According to recent research conducted by Visual Components, 39% of manufacturing decision-makers in the UK have identified revenue losses as a significant long-term effect of the ongoing labour shortage. The study highlights that the scarcity of skilled workers is having a profound impact on the industry.
The research further reveals that in the short term, increased labour costs are the most immediate concern for 57% of organizations. This is compounded by project delays (38%), declines in profits or revenue (30%), and difficulties in meeting customer demand and production targets (25%).
As companies struggle to secure talent, they are compelled to allocate more resources from their already constrained budgets to offer competitive salaries. A staggering 95% of UK businesses have reported increasing their spending on higher wages to attract sought-after talent.
The need to boost salaries is not the only financial burden; the overall wage bill has also been inflated by the necessity of overtime work. Additionally, ongoing economic pressures such as rising costs and inflation (55%) are further straining budgets.
Mikko Urho, CEO of Visual Components, commented, “The labour shortage is a major driver of escalating costs for UK manufacturers. However, simulation software presents a viable solution to this challenge. By upskilling existing staff, companies can reduce their dependence on costly external skilled workers and better manage customer demands and revenue targets in a persistently tough economic environment.”