As a result of a lack of workers, one-third of businesses plan to raise pay by as much as or more than the rate of inflation.
According to a survey done by the Confederation of British Industry (CBI) and the staffing agency Pertemps, three-quarters of businesses have been affected by a lack of workers in the past year, and nearly half of those businesses say they can’t meet customer demand because of this.
The lack of workers is “having a real effect” on the way many businesses do business and their plans for growth.
36 percent of businesses affected by labour shortages have changed or cut the products or services they offer, and 26 percent have cut their planned investments in capital.
More than a third of companies have given one-time bonuses instead of pay raises, and almost half have moved up pay reviews or given multiple pay raises in the past year.
Matthew Percival, a director at the CBI, said that when businesses spend a lot on their employees, they have less money to spend on other parts of their business.
He said, “Businesses are doing everything they can to get and keep employees, but this makes it harder for them to invest in things like training and automation that boost productivity.”
“If we want to grow and build an economy with higher wages, we’ll have to make shortages less of a problem. This will make it possible for more money to be invested. That means helping more British workers overcome obstacles to getting jobs, like a lack of affordable child care, and taking a practical approach to immigration.
Percival said, “The first step should be to update the Shortage Occupations List as soon as possible.”
44% of the people who answered the survey want temporary visas to be given for jobs where there are severe shortages.
Nearly three quarters of those surveyed said that the lack of workers makes the UK a less attractive place to do business. This could hurt the government’s plan to get growth back to where it was before the 2008 financial crisis.
Seventy percent of those surveyed said that access to labour would still be a threat to competitiveness in five years. This is what many businesses think.
Almost half of the companies polled want the government to help them invest in technology and automation to make their businesses more productive.