What is creating the skills shortage?

There have been UK skills shortages for some time, particularly across the manufacturing and engineering sectors. However, since the pandemic, these skills shortages have spread into other sectors, including hospitality and professional services. In this article, we look into what has caused the skills shortage across a number of sectors.

Why is there a skills shortage?

Brexit

There are a few factors that have caused the skills shortage across the UK. Firstly and perhaps the most obvious reason is the reduction in EU migration post-Brexit. Research from the Centre for European Reform’s found that the UK’s workforce has shrunk by 330,000 since Brexit. This is after accounting for the gain of non-EU workers.

Whilst these numbers may seem insignificant compared to the total number of people employed in the UK, this does make a difference as the reduction in the UK workforce has a disproportionate impact on certain sectors. EU workers would typically work in the transport, manufacturing or retail sector. These EU workers would tend to be skilled workers and would often progress into more skilled roles in business or professional services, which is now contributing to the skills shortage in these areas. Despite an increased number of non-EU workers arriving in the UK, these people are filling different skills gaps compared to those workers that were arriving from the EU.

The pandemic

Research has found that the pandemic has triggered many workers over 50 to retire. This is the age group where there has been the largest loss in the workforce. Many of those in this age bracket were already in a position to retire but had chosen not to. However, since the pandemic, many workers in the over-50 age range have decided to retire or at least try-out retirement. Many of those in this age range have decided not to return to work, especially those in professional service roles where hybrid working has become the new norm. It is believed that workers in older age groups have found the transition to hybrid/remote working more challenging than their younger counterparts which made many feel side-lined. For many businesses losing so many experienced employees during a 2-3 years period has been very damaging. These employees provide many businesses with much-needed experience which can be passed down to the younger generation. Many businesses are now looking for solutions to accommodate the needs of older employees in order to improve retention.

Conclusion

Overall, a combination of a reduction in overseas workers and more of the over-50’s choosing to retire at the same time have contributed to a shortage of workers across multiple sectors.