UK’s Labour Shortage Post Brexit – Can AI Help?

The year 2021 was the first year that the United Kingdom worked independently of the European Union (EU) post the Brexit mandate. The UK prime minister, Boris Johnson, argued in favour of higher wages and productivity by controlling immigration from other European countries.

While COVID-19 has played its part in the labour shortage, it is hard to ignore the Brexit impact has on the labour shortage in the country. According to this Guardian article, there were four unemployed workers for every vacancy in the country during the earlier part of the 2020 pandemic. Now, the ratio is down to one worker for every vacancy, which simply means there are not enough workers.

In the aftermath of the COVID-19 pandemic, labour shortages in the U.K increased from 38% to 54%, costing the local businesses over £6.3 billion. A case in point of the UK labour shortage is that of the 5-star hotel, The Rubens at the Palace, which is struggling to find enough workers. The lack of experienced workers has even forced the hotel restaurants to shut down.

Can Artificial Intelligence (AI) help in addressing the ongoing labour shortage problem in the U.K? Let us discuss.

How AI can help in reducing the UK labour shortage

To deal with the ongoing labour crisis, U.K-based businesses are offering higher wages and benefits to retain their existing workforce, and even facilitating remote working. However, these workforce strategies are no longer enough. To worsen the labour shortage, there is the ongoing wave of “great resignation” where a record one-third of the U.K workers are considering a career change in 2022.

More employers are looking at digital technologies like AI to automate their processes, which can improve business outcomes and reduce their dependency on manual work or processes. While technology-driven companies like DoorDash and Uber are known to be agile at adopting AI and hiring the best candidates, the use of AI in hiring is now entering the non-technology domain.

One such example is Southwest Airlines which is designing AI-based chatbots to screen prospective job candidates and reduce the time needed to hire them. Apart from chatbots, AI-based recruiter tools can be used to source and screen the available talent and determine the best fit for the required job role.

AI technology is also playing its part in reducing employee churn with personalised training programs. For instance, personalised educational programs can be effective at reducing the skill deficit among frontline workers and improving their productivity.

AI and robotics tools are also adept at performing menial or repetitive tasks that most workers may be reluctant to engage in daily. For 24/7, these technologies can deliver better efficiency and quality service, and even improve supply chain management in the retail sector. For instance, AI-powered robots can reduce labour costs for retailers by one-third and fulfil customer orders in a 50% lesser time.

Does this mean that AI technology will solve the labour problem forever by replacing “human” workers? Will it be ultimately successful at replacing jobs performed by bank cashiers, hotel waiters, or construction workers? Yes, that is a sure possibility in some cases.

At the same time, AI adoption will also augment the skills of the existing workforce and help in improving their productivity. For instance, frontline operators in any manufacturing facility can now focus their skills on solving technical and sophisticated business problems, rather than concentrating their energy on low-skilled or repetitive tasks.

Next, let us discuss the future of AI technology in the hiring and recruitment process.

Is AI the future of hiring?

A Deloitte study found that 33% of respondents were using AI technology in their hiring and recruitment process, reducing both time and human bias in selecting the right candidates. 

For instance, an AI-based applicant tracking system can effectively reject 75% of unsuitable job resumes before the recruitment stage.

Here are some of the ways in which AI technology is streamlining the corporate hiring process:

• Faster screening of candidate resumes and other documents using keywords that are relevant to the current job profile.
• Accurate reviewing of the candidate’s professional background and experience.
• Removing any hiring bias against candidates of a particular race, colour, or religion.
• Instant job-related notification to the applying candidates using template-styled messages that are automatically generated and sent to them.
• Use of AI-based algorithms that can match the right talent to the right job profile.
• Use of AI-based chatbots to evaluate the candidate’s existing skills and their behaviour using natural language processing

What is the impact of AI technology on the future of hiring? Will they replace HR professionals? While AI solutions can have a profound impact on hiring, they cannot replace highly skilled HR professionals. On its own, AI tools cannot identify the best applicant for any job. Having said that, AI technology will save HR executives a lot of time in selected tasks such as candidate screening and interview scheduling.

Conclusion

In the face of the ongoing labour crisis in the U.K, companies must look at leveraging AI capabilities in improving their employee hiring and retention process. On its part, AI technology can play a decisive role in addressing the concerns posed by the labour shortage problem.

With its automated platform for objective hiring, X0PA has leveraged its expertise in AI technology to solve critical business problems related to talent hiring and management. Our AI recruiter tool is packed with features like inclusive and diverse hiring, robotic process automation (RPA), and candidate sourcing.

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