The Causes, the Facts and the Potential Solutions

Monday, April 25, 2022

The HGV driver shortage has been a widely reported issue in recent months, but this shortage has long existed. Brexit and COVID-19 have exacerbated a pre-existing retention issue. We consider the causes of the shortage and look at the various potential solutions.

Why is there an HGV Driver Shortage?

The Road Haulage Association has reported a shortage of some 100,000 HGV drivers (though recent estimates place this figure closer to 70,000). The two factors usually cited as the root causes of the HGV driver shortage are Brexit and COVID-19.

However, the reality is likely to be more complicated and more nuanced than the headlines would lead us to believe.

Some 70,000 HGV drivers have left their role since the pandemic began, 12,500 of which were EU nationals. This indicates a shortage resulting from the effects of a pandemic, lockdown and Brexit. However, the shortage of HGV drivers in the UK has been chronic, existing long before COVID-19 and Brexit. Prior to 2020, there was a shortage of 60,000 HGV drivers.

This pre-2020 shortage was not a result of a failure to recruit or an ageing workforce, as between 2015 and 2019 there were 25,500 newly trained drivers each year which largely offset the retirement rate of 10,000 per year. 

Whilst there is no doubt that Brexit and COVID-19 have played their part, a consistent issue facing the sector is retention. Most HGV drivers leave the workforce before reaching 45 years old. By 2020, of those under 45 years old who held HGV licences, only 19% were professional drivers and only 32% retained their licences and qualifications. The rest left the industry altogether. A significant number of over-45s also leave the workforce some time before retirement; 40,000 over-45s left in the first quarter of 2021.

Before 2020 the supply of newly trained drivers could be maintained and was able to meet national demand, allowing businesses in the sector to maintain low wages and less favourable terms of working for drivers. Wages for HGV lorry drivers have remained stagnant for over 15 years. Many drivers work long and antisocial hours – poor work/life balance was often cited as a reason for leaving the workforce.

Now, the supply of newly trained drivers is reduced (though not drastically) and the national demand has risen significantly (especially since the second lockdown). However, as working conditions and wages did not improve to meet this demand many drivers left the workforce.

The primary cause of the most recent shortage appears to be a chronic failure to retain HGV drivers. The pandemic and Brexit have exacerbated this issue causing the effects of the driver shortage to be felt more acutely which has led to the current media interest and government interventions.

What is the Solution?

Ultimately, there is no single solution. A wide range of short-term and long-term efforts are required. Here are a few that are being suggested or have been implemented:

Introducing Visas – the government introduced visas for HGV drivers of fuel and food goods in order to provide a short-term solution. But these visas were only available to 5,000 individuals. This far from covers the 12,500 EU nationals that left their roles since 2020, or the 52,500 British drivers who have also departed the workforce. Furthermore, even if the visa was available to more drivers, as there are HGV driver shortages across mainland Europe (albeit to a lesser extent that in the UK) a short-term visa to work in the UK may not attract enough drivers to apply. Nonetheless, this may act as a stopgap while new drivers are trained or as benefits are improved to entice drivers who have switched careers.

Utilising the Military – the drafting of the military personnel as HGV drivers is not expected to be a long-term solution.

Improved Wages – some commentators advocate for the industry to self-correct in a free market. In order to meet the increased demand for drivers, haulage companies contracting or employing HGV drivers will have to increase wages (especially for antisocial hours), improve work patterns and shifts to provide better work-life balance, and provide better facilities. Many in the industry have already increased wages (some reportedly by 40%) but recruitment has still faltered as work-life balance is still a source of complaint – seemingly, more holistic changes are required.

IR35 – the changes to IR35 last April led to a lot of HGV drivers leaving the industry, certainly the contingent labour market.  Drivers enjoyed the professional status of being self-employed and the lower tax burden that self-employment created.  The IR35 changes led to many end users of contingent drivers assessing their assignments as being inside IR35 which meant that the drivers were either pushed into a PAYE solution and lost their self-employed status or remained self-employed but lost the tax advantage of that status.  This led to a lot of drivers that worked for employment businesses choosing to walk away from the industry.  Those employment businesses that have embraced this issue and looked at how they can maintain self-employed status, outside of IR35 have reported some success in increasing the number of drivers on their books.

Reduced Cost of Training – a further solution is to reduce or subsidise the cost of training. Currently, training to become an HGV driver can cost thousands of pounds which can deter interested individuals. The government introduced a scheme offering 5,000 places on training courses, new ‘skills bootcamps’, and local funding. While this may help to address the immediate shortage, the chronic issue in the sector has never been the supply of new drivers but retaining them. Some commentators have suggested that to lower the barrier to become an HGV driver, the government should permanently subsidise training costs and work with insurance providers to provide insurance cover at better rates for inexperienced drivers.

Better Working Hours – many drivers have called for businesses to provide more favourable terms in regard to shift patterns, working hours, and breaks to facilitate better work-life balance and working conditions. Where businesses fail to do this, the government may amend the Working Time Directive and Tachograph Hours rules to give drivers longer or more frequent breaks and limit daily driving hours.

Other proposed long-term solutions include wider investments into roadside facilities, improved parking (including overnight parking), and better service stations and ‘truck stops’ with additional facilities.

So long as the UK economy remains reliant on the road haulage sector, a fundamental shift will be needed to address these issues. There is no single easy fix; instead, agencies and employers alike will need to innovate with a combination of the solutions described above to manage the shortage.

If you are interested in finding out more or discussing how the HGV driver shortage affects you, please contact a member of the Employment or Immigration team.

 

Source rec.uk.com