The Crisis of Staff Shortages in Scottish Businesses
Tens of thousands of businesses across Scotland are facing a growing crisis as they struggle to maintain their operations due to severe staff shortages. This issue is not only affecting the daily functioning of these businesses but also threatening the overall health of the Scottish economy. According to recent research, one in three small businesses has had to reduce their opening hours, close on certain days, or scale back their services because they cannot find enough workers.
Business owners are frustrated as they lose out on potential revenue, not because there is no demand for their products or services, but because they simply cannot find the right people to work. This problem is particularly acute in rural areas, especially in the Highlands and Islands, where a shrinking population makes it difficult for businesses to attract and retain workers. Even when staff are available, many lack the necessary skills and commitment to perform the required jobs effectively.
The situation is alarming given that the unemployment rate in Scotland currently stands at 3.7 percent, with over 90,000 Scots unemployed. Business leaders have called for urgent action to address this critical issue, leading to heated political debates about the best ways to support the economy.
Guy Hinks, chair of the Federation of Small Businesses Scotland (FSB), emphasized the impact of the staff shortage on economic growth. He highlighted that small businesses are the backbone of the Scottish economy, with around 350,000 firms employing over 900,000 people and generating £93 billion annually. These businesses face immense pressure, often having to make difficult decisions to survive.
The FSB recently conducted a comprehensive survey of its members, revealing that one in three small businesses has made changes to their operations over the past year due to staff shortages. Almost one in five businesses cut services, while one in 14 reduced their opening hours. Many business owners and senior managers have had to step in to handle day-to-day tasks, which diverts their focus from running the business.
In rural and remote areas, the issue is largely driven by demographic factors, such as a declining population and an increasing number of retirees. In the Highlands, more than two-fifths of small businesses reported difficulties in finding local workers. The FSB also noted that many businesses are concerned about the basic skills of their employees, including communication, problem-solving, and teamwork.
Construction and hospitality sectors have been hit the hardest by these shortages. The Tory party criticized the current government for failing to support businesses adequately, pointing to anti-business policies and a lack of investment in training and workforce development. They argued that the failure to address these issues has led to a significant decline in skilled labor availability.
The Scottish Government has placed blame on the UK Government for blocking regional visa initiatives and introducing restrictions on overseas workers. Deputy First Minister Kate Forbes emphasized the need for tailored migration routes to help grow the economy and strengthen public services. She also called for the reversal of recent changes to the immigration system that have created additional barriers for businesses relying on international talent.
A Personal Perspective: The Struggles of a Hotel Owner
Richard Drummond, director of Turas Hotels, shared his personal experience with the challenges of staff shortages. As a hotel owner in the Highlands, he finds it frustrating to have to close early despite high tourist demand. Even during peak seasons, he is forced to operate with limited staff, which impacts his ability to serve customers.
Mr. Drummond runs several venues, including hotels, restaurants, bars, a distillery, and a brewery. He explained that the lack of restaurant staff has forced him to assist with serving meals, highlighting the strain on his team. He noted that Brexit and changes to visa regulations have made it harder to attract workers from overseas, while the demographics of the Highlands pose additional challenges.
The short-term and seasonal nature of hospitality jobs, combined with a lack of affordable housing, further complicates the situation. Mr. Drummond stressed the importance of tourism to the Scottish economy but expressed concern that the industry is not being taken seriously enough by the government.
He called for more support for the hospitality sector, especially in rural areas, emphasizing the need for targeted policies to address the unique challenges faced by small-scale operators. His experience reflects the broader struggles of many businesses in Scotland, underscoring the urgent need for solutions to the ongoing staff shortages.