The mystery of the UK’s missing workers

As the UK economy emerges from the effects of the pandemic, various sectors are reporting shortages of staff.

The lockdown easing has prompted employers to start recruiting. UK job vacancies have hit their highest level since the start of the pandemic.

Yet, puzzlingly, the latest employment figures show one-in-20 people who want a job can’t find one.

Hospitality, for example, is struggling to find staff, and there is a shortage of lorry drivers. Several other sectors face similar problems.

In the words of Kate Nicholls, chief executive of trade body UKHospitality, the sector has “the wrong workers in the wrong place at the wrong time”.

Students and apprentices, who often work part-time in hospitality, have had their studies disrupted by Covid and are not in their normal place of education. Other workers have moved away from big cities to save money during the pandemic.

But, as the director of the Institute for Employment Studies, Tony Wilson, points out, the hospitality sector has trouble holding on to staff at the best of times.

“This sector has a very high turnover,” he told the BBC. “Nearly half of people change jobs every year. A lot of firms have found people just move on to other things.”

Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), says there was a shortage of chefs even before the pandemic.

But during lockdown, she says, many people sought out other kinds of work and are reluctant to return to the “quite brutal” culture of long hours and night work.

“They’ve transferred to other sectors where they can work during the day, have proper breaks and more time with their family,” she says.

There are indications that the retail sector is also now feeling the pinch.

In the early days of the pandemic, supermarkets and other essential stores were able to recruit workers who had previously been employed by restaurants and pubs. Now there is more competition for those people’s labour.

Tamara Hill, employment policy adviser at the British Retail Consortium, says shortages would traditionally have been filled by non-UK workers.

“This shortfall has been impacted by barriers within the UK’s new immigration rules and a restricted apprenticeship levy that does not address the skills that are currently scarce,” she says.

Young people have been particularly badly hit. “The proportion of young people facing unemployment is higher than in other age groups, because they don’t have the experience and employers might be risk-averse,” says Ms Shoesmith, of the REC.

Mr Wilson, of the IES , says more young people in full-time education have stopped trying to hold down a job at the same time – 2.4 million, as opposed to 2.1 million a year ago.

However, he adds that many young people have managed to find more rewarding work during the pandemic: “One-third of young people now in high-skilled work were in medium or low-skilled jobs a year earlier.”

And younger workers are more wary of customer-facing roles than they used to be, says Mr Wilson. “They don’t want to put themselves at risk of catching Covid. They haven’t been vaccinated.”

According to the REC’s Ms Shoesmith, the haulage industry is suffering from a shortage of drivers. “There were high numbers of people from Romania and Bulgaria undertaking driving jobs,” she told the BBC.

They stayed in the UK after the Brexit referendum, but started leaving when the pandemic struck. “They have either sourced work in their home countries or they feel it’s not right to return to the UK, either because of Brexit or the pandemic.”

Ms Shoesmith says there is an estimated shortfall of 30,000 large goods vehicle drivers in the UK.

It does seem to be the case that many EU nationals who worked in the UK have returned home. According to Ms Nicholls, of UKHospitality, 1.3 million foreign workers left the UK during the pandemic.

“That’s taken out a large part of the economy, and that has a knock-on effect on the economy as a whole,” she says.

However, Mr Wilson, of the IES, argues this has more to do with Covid than Brexit.

“With these quarantine arrangements, many people who have rights to work here are not taking them up. If you’re in Spain or Poland, you’re not coming to the UK to take up jobs,” he says.

But he cautions that international job search websites such as Adzuna have seen a “massive collapse” in the number of foreign workers seeking jobs in the UK.

“There is an acute problem in some industries right now, but in the long term, it could become chronic because of Brexit,” he adds.

The government’s furlough scheme has helped millions of people stay in jobs. But there are unintended consequences says the REC’s Ms Shoesmith.

“With government support still in place until the end of September, the danger is that if people come off furlough and there is another lockdown, they can’t go back on to it. You have to start again,” she says.

As a result, some people who are being approached about job opportunities are reluctant to come off furlough to take them, she says.

Xiaowei Xu, senior research economist at the Institute for Fiscal Studies, reckons the impact might go deeper.

“If the pandemic does lead to a structural change in the economy, with less demand for the High Street and more for e-commerce, then furlough might be delaying that shift,” said Ms Xu.

Mr Wilson, of the IES, reckons that in future, businesses will need to pay more attention to how they recruit, train and treat staff.

“When firms say, ‘We can’t get the staff,’ they mean, ‘We can’t get the experienced staff,'” he says.

But with unemployment still at 1.7 million, there is a “big labour pool” of people who could take up those jobs, he adds.

That means accepting staff who are less experienced and training them, as well as offering more support to those with health conditions or caring responsibilities.

“It’s not necessarily about pay, it’s about offering better terms,” he adds. “Employers haven’t had to do that for a decade.”