A recent study found that almost half of businesses in the United Kingdom struggle to find the needed staff. This has a knock-on effect on the economy, with companies reporting increased costs, delayed projects, and a decline in quality. Here are five ways that labor shortages are affecting businesses in the U.K.
With more businesses competing for a smaller workforce, wages are increasing. The REC’s study found that the average salary for a permanent employee has risen by 2.9% over the last year. This wage rise is driven by businesses trying to attract and retain employees in a competitive market.
Labor shortages are also causing delays to business projects. This is because businesses take longer to fill vacant positions, and employees must take on additional tasks outside their typical job descriptions. The REC’s study found that 40% of businesses have seen projects delayed due to staff shortages.
Decline in Quality
The REC’s study also found that labor shortages are leading to a decline in the quality of products and services. This is because employees have to work longer hours and take on additional tasks, which leaves them little time to focus on quality control. As a result, businesses are seeing an increase in customer complaints and a decline in customer satisfaction levels.
Lower Economic Growth
The United Kingdom experienced a massive decrease in economic growth when the pandemic hit. The GDP of the country decreased by a staggering 9.8% in 2020. As businesses struggle to find staff, the economy risks slowing down even further. Companies cannot expand and invest in new projects when they can’t find the team to do the work.
A Weakening Pound
The U.K.’s labor shortage is also affecting the currency. As businesses struggle to find staff, the pound has weakened against the dollar and the euro. As a result, companies are less likely to invest in the U.K. when they cannot find the necessary workers. In addition, the weakened pound makes imported goods more expensive, which leads to inflation.
The labor shortage in the U.K. is having a significant impact on businesses across the country. From increased costs and delayed projects to a decline in quality, labor shortages are causing problems for businesses of all sizes. Here are some of the best ways companies can deal with the ongoing labor shortage.
Hire Overseas Workers
One way businesses can combat the labor shortage is by hiring workers from overseas. The U.K. has a points-based immigration system that makes it easy for companies to hire workers outside the European Union. Businesses can also sponsor skilled workers from other countries to come and work in the U.K. Here are some essential things you need to know when hiring overseas workers.
Businesses commonly need to post an immigration bond when hiring a worker outside the European Union. An immigration bond is a sum of money paid to the government to guarantee that the overseas worker will comply with their visa conditions. The cost of an immigration bond varies depending on the type of visa and the country of origin, but it’s usually between £3,000 and £5,000. If you want to learn more about immigration bonds, check online resources for immigration bonds. These resources often have detailed information about the cost, application process, and requirements for posting an immigration bond.
Pay a Recruitment Agency
If you don’t have the time or resources to find workers from overseas, you can use a recruitment agency. Recruitment agencies specialize in finding candidates for specific roles. They often have a network of contacts in different countries and can help you find the right worker for your business. However, recruitment agencies can be expensive, so compare various agencies before committing to one.
Type of Visa
Businesses can apply for a few different types of visas when hiring an overseas worker. The most common type of visa is the Tier 2 General Visa, which is for skilled workers who have been offered a job in the U.K. There are also Tier 2 Intra-Company Transfer visas for employees who are being transferred to the U.K. by their employer and Tier 5 Youth Mobility Scheme visas for young people who want to live and work in the U.K. for up to two years.
Invest in Technology
Another way businesses can deal with the labor shortage is by investing in technology. Automation can help companies to reduce their reliance on human employees. For example, some warehouses now use robots to pick up and pack orders. This frees employees to do other tasks, such as customer service or quality control.
Use Temporary Workers
Another solution for businesses struggling to find staff is to use temporary workers. This can be a good option if you only need a team for a short period or if you’re not sure how long you’ll need them for. Many agencies supply temporary workers so that you can find employees with the necessary skills and experience.
The labor shortage in the United Kingdom is having a significant impact on businesses across the country. From increased costs and delayed projects to a decline in quality, labor shortages are causing problems for businesses of all sizes. While there is no easy solution to the labor shortage, companies can take steps to mitigate its impact on their operations. Following the options above, your business can thrive despite the current labor shortage.