Revisiting the importance of employee retention and principles of good work in addressing the current skills and labour shortages in Scotland

Workforce shortages are commonly problematised as either a lack of specific skills, for example, those associated with new tasks or changing occupational profiles, or more generally, as shortages of labour due to demographic changes and replacement demands. These aspects are relevant to Scotland, but they play out in the reality marked by other contextual factors such as post-Brexit, post-pandemic, and the current cost-of-living crisis. This reality is proving to be difficult for many working people, but also for the Scottish employers, who report recruitment problems with filling many vacancies and who experience both labour and skills shortages as they struggle to find available, skilled, and willing workforce. Particularly significant and challenging shortages have been noted for a while in contexts with high employee turnover and seasonal work (such as care and health, retail, agriculture, hospitality, and other service sectors). Many jobs in these sectors are associated with low-status, low-pay, and little flexibility. Not surprisingly, they contribute to a dangerous phenomenon of increasing in-work poverty, which suggests that many jobs in Scotland do not pay people enough to earn a decent living. Importantly, in the post-Brexit Scotland the most hard-to-fill vacancies tend to be in these low-paid sectors. At the same time, the financial pressures of increasing costs of living and inflation,seem to further exacerbate economic inactivity or underemployment for many groups of workers, such as those with health concerns and care responsibilities.

These contextual factors intensified the recruitment difficulties and invite to look at skills and labour shortages from a more holistic perspective. The chapter proposes to consider the employers’ role and responsibilities in minimising the impact of the recruitment gap and unfulfilled labour demand. This is to be achieved by paying attention to elements employers can influence, as opposed to the changeable and largely uncertain cycles of labour supply in general. Particularly in a thigh labour market, employers should prioritise preventative measures to retain the hard-to-replace workforce and develop programmes to sufficiently re-train and upskill the existing workforce in line with business demands. Drawing on data from Scotland, this chapter will, firstly, describe and contextualise the labour and skills shortages, with an emphasis on recruitment challenges currently experienced by Scottish employers. Secondly, in the context of current labour scarcity, it will invite a focus on employee retention as organisational practice to make work attractive, fair, satisfying, and rewarding. The chapter will finish by listing non-questionable principles in job improvement and workforce development areas that employers must provide to retain their current workforce and attract new, including capable workers not currently in employment.