Because of the difficulty in finding qualified workers, one third of employers are considering pay increases that are equal to or higher than the rate of inflation.
According to a survey that was carried out by the Confederation of British Industry (CBI) and the staffing agency Pertemps, three quarters of businesses have been negatively impacted by labour shortages over the course of the previous year, and nearly half of those businesses have reported that they are unable to meet the demand from customers as a direct result of the shortage.
The inability of many companies to fill open positions is “substantially affecting” their ability to do business and their plans for future expansion.
36 percent of firms that were impacted by labour shortages had made modifications to, or decreased the number of, the products or services they offer, while 26 percent lowered the amount of planned capital expenditure as a result.
While over half of organisations have moved forward pay evaluations or had many pay raises over the course of the previous year, more than a third of companies have issued one-time incentives in place of pay raises.
According to Matthew Percival, a director at the CBI, businesses that spend a significant amount of money on their employees have less money available to spend on other aspects of their operations.
He made the following statement: “Enterprises are pulling every lever they can to attract and keep personnel, but this is making it difficult for businesses to make investments that enhance productivity, such as training and automation.”
“In order to strive for growth and construct an economy that pays greater wages, we will need to reduce shortages in order to create the conditions for increased investment. That involves assisting more British employees in overcoming obstacles to entering the workforce, such as a shortage of cheap child care, and having a realistic approach to immigration policies.
According to Percival, “immediately revising the Shortage Occupations List should be the starting step.” [Citation needed]
Fourty-four percent of people who took the survey expressed support for the idea of granting temporary visas for jobs with critical labour shortages.
According to almost three quarters of those surveyed, a lack of available labour makes the United Kingdom a less desirable location in which to conduct business. This poses a challenge for the government’s plan to achieve growth of 2.5 percent, which would put the economy back to where it was before the financial crisis of 2008.
According to the poll, the majority of firms feel that the impact will still be seen in five years, with seventy percent of those asked stating that access to labour will still be a threat to their competitiveness.
To improve their efficiency, over half of the businesses questioned want the government to create financial incentives that would assist them in making investments in technology and automation.