I read an article published by the FT on the 26th of August 2021 titled ‘Britain’s labour shortages boost workers’ clout’. This article describes the state of the UK labour market. The combined effect of Brexit and the Covid – 19 Pandemic means that the baton has changed from the employer to the employee or from the client to the service provider. Capital no longer dictates the price for labour.
Across all sectors of the UK, there are labour shortages. Supermarkets, hospitality, health, and social care industries all struggling to recruit and fill their vacancies. For some time now industry bosses have been warning of the looming impact of labour shortage on the economy.
The days of security officers knocking on the doors of employers looking for work are gone, and it is unlikely to return anytime soon. A few years back, a single advertisement for security officers will generate hundreds of responses. The last advertisement placed by our business generated less than 30% of the number of responses we would normally have received. There appears to be varying reasons for this, however, this shortage is exacerbated by the fact that security officers are leaving the industry to join other sectors as the economy reopens. The lockdown has also given many security or potential security officers, as happening in many sectors, the opportunity to consider available options.
What this means is that the basic principle of demand and supply in economics come into play where prices will be pushed up when demand exceeds supply and vice versa. The workers are now dictating the price of their labour and not capital. We have seen security officers not asking for increment of wages but telling us what must be paid for their services. This has been confirmed by most of my colleagues in the industry.
For us, the consequence of this is that the agreements which have been negotiated in the past for the supply of labour becomes either affected or must naturally be renegotiated because the basis on which they were negotiated have been displaced or become redundant.
It is time clients understand that the landscape for the industry is changing and we must all prepare to accommodate the new reality.
Richard A Harvey
Director
1. https://www.theguardian.com/business/2021/jul/08/uk-employers-struggle-with-worst-labour-shortage-since-1997
2. https://www.bbc.co.uk/news/business-58014256
3. https://www.gov.scot/publications/labour-shortages-letter-to-uk-government/
4. https://www.bbc.co.uk/news/uk-england-lincolnshire-58410363
5. https://www.bbc.co.uk/news/business-58394903