Labour shortages as EU nationals express uncertainty about the future

UK employers facing problems to fill job vacancies as EU nationals’ insecurity rises.

The UK is facing a shortage of labour supply, with 70% of employers with vacancies saying some are proving hard to fill – a rise of 4% since the summer and Brexit taking a lot of the blame, according to the latest Labour Market Outlook report.

The report from the Chartered Institute of Personnel and Development and the Adecco Group finds that both recruitment and retention are proving a challenge within a tight labour market, with 44% of employers surveyed saying it has become more difficult to fill vacancies and 34% finding difficulty in retaining staff over the past 12 months. Around half of all those facing recruitment or retention pressures have increased salaries as a response.

Of the large proportion of employers who currently employ EU nationals, around half (48%) report an increase in their EU workforce expressing insecurity about their jobs as a result of Brexit. This insecurity was also shared by UK citizens at more than a quarter (26%) of organisations. Only 28% of employers say publication of the EU Settlement Scheme has helped their confidence in retaining EU nationals over the next two years.

Some 90% of employers say the current migration proposals will not, or only to some degree, meet their needs for low or medium-skilled labour.

While nearly half of employers (49%) say a pay increase in on the cards, almost as many (41%) say it is too hard to tell or that they don’t know. However, the proportion of employers predicting a pay increase has risen since the last quarter.

In response to recruitment challenges, around half of organisations have raised starting salaries (48%). Among those who are also experiencing difficulties retaining staff, a similar proportion (51%) have increased salaries in some capacity.

Despite these factors, the report says there is no change to median pay rise expectations which remain at 2%. There was, however, an increase in pay in the public sector from 1.5% to 2% – the highest expected pay settlement for the sector since tracking began in Spring 2012.

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