The UK Transport and Logistics job market is experiencing one of its most uncertain phases in recent history. This year, transport and logistic vacancies reached their highest mark for a century. Rain Newton-Smith, Chief Economist at the Confederation of British Industry noted that the rise in demand, which has come from an influx of order requirements from suppliers, is leading businesses to hire more staff and plan further investment training. While increased work availability is a prospect that both employers and job seekers have reason to be excited about, the reality is that there is a growing suitable candidate and skills shortage. This means that businesses are unable to capitalise on their increased, post-covid demand. Employers have recently had to improve their proposition to ensure that they are attracting candidates, this has resulted in a recent rise in salaries.

The question that many employers will have is what has been the cause of this perfect storm of skills shortages, and if there is any projection on if this shortage will begin to recover or if all should expect this to be the new normal. Brexit and Covid-19 are often recognised as perpetrators of these skills shortages – we explore the validity of these usual suspects as well as the possibility of other explanations for this trend.

Recent data provides evidence to unprecedented skills shortage

Skill shortages are not new within the UK job market, with the last major one occurring in 2008. Nevertheless, it is difficult to ignore the notable rise in demand within the UK over the past 12 months. Employers are increasingly interested in having people join their business, evidenced by employer confidence levels in hiring reaching an unprecedented high of net +33 between April and June 2021. Job vacancy data also supports this trend, Reed has recorded a 261% increase in job vacancies each month since May 2021. Recent data shows that UK based transport, logistics and warehouse roles job vacancies have trebled between January and July of this year. This is not exclusive to the transport and logistics industry either, with retail, banking and customer service roles also experiencing considerable growth in vacancies.

While many of these businesses are actively recruiting for professionals, the Annual Manufacturing Report 2020 evidences how British manufacturers are experiencing their largest shortage of skilled workers since 1989. Similarly, transport and logistic roles in the UK is currently facing the quickest downfall in staff availability in recorded history. Again, this has extended to other industries within the UK. It could be argued that the transport and logistics industry is more susceptible to workforce shortages in comparison to other industries due to the age of the talent pool, who are found to have a more aged profile in comparison to other sectors. 37.6% of transport managers in the UK are above the age of 55 – these age groups were also found to be the most likely to be leaving the industry within the next five years. Understandably, those higher in age are also more likely to be affected by Covid-19, which is recognised as a prominent factor for this trend within the UK job market.

Covid 19 Pandemic creating mass uncertainty for employers

Economists do not hesitate in referencing the Covid-19 pandemic when explaining reasons for staff shortages across the UK, and rightly so, the pandemic has impacted the labour market in ways that few could have predicted. This was most notable in the national lockdowns which took place throughout 2020 and the start of 2021, making a large population of the working population unable to work.

Such an unexpected event required the Government to react firmly, which they did in April 2020 through the introduction of the furlough scheme. While this provided invaluable support for workers who would have otherwise been at risk of losing their jobs, in recent times, it is appearing to be somewhat a double-edged sword, as many shortages are a result of workers that remain on the furlough scheme, unknowing if they will be returning to their previous position. As the furlough scheme is set the conclude in September 2021, employers will hope that this will provide some much-needed relief in the UK skills shortage.

With the UK being one of the worst-hit areas in Europe, many foreign workers chose to return to their homeland. As travel and immigration rules in response to the Covid-19 pandemic have changed – many foreign workers are yet to return to the UK, with their intentions of doing so still mostly unknown. Similarly, many foreign students opted to return to their homeland for the remainder of their teaching, as this was being administered virtually. Ultimately, Covid-19 has resulted in a proportion of the workforce out of the job market, therefore putting the transport and logistics industry in a challenging position in replacing them.

The second half of 2021 has seen the UK move towards more movement, which has seen employers reopen their workplaces to employees. While there remains tentative confidence that this can mark the return to their pre-Covid status, many recognise that it is too early for companies to make too many arrangements in amending their processes as if we are at the end of the pandemic.

Ultimately, it appears that both Covid-19 and Brexit have played a large part in the current skills shortage, this sentiment was echoed by Jonathan Portes, professor of Economics and Public Policy at King’s College London, who stated “a lot of people left because of Covid, but a lot of them may not come back because of Brexit.”

Brexit causing a skills shortage within the market

The UK leaving the European Union (EU) can be recognised as a key reason for the skills shortage within the UK transport and logistics industry. This was something that many commentators predicted, like Kevin Richardson, Chief Executive of The Chartered Institute of Logistics and Transport (CILT) who in 2019 noted how the upcoming years would provide a range of concerns in recruitment within the logistics industry, with Brexit likely to cause many professionals to seek other career paths that offer more stability. Although half of the logistics sector were prepared for Brexit, many experts continued to anticipate an impact on companies’ day-to-day operations.

December 2020 marked the end of free movement and the introduction of a points-based immigration system. This new system treats EU and non-EU citizens equally, meaning any non-UK citizen will need to apply for permission to work in the UK and must meet a specific set of requirements for which they will score points – Visas are gained by earning enough points. This has made hiring professionals from outside the UK a timelier process, which therefore impacts their ability to carry out work swiftly. This issue only intensifies considering the 79,000 EU workers within the logistics sector who have left the UK in 2020. The UK Government have confirmed that tighter border controls will not be relaxed until the start of 2022 at the earliest, which puts employers in a difficult position when knowing what next stages to take.

Logistics UK, the country’s leading trade association, has recently called for government support in offering interest-free loans or grant to support businesses in the high costs associated with driver qualifications and apprenticeships as well as investments into driver facilities to make the career more attractive. This request sparks an interesting conversation within the current job market – what are the expectations of candidates for potential employers, and has this changed post-Covid-19 and Brexit?

 

Changing landscape of UK employees

The Covid 19 pandemic and Brexit are often recognised as the usual suspects when it comes to a shortage of skilled professionals within the transport and logistics industry. While these are undoubtedly fundamental causes of the skills shortages that we are experiencing, many commentators ignore the presence other factors which also can be seen as a cause for this.

There is a growing belief that employers within the transport and logistics sector are considering a career change at a higher rate than ever before, this is already a trend that has been found within the Financial Services industry. These professionals cited a range of factors of why they were considering such a move, including long working hours, long commutes, and heavy regulation – something that many transport and logistics professionals experience also. This begs the question of whether candidates today have higher expectations of their employers.

As already discussed, are now enjoying a higher salary. To many, this indicates a shift in the balance of power from the employer to the employee. Candidates are now more demanding than ever, reporting a range of expectations that they have for future employers. Interestingly, 2021 has seen more people than ever leaving their role to pursue their hobby becoming a career. Recent research suggests that not only are candidates utilising the lockdown to develop new skills, but there has been a shift in the skills that employers are looking for in transport and logistics professionals and logistics managers.

Many will see that as a chicken-or-egg type situation – did employees feel this way before but did not feel they could act upon it, or did the Covid 19 pandemic and Brexit allow them to reconsider their priorities? While this is a viable question, the real reality is that a range of trends have emerged of what candidates are looking for when they are looking for a new role and feel more empowered than ever in selected the opportunity that they feel is right for them. This demonstrates a shift in the balance of power between the employer and employee.

So, what can employers do about the skills shortage?

The consensus is that it remains too early to make any conclusions regarding the outlook of candidates within the logistics and transport industry. What many do agree with is that throwing money at the issue (in the form of offering a candidate a higher salary) is for the most part not the right strategy for this. Economists encourage employers to follow these steps to ensure that they have an interesting proposition for employees:

• Focus on employee retention through investing in the inclusion of current staff, providing frequent onboarding and training to employees

• Implement a consistent grading system within your organisation. This enables the business to successfully benchmark their employees, which ensures that they have a clear

• Be transparent with grading, as it communicates to professionals what competencies they need to achieve to be able to earn a salary, as well as have the peace of mind that their salary is not disproportionate to their colleagues.

• Do not ‘over-hire’, the transport and logistics industry remains in a fragile position and over-hiring can put companies in a precarious position.

• When it is time to recruit, make sure that you are clear with what skills you require candidates to have, as well as communicate which you would be willing to support in developing.

Hopefully this blog should have demonstrated why the UK skills shortage in Transport and Logistics is occuring while explaining some key strategies that can improve the situation. However, if you need help with your recruiting, whether it be in Transport, Logistics, or any other industry, we have a team of experts that can help. We’ll help you find and understand your talent pool better through our Talent Mapping service, ensuring that your quality of hire is never sacrificed due to lack of time or choice.  Or we can completely overhaul your recruitment process with our Strategic Audit service. We have a range of flexible bespoke services, so contact us today for more information! 

 

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