A new report from the Chartered Institute of Personnel and Development (CIPD) provides a qualitative examination of the labour market in the context of the pandemic and migration restrictions.

Its key motivations are both to assess the true extent of the re-emergence of labour market shortages, the underlying factors behind them, and to understand how employers are coping with and responding to them.

The report highlights several issues that are critical to understanding current labour shortages.  Firstly, it is clear that labour shortages are rising, but these are restricted to a narrower range of occupations and industries – such as hospitality, arts and recreation and transport and storage – than many commentators suggest.

As both the survey data and focus group discussions illustrate, the incidence of labour shortages in many low-paying sectors is no more prevalent than before the pandemic in the vast majority of cases.

The research shows that some employers, mainly larger ones, have become better at sourcing labour from the domestic workforce. Upskilling and apprenticeships are the most popular responses to labour shortages.

Raising wages is another popular tactic used by employers, although many feel that this is unviable or unworkable in their sector, especially hospitality and social care.

Other tactics include offering a wider range of flexible working arrangements, developing career paths for those in entry-level roles and developing relationships with local education institutions.

However, this is offset by a tail of employers who are either in denial about labour shortages or in ‘wait and see mode’ in terms of a response.

Results from the young, unemployed jobseeker groups reaffirms the negative perception many jobseekers have of low-paying industries despite the pandemic. It was a very common view among our two groups of young jobseekers that the six low-paying industries covered in the research represented jobs that involved hard work, low pay and insecure work which offered little prospect of progression.

On the upside, it seems that some young people would be prepared to endure low pay for a period provided that suitable training opportunities and promotion possibilities were provided. This suggests that the tactic to raise wages, and in some cases, to offer ‘golden hello’ financial incentives to join an organisation, needs to be broadened to attract more applicants.

Despite the efforts of some employers to increase interest in roles, it is clear that some could also improve their HR practices. The research shows that some employers in low-wage industries are constricted to a narrow range of recruitment channels and labour pools.

The most recent official data shows that virtually all the extra jobs since the onset of the pandemic have been for temporary staff (up by 136,000 or 9%) even as the proportion of the workforce in temporary employment that would like a permanent job rose sharply during the same period (up by 134,000 or 34%). It therefore appears that inadequate people management and development practices are a key under-reported factor behind the shortages reported by some employers.

In addition, relatively few employers are aware of or have the resources or expertise to take advantage of various government initiatives, such as Kickstart.

To see the full report and additional commentary from the CIPD, click here.