CEO Blog: Better funding and imaginative solutions key to solving labour crisis

November 15, 2021

Figures released by the Recruitment & Employment Confederation (REC) last week grabbed headlines as the labour crisis continues to bite.

Alongside the serious shortage of HGV drivers in the UK, the REC also highlighted a sharp escalation in vacancies for warehouse workers, citing a 9.1% rise in adverts for fork-lift truck drivers and 6.8% for goods packers between late October and early November.

UKWA CEO Clare Bottle comments:

“No doubt Covid has had an impact on the numbers of FLT drivers able to train, but as far as warehousing is concerned, FLT licence acquisition is both cheaper and faster than training as an HGV driver.  What’s more, being an FLT driver doesn’t require long periods away from home, which can create a barrier to quality of family life for some HGV drivers.

Brexit has clearly exacerbated our long-standing challenges with recruitment and retention of workers.  A couple of years ago, 15% of our HGV drivers were EU Nationals, but the equivalent proportion for FLT Drivers was 32%, which has meant that the so-called Brexodus of immigrant workers returning to their home countries has hit our FLT workforce harder.  And although the Brexit vote took place back in 2016, it was difficult for businesses to plan and prepare, since the arrangements for settled status were not published until 2019 and the timing of regulatory changes has been haphazard.

In the short term, companies have responded by simply paying more. Indeed, in some companies FLT drivers’ pay has gone up by an unsustainable 20-30% as employers struggle to attract and secure the labour they need. Many 3PLs are SMEs – certainly the majority of UKWA members are – and they simply cannot afford to absorb additional costs in an already low-margin industry, where staffing typically accounts for more than two-thirds of a business’s costs.

Looking further ahead, UKWA is focused on addressing labour shortages with more imaginative solutions. I have previously written about the Association’s links with organisations such as Tempus Novo aimed at widening the available talent pool and promoting diversity.  We are also determined to reach out to women, for whom FLT driving should be seen as a more obvious and promising career choice.

Long term solutions rely on better funding for important initiatives like Think Logistics, to raise awareness in schools of the many opportunities offered by warehousing and logistics.

Our post-budget member survey did not find a single warehousing business that was laying people off: almost all have labour shortages, some with vacancy rates over 20%. When asked what factors were most important for 2022, the issue of labour shortages came top of the list – considerably ahead of other concerns such as energy costs.

Accordingly, skills and training are at the top of UKWA agenda, along with digitalisation and sustainability. All are linked in ensuring we attract talented people into our long-undervalued industry.”