UK retail and hospitality sectors face labour shortage due to Covid and Brexit

The reopening of retail and hospitality businesses is driving employer plans to hire at the fastest rate in eight years, according to a new study by the Chartered Institute of Personnel and Development (CIPD) and the recruitment firm Adecco.

Yet, a separate study by the professional body for HR and people development, found that a sharp decline in EU and international workers in the UK was fuelling the risk of a labour shortage. 

Adzuna said that since February 2020, the number of overseas job searches from western Europe and North America had halved – a decline of about 250,000. The decline in particular was driven by waning overseas interest in typically lower-paid service industry jobs. 

Adzuna co-founder Andrew Hunter said: “There is hot competition for staff, with many hospitality and retail workers having left the industry to look for more secure work after the ups and downs of the last year.

“There are also far fewer foreign workers seeking employment in the UK, with overseas interest in UK jobs more than halving from before the pandemic, hitting these industries hard. UK employers can no longer rely on overseas workers to plug employment gaps.”

Business leaders have warned the government that this risk of international workers risks “putting a handbrake on recovery” with more than 1.3 million workers having left the UK since the end of 2019. 

Unemployment in the UK has stabilised in recent months, helped by the extension of the furlough scheme until the end of September, after the fastest rise in redundancies on record in late 2020 when Rishi Sunak sought to scrap the wage support scheme.

The Bank of England has forecast unemployment to peak at 5.5% when the scheme ends. Pre-pandemic unemployment stood at some 4%, around 1.3 million people.