Skilled labour shortage fuelled by uncertainty for EU workers

Survey by Lloyds finds more than half of British companies are struggling to recruit the staff they need – up from almost a third in January.

British businesses face their biggest challenge in recruiting skilled labour in a decade, as high employment combines with a fall in the value of the pound and uncertainty about the future for EU nationals in the UK.

A net balance of 52% of 1,500 UK companies questioned in May said they had experienced difficulty in recruiting skilled labour during the past six months, compared with 31% in January.

The balance of companies facing challenges in recruiting unskilled labour also rose to 26% from 14%, according to the predominantly small and medium-sized businesses surveyed for Lloyds bank’s regular Business in Britain report.

Lloyds’ findings come after the National Farmers’ Union warned that the number of seasonal workers coming to the UK this year had dropped by 17%, because the lack of clarity on the future for EU workers in post-Brexit Britain and a drop in the value of sterling had hit recruitment.

British strawberry producers have meanwhile warned that the price of fruit could rise by more than a third if the UK did not ensure access to European workers via a permit scheme or other means.

The Recruitment & Employment Confederation has also warned about rising difficulties in recruitment, particularly of nurses, industrial workers, drivers and IT specialists, and has called on the government to ensure businesses have access to those with the right qualifications.

Lloyds said 8% of businesses expected to add more staff in the next six months. Although that was an improvement on the bank’s previous survey in January, Lloyds said it indicated that companies remained cautious about hiring.

That caution was in spite of a rise in confidence to an 18-month high before the election result in June, which resulted in a hung parliament.

Tim Hinton, managing director of mid markets and SME banking at Lloyds, said: “Our latest survey, which was conducted during the election campaign, shows an increase in business confidence since our last report at the start of the year.

“Although challenges remain in recruiting both skilled and unskilled labour, businesses are anticipating higher sales, increased profits and staffing levels to rise, which is all very positive for the economy.

“With details of the terms of Britain’s exit from the EU still to come, inflation on the rise and general volatility and uncertainty in the economy, the outlook remains mixed at best. However businesses have been operating in this environment for some time now and they are taking it in their stride.”

As companies struggle to recruit staff, there are hopes that it could lead to better protection for the growing band of workers in the gig economy. On Monday, the TUC will launch a campaign for better jobs and pay for insecure workers.

Theresa May, the UK prime minister, last year appointed Matthew Taylor – the former head of Tony Blair’s policy unit – to head a review into modern employment and he is due to report in the next few weeks.