsurprisingly) the retail sector, closely followed by the aviation industry, the hospitality industry, the manufacturing industry, and the energy industry.

Thankfully, the most recent data shows the UK's labour market is continuing to recover, with the number of payroll employees showing another monthly increase; up 207,000 to a record 29.2 million in September 2021, with unemployment rates decreasing by 0.4% to 4.5%. Encouragingly returning to pre-covid pandemic levels (Feb 2020), the unprecedented global supply chain crisis continues to rage on, pushing prices higher and putting economic recoveries across the world in real jeopardy.

So, what is the true impact of the UK’s volatile job market on the supply chain and what does the future hold? PPR Recruitment investigates.

What is causing the supply chain issues UK?

According to the latest UK Parliament research briefing:

“Broadly, the UK’s current supply chain issues stem from global shortages of materials, staff shortages and transport delays occurring at the same time as sharp spikes in demand, particularly for consumer goods and construction materials.

Supply chain disruptions have been exacerbated in the last few months as major shipping ports and manufacturing facilities in Asia have been affected by outbreaks of the Delta coronavirus variant, either closing or reducing capacity. The disruption to global supply chains has led to longer supplier delivery times for some businesses, particularly in the manufacturing and construction sectors.

As the labour market recovers from the pandemic, several sectors are seeing temporary and persistent staff shortages. On a temporary level, some businesses are affected by staff having to isolate due to COVID-19 infection. Some sectors are having persistent labour supply issues and difficulty filling vacancies. A shortage of Heavy Goods Vehicle drivers is an acute issue significantly affecting goods shortages.

While the UK is not unique in experiencing shortages of materials and workers, commentators have noted that new immigration rules post-Brexit may have exacerbated the situation. There are different views on the extent to which Brexit-related factors are contributing to supply chain issues in the UK.”

What jobs have a shortage of workers UK?

With fears quashed about increases in redundancies caused by the end of the furlough support scheme, the UK is now in the midst of a vacancy crisis. According to The Recruitment and Employment Confederation (REC) and industry data, the top 10 occupations experiencing the highest worker shortages in the UK are:

1. HGV drivers
2. Nurses
3. Programmers and software development professionals
4. Care workers and home carers
5. Primary and nursery education teaching professionals
6. Chefs
7. Sales and retail assistants
8. Cleaners & domestics
9. Metalworking production and maintenance fitters
10. Carpenters and joiners

What are the fastest growing employment sectors in the UK?

Staff shortages inevitably mean businesses are unable to meet increased demand for their services. So, which industries have come out relatively unscathed? According to employment-oriented social media platform LinkedIn, these are the top 10 fastest-growing job sectors in the UK of 2021:

1. E-commerce personnel
2. Health care supporting staff
3. Digital content freelancers
4. Construction
5. Creative freelancers
6. Finance
7. Specialized medical professionals
8. Professional coaching
9. Social media and digital marketing
10. Customer service

How have reductions in specific job markets impacted the UK supply chain?

COVID-19 disruptions, Brexit and a boom in demand are all influencing the supply chain crisis, but how does the skills shortage factor in? Well, according to the ONS, the UK lost over 200,000 skilled EU citizens in 2020. Coupled with over 75 million ‘Baby Boomers’ about to retire, there are simply not enough ‘Generation X’ workers to fill their place, while ‘Millennials’ and ‘Generation Z’ lack the essential skills and work experience to fill the widening recruitment gap.

So, with almost two-thirds of UK firms deeply worried about a shortage of skilled applicants, and the shortfall costing organisations a staggering £6.33 billion extra a year in recruitment fees, inflated salaries, temporary staff and training for workers hired at a lower level than intended, the skills shortage is another significant aspect that cannot be ignored either.

Which skills are in demand in UK?

Struggling with the worst labour shortage since 1997, the biggest skills shortages are being felt in these crucial UK job sectors:

• Construction (over 20% of UK tradespeople are over 50 and 15% are over 60)
• Manufacturing & Engineering (186,000 engineers are needed annually until 2024 just to plug the skills gap, with almost 20% of the current workforce expected to retire by 2026)
• Programming (70% of the tech industry are experiencing skills shortages)

With this in mind, forward-thinking workers and those looking for a new start would do well to look into these sectors to see how their existing skills can transfer, along with any future training required.

What can be done to overcome the shortage of workers in the UK?

Although the pandemic and Brexit play their part, the single biggest cause of supply chain disruption is staff shortage. It's no coincidence that the longest supply chain delays are mostly taking place in job sectors experiencing the largest number of hard-to-fill vacancies. So, with the supply chain crisis predicted to continue into 2023 and beyond, what can be done to solve the skill shortage, improve productivity, and prevent the UK's economic recovery from slowing down even further?... Here are ten crucial points for employers, employees, and the government to consider:

• A concerted focus on training, reskilling and recruitment
• More apprenticeships and work-based learning initiatives
• Invest more time and resources into upskilling existing workers
• Rethink your workforce e.g., flexible working opportunities
• Make jobs more attractive to future generations by creating sectors young people are excited to work in
• Change perceptions of the industry by encouraging diversity in the workplace
• Challenge gender inequality
• Focus on sustainability
• Invest in new technologies, such as AI and robotics
• Broaden recruitment potential

Find your next role or candidate with PPR Recruitment

Whether you're looking for a new job or require skilled, experienced, and reliable operatives and engineers, we can help. Give our recruitment experts a call on 01895 80 81 88 or contact us online for further support.

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