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CIPD warns that skills shortages are looming

The latest labour market data indicates that the UK jobs market is in good health but there are warning signs that skills shortages could become a problem as the supply of EU nationals falls.

The latest Labour Force Survey from the Office for National Statistics (ONS) shows that the employment rate reached a record 74.6% at the end of 2016 - the highest employment rate since records began in 1971.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: 

"The latest figures confirm that the UK jobs market is in good health. It remains likely that even if economic conditions become more subdued over the near-term, the underlying resilience of the UK's jobs market will help ensure that we don't see a marked deterioration in recruitment."

However, Thiru said the Chambers' own survey data suggests that while "hiring expectations have improved … firms continue to report considerable difficulties in recruiting the right staff."

The Chartered Institute of Personnel and Development (CIPD) has raised concerns about the falling supply of EU nationals. The latest Labour Market Outlook from the CIPD and the Adecco Group has found that "labour and skills shortages are starting to bite in UK sectors that employ a high number of EU nationals."

It reports that "despite a near record number of vacancies … UK employers are struggling to fill roles with the right candidates as a result of both labour and skills shortages."

The CIPD said: "Low-skilled sectors that typically employ a large number of non-UK nationals from the European Union are facing particular recruitment challenges with vacancies in retail and wholesale, manufacturing, health and accommodation and food services."

The CIPD report also says one in four employers (27%) have seen evidence to suggest that non-UK nationals from the European Union are considering leaving their organisation and/or the UK in 2017.

Gerwyn Davies, CIPD Labour Market Adviser, said: 

"This is creating significant recruitment challenges in sectors that have historically relied on non-UK labour to fill roles and who are particularly vulnerable to the prospect of future changes to EU immigration policy."

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