Latest Logistics UK business survey captures an industry in choppy waters

Respondents to the survey – the 13^th in the series – reported that the HGV driver shortage continues to impact many areas of their business. More than nine out of ten (93%) of those surveyed reported problems trying to hire HGV drivers and 40% reported very severe problems, as the availability of drivers showed only slight improvement in the three months to November.

Set against a growth in job vacancies, the number of HGV drivers claiming Jobseeker’s Allowance was just 80 in October 2021, according to the latest UK Labour Market statistics, a number so low that the pool of available drivers seeking work can be described as negligible.

PAY BECOMES A KEY RECRUITMENT AND RETENTION TOOL

Rates of pay and the departure of EU citizens were the two reasons respondents most often attributed to HGV drivers leaving their roles. When asked why more people were not joining the industry, unsociable hours, industry image and rates of pay were the reasons most often cited by respondents.

Pay is becoming an increasingly important recruitment and retention tool for the sector. More than eight out of ten (84%) of respondents reported raising driver pay in the last six months. The average increase in pay was 11.4% and the main reasons reported for raising pay were driver retention and market forces. So-called ‘golden hello’ incentives are becoming more common in the sector, with around one in six respondents (16%) stating that their organisation had offered a sign-on bonus to attract new drivers, with the average payment being £800.

Of those surveyed that had not already raised pay, almost two out of three (64%) said they planned to do so in the next six months.

The demand for skilled logistics employees remains significant. According to vacancies data for 19 November from the Office for National Statistics (ONS), the number of transport/logistics/warehouse online job adverts was 58% higher than the same period in 2020 and nearly two and a half times that of all industries.

SALES AND PRICES RISE, BUSINESS OUTLOOK FLAT

Despite the labour issues, UK retail sales volumes were 5.8% higher in October according to the ONS, compared to pre-pandemic levels in February 2020. Soaring energy prices combined with shortages of construction materials and semiconductor chips have caused supply problems, which has placed upward pressure on prices. When asked to rate their financial health on a scale from one to ten, surveyed companies reported a slight dip from 7.5 to 7.3.

In the three months to November, the business outlook for survey respondents for the next six months flatlined at 6.6. The headline rate of inflation, the Consumer Prices Index (CPI) rose to 4.3% in October. These rising prices were reflected in the UK economic outlook for the next six months as reported by respondents, which fell from 6.2 in May to 5.0 in November. Smaller companies and a small proportion of road haulage companies surveyed were more likely to report poor financial health (below 5.0) while larger fleets are also beginning to report poorer financial performance.

“The latest Logistics Performance Tracker reveals a mixed picture for the logistics sector,” said Sarah Watkins, Deputy Director – Policy Information, Logistics UK. “While the driver shortage continues to impact on many aspects of business, the availability and recruitment of HGV drivers showed a slight improvement in the three months to November. However, HGV driver roles continue to be the most difficult to fill with more than nine out of ten of our respondents reporting recruitment challenges.”

*www.logistics.org.uk/lpt

Published On: 09/12/2021 16:00:34

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