In this session, recorded 19 January 2022, Matthew Fell (Chief UK Policy Director, CBI) is joined by Jennifer Beckwith (Head of Employment Policy, CBI) and Richard Ballantyne (Chief Executive, British Ports Association) for a discussion on energy, supply chains and labour shortages that firms are currently facing, and what businesses can do to mitigate these ongoing challenges.
19 Jan 2022, 3 min read
Watch the webinar
Speakers:
- Richard Ballantyne, Chief Executive, British Ports Association
- Matthew Fell, Chief Policy Director, CBI
- Jennifer Beckwith, Head of Employment Policy, CBI
- Liz Moseley, Editor and Partner, Tortoise Media (Chair)
In this session:
Matthew
- Supply-chains: current issues have their origins in stop and start nature of Covid.
- Result, increased lead times, unpredictable, pushing up costs "everyone wants the same stuff asap".
- Labour: there is currently a "complete war for talent"
- Energy: global issue, wholesale gas prices. Reliance on gas in our energy and electricity mix.
- While consumer dominates headlines - link to cost of living. Pushes up inflation by 1-2%, it’s hurting businesses too, on top of labour and supplies. Particularly for energy intensive sectors. Energy suppliers too - impact of price cap linked to wholesale prices.
- These "cocktail of issues" facing firms are diverting attention away from long-term trends - future of work, and net zero, and growth.
Jennifer
- Real gap between labour supply the UK has and the demand for labour. Vacancies continue to be at a record high.
- In addition, 4000 people of working age left the workforce during the pandemic and this is putting lots of pressures on firms.
- On demand side – big reopening and strong customer demand.
- Demand for certain roles has also changed: big shift to ecommerce and home delivery – we won’t go away – so we’ll need more logistics workers and haulage operatives.
- In addition, shift to remote / hybrid working means cybersecurity professionals in more demand.
- Means that competition is fierce and not just local labour market pressures but competition from employers in cities or other locations.
- Cost of living pinch: likely that pressure on wages means an incentive for people to re-enter labour market, but on early retirement this is voluntary.
- Likely to see these pressures continue to the labour market for around 18 months – 2 years.
- Picture on pay increases – won’t be sustainable for firms unless backed up by productivity increases.
Richard
- Ports employ 115,000 across the UK – big employers.
- Container shortages have caught the attention of the media – a very global market, takes a lot of goods.
- Storage / demand / warehousing – the sector still hasn’t got to grips with this fully but getting there.
- Demand is also causing inflationary cost pressures but has started to settle down.
- Expecting supply chain issues for another year.
- Perfect storm of labour shortages and leaving the EU causing issues: fewer domestic drivers in the UK, goods arriving in UK ports are taking longer.
- Next 12 months: Brexit, costs and time with new arrangements, logistics sector is just going to have to take on the chin.
Further resources
