Almost half of employers report having vacancies that are “hard to fill”, and more than a quarter expect the number of these unfilled positions to increase during the next six months.

The latest findings out today from the quarterly Labour Market Outlook produced by the Chartered Institute of Personnel and Development (CIPD) have prompted the group to renew its call for temporary interventions on immigration policy to ease labour shortages. Failure to do so will undermine efforts to transition to a high-skills economy, the CIPD claims.

From its survey of more than 1,000 employers across all sectors of the economy, the proportion of those with hard-to-fill vacancies jumped from 39 per cent in the second quarter of this year to 47% in the three months to the end of September, just as the furlough scheme was coming to an end. Furthermore, 27% said the number of vacancies that are difficult to fill will likely increase during the next six months.

Hard-to-fill vacancies were most prevalent in the construction, healthcare, public administration and defence sectors.

The findings chime with those from the latest Quarterly Industrial Trends survey from the Confederation of British Industry (CBI), which showed concern about the lack of skilled labour was at its highest since 1974. Nearly a third of CBI respondents were also concerned about the availability of other labour, the highest in the survey’s history.

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The CIPD says the rapid expansion in hiring activity combined with a fall in labour supply underlines the need for a temporary job mobility scheme for young EU nationals. This could be built on the current Youth Mobility Scheme meaning it could be quickly introduced to counter some of the shortages, particularly for low-skilled roles that are proving more difficult to fill.

“More business support is required from Government to help employers increase their capability to invest in skills and create better quality and more productive jobs,” said Gerwyn Davies, senior labour market advisor for the CIPD. “This is essential if the UK economy has any hope of transitioning to a high-skill, high wage economy.

“The research findings strengthen the case for extending the existing Youth Mobility Scheme. This would prove a timely, cheap and effective ‘safety valve’ to help ease immediate labour shortages.”

He added that reforms are also needed to the Apprenticeship Levy to broaden the range of qualifications that are more relevant for hard-to-fill roles. Key examples include NVQs for support workers and HGV driver training and licences.

Just 10% of employers reported plans for redundances in the run-up to the closure of the furlough programme at the end of September, down from 13% in the second quarter. The CIPD said this suggests that the end of job support measures will not lead to the widespread redundances that had been feared.

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Paired with the uptick in recruitment, the modest decline in redundancy intentions points to the continuation of labour shortages in the months ahead. The CIPD noted that on average, employers received 16 applications for the last low-skilled vacancy they tried to fill, compared to 20 applicants in the previous quarter.

Employers have adopted a variety of tactics to combat these difficulties, with 47% raising wages in the past six months for hard-to-fill vacancies. A further 44% have begun upskilling existing staff, 27% are hiring more apprentices, and 20% said they were improving job quality.

“Employers have a challenging few months ahead with many anticipating increased recruitment difficulties,” Mr Davies said.

“On the upside, it’s positive to see that some employers are getting better at sourcing labour by taking steps to improve how they recruit, retain and train staff. However, there’s a relatively long tail of employers who could be doing more to attract and make full use of available workers.”

The CIPD’s net employment intentions figure, which measures the difference between the proportion of employers expecting to add jobs versus those planning to shed staff, rose for the fifth consecutive quarter to +38, up from +32 in the second quarter. That is the highest since tracking began at the end of 2012.