UK manufacturers are “tackling [labour] shortages using a variety of approaches, from increasing pay and offering more generous benefits, to increasing flexibility and upskilling their workforce,” according to a report by the Food and Drink Federation (FDF).
The report found that the food and drink sector is experiencing a higher vacancy rate than the overall UK labour market, with 6.3 unfilled positions for each 100 jobs in the second quarter of 2022 (Q2).
The food and drink industries vacancy rate in Q2 is above the UK’s average of 4.2, with shortages reported across a wide range of roles and skills, from high-skilled roles (engineers, HR and legal) to technical specialists (butchers and laboratory technicians) and production operatives.
Whilst FDF said that manufacturers are doing what they can to minimise the shortages, it added that the vacancy rate is impacting production levels and costs, and adding to the “enormous pressures seen by the industry over the past two years.”
As a result, many businesses are looking to invest more in advanced technologies. However, FDF said that “uncertain economic outlook and the range of upcoming, complex government regulation is holding them back.”
Pressure on wages
The low labour rate across all UK sectors is due to more people retiring earlier and more people reporting long-term sicknesses, according to the FDF, and as employers struggle to fill positions, despite signs of slowing economic activity, pressures on wages will remain high.
FDF said: “Earnings data confirm this, with nominal regular pay growing by 5.4% over the three months to August, the strongest growth since records started, excluding the pandemic period. In real terms, regular pay fell by 2.9%, also among the largest falls in real pay growth.”
It added: “High wage rises coupled with low unemployment will keep the pressure on the Bank of England to raise interest rates. But while higher interest rates will stifle growth, elevated wage pressures will not squash inflation, leaving the Bank facing a tough conundrum.”
FDF welcomed the UK government’s newly announced, independent review into labour shortages across the food chain.
However, it added: “We also need to see the skills system work better right across the country as well as a reformed and more flexible Apprenticeship Levy.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
