High street firms face ‘battle’ to recruit staff after labour pool shrinks

High street businesses are facing a “battle” to recruit staff against the backdrop of a shrinking workforce, with many workers having left the country or unable to work due to sickness.

Industry chiefs lamented the vacancy crisis facing businesses ranging from retailers to restaurants to care homes at a committee meeting of the economic affairs committee at the House of Lords on Tuesday.

Retailers still “don’t know the scale of the effect” of an additional 450,000 people who are long-term sick compared to 2019, according to Kris Hamer, director of insight at British Retail Consortium (BRC).

Hamer said retailers had been “having difficulty recruiting for some time now,” in part due to “the changing state of retail”.

A shift towards e-commerce businesses had necessitated “a change in the skills that are required,” with the sector now “accessing labour from different pools.”

Research from the British Chambers of Commerce (BCC) revealed this week that 62 per cent of businesses are looking to hire new employees .

However, it has not been an easy ride for those looking to bulk up their teams, as 76 per cent out of those trying to recruit are facing challenges with finding staff.

A “diminished labour pool” was the “key issue” for recruitment challenges, David Sheen, public affairs director of UKHospitality, said on Tuesday.

“That is having a knock on effect on the whole economy, which has an effect on every sector in possibly slightly different ways.”

He said there was presently a “battle” in the pub and restaurant sector, with “displacement” among industries and those who had once worked in hospitality flitting to other sectors.

More than 80 per cent of pubs and restaurants have been facing difficulties with recruiting enough staff, according to the BCC’s research. This is compared to a 62 per cent figure at the start of the year.

Labour shortages are “now preventing firms from operating profitably and they are being forced to turn customers away,” Alex Veitch, the BCC’s director of policy and public affairs, said.