Ben Daniel, partner at Weightmans, looks at the potential impact of the driver shortage on Christmas deliveries.
For some time there has been a shortage of LGV and HGV drivers in the UK, which has now put the industry on a precipice. The success of the continued recovery of the economy is also linked to the challenges facing the logistics industry. With Christmas just around the corner, the impact upon the delivery (and cost) of this year's latest toy or gadget may sharpen that focus.
The Road Hauliers Association (RHA) which represents UK hauliers, and the Freight Transport Association (FTA) have both called on the government to allocate additional funding to help plug the skills and recruitment gap. The problems faced include an ageing workforce, combined with a failure to replace retiring drivers with new, younger recruits. The pinch is being felt at both ends. Older drivers are retiring earlier. One catalyst for this was the compulsory Certificate of Professional Competence which was introduced last year. Many older drivers decided that sitting in a classroom and being told how to do a job which they had been doing for years was not something that interested them. At the other end, the rising cost of qualification for the younger generation presents a significant barrier to entry.
There are no student loans, or grants available. Hauliers themselves face the cost of training and taking on new drivers, up to £3,000 – a tough ask when margins are already slim. Insurance companies play their role in increasing difficulty, by insisting that drivers under 25 have 2 years' HGV experience.
What can be done?
· Hauliers can invest in new recruits, however that could be costly and has no guarantee of success. Of course, safeguards can assist. The ability to claw back staggered training costs should a recruit leave in say six to 12 months, protects (at least to some extent) the investment made by a haulier. The industry can properly be presented as a career with development opportunities for those who do not see all of their working life behind the wheel. To add further perspective here, the sector is the fourth biggest employer in the country.
· Resource imported from Europe, particularly Eastern European countries, is not a new phenomenon. Therefore, employers who have already utilised this will avoid any further significant cost in putting in place the infrastructure to make the recruitment drive a success. There still remains the cost of ensuring the drivers have their CPC qualification. Using resource from Europe may also allow for lower salary costs. However, caution should be taken to avoid a two tiered workforce which could give rise to discrimination complaints. Cross jurisdiction training requirements and the right to work checks are important considerations not to be left out. Employers can now be fined £20,000 per employee without the correct right to work status.
· Improving the conditions, and potentially benefits, for the existing workforce may improve retention rates. That does not resolve the recruitment gap but will hopefully help to stop it from widening even further. This can also be combined with creating the opportunities for potential internal hires from within the haulage companies themselves.
Ultimately, hauliers are in for increased costs which may in turn increase the price of your Frozen doll this Christmas, if it gets there on time.....