Labour shortages lead to revenue losses for four-in-ten UK manufacturers

Delays in projects (38%) also a consequence of the skills shortfall

Four-in-ten organisations (39%) have cited revenue losses as a key long-term consequence of the labour shortage. This is according to new research by Visual Components of manufacturing decision-makers in the UK.

In further findings from the research, increased labour costs (57%) are also identified as the main short-term consequence, alongside delays in projects (38%), profit or revenue declines (30%) and an inability to meet customer demand and production targets (25%).

With talent at a premium, organisations have had to spend more from their strained budgets on new hires. 95% of UK businesses have had to dig deeper into the company reserves to offer higher salaries to attract in-demand talent.

The need to offer higher salaries is only adding to the overall wage bill as overtime becomes a necessity to remain productive. Greater pressure is also being added to budgets as rising costs and inflation (55%) continue to take hold.

“The labour shortage is a significant contributing factor in rising costs for UK manufacturers. Simulation software offers an opportunity to upskill existing staff and reduce the reliance on expensive skilled staff from external sources. This can empower employees on the factory floor to meet customer demands and revenue targets against an economic backdrop that remains challenging,” says Mikko Urho, CEO, Visual Components.