Economic recovery in South West held back by skills shortages and recruitment difficulties

Despite welcome news of a rebound in business activity, confidence and cashflow, albeit from an historically low base, the speed and extent of the South West’s economic recovery is threatened by labour market tightness and recruitment issues, according to the latest Quarterly Economic Survey.  

British Chambers of Commerce South West (BCCSW) are seeing issues for businesses trying to recruit at all skill levels. From the highly skilled manual and technical roles, where two thirds are experiencing difficulties finding the right staff, to the professional and managerial personnel that over half of services-based firms are struggling to hire. The problems pervade further down, with almost a third of businesses having difficulties filling semi or unskilled positions.  

Whilst there is no easy fix to the variety of issues our region’s labour market is struggling with, BCCSW warns that real solutions are required to address both the current and long-term shortages of talent and people that businesses need to grow out of the recession. 

Short term interventions such as improving the operational delivery of the government’s much hyped ‘Kickstart’ programme; a review of the visa system - especially the earnings thresholds for bringing back workers from overseas in the near term with the skills that businesses need; and considering changes to the Universal Credit requirement to be looking for work (which was suspended early on in the pandemic) could all play a part at least for the lower skilled or seasonal roles across the South West.

The longer-term skills agenda is also key. Businesses are calling for the government to set up and properly communicate a comprehensive and mature roadmap to upskill our residents and communities to adapt to the long-term employment needs of our economy. The government’s Skills and Post 16 Education Bill will have an important role, as will the announcement of the Local Skills Improvement Plans (LSIPs). 

British Chambers of Commerce South West’s Phil Smith comments: 

“The sudden resurgence of business activity has meant that businesses who need to recruit are confronted by a tight labour market, especially for skilled staff. 

“The double impact of Brexit and COVID-19 has had major impacts on the location and availability of the workforce in the South West, with a falling but still significant proportion of our residents on either furlough or Universal Credit.” 

“We cannot let the talent and potential of our communities go to waste, or for that matter put at risk our economic recovery, due to tricky but ultimately solvable labour market challenges.” 

To view the full Quarterly Economic Survey report click here.