UK companies warn about impact of Omicron staff shortages

UK retail, manufacturing, travel and healthcare companies have warned about staff shortages as rising numbers of workers call in sick with Covid-19 as the Omicron coronavirus variant sweeps the country.

The UK Health Security Agency estimated that on Monday about 200,000 new Omicron infections occurred, which could lead to more than one million new cases by the weekend if the trend continues. Professor Chris Whitty, England’s chief medical officer, told ministers on Tuesday that the sharp rise in cases was likely to lead to mass staff absences.

Rising numbers of sick staff have already sparked worries in labour-intensive industries, with some executives fearing a return to the sort of supply chain disruption seen during the summer “pingdemic” when people were forced to isolate after contact with Covid.

Gary Grant, chief executive of the Entertainer, the toy retailer, said: “We have more Covid positive cases in the company now than at any time since the start of the pandemic.”

Grant said the situation was exacerbated by staff being told to test after coming into contact with Covid.

Double vaccinated contacts of Omicron cases in England no longer have to isolate for 10 days but need to take a lateral flow test each day — a challenge given the widely reported testing shortages.

Royal Mail said that worker absences this Christmas were almost double 2018 levels, which was causing issues in some areas of the country, while illness among train crews has begun to have an impact on the rail network.

Another retail executive said that staff were being more cautious about coming to work before Christmas, saying that the “fear factor” had risen as “people don’t want to be caught out and get Covid”. He added that many EU nationals planning to return home for Christmas had already left.

Worker issues were raised with Kwasi Kwarteng, business secretary, on Monday at a meeting with business groups, according to people familiar with the discussion, and again between retail bosses and business minister Paul Scully on Tuesday evening.

Scully acknowledged concerns over staff shortages but sought to reassure people on the call that the new daily testing regime would address “pingdemic” issues.

Scully was also pressed on what the government was planning next, but downplayed the prospect of a lockdown. He argued that the government’s policy would create “breathing space” to assess the impact of the new variant.

One retail executive said that staff shortages were not as bad as during the summer “pingdemic”, but that rising numbers were causing concern.

Other retailers said that there was not a universal rise in absence rates, although these were “ticking up” in certain places.

Neil Bowker, chair of the United Kingdom Warehousing Association, said that some warehouse operators were under pressure at a time of surging seasonal demand. “Seasonal handling requirements have increased and as experienced warehouse operatives isolate with the virus, the challenges are amplified,” he said.

Verity Davidge, director of policy at manufacturers’ group Make UK, said the rise in cases of the new variant was ringing “alarm bells for many manufacturers who, despite continuing to retain various safety measures, won’t be able to stop the spread alone and will be looking for support measures from government”.

She said the move away from self-isolation to daily testing would help but added that more had to be done “to protect potential staff shortages and the risk of production lines being halted once more”.

Make UK wants immediate statutory sick pay reinstated and extra efforts to ensure workplace and home testing is freely available.

Care homes were already suffering staff shortages due to the requirement for all employees to be vaccinated. Robert Kilgour, founder of the Renaissance Care chain in Scotland, said the latest wave of infections was adding to the pressure. “We are seeing increasing numbers of our staff off having tested positive and it is a huge worry for us just now making sure that we have enough staff to look after our vulnerable elderly residents,” he said.

There are signs that the spread of the virus is starting to affect healthcare. Matthew Taylor, chief executive of the NHS Confederation, which represents health organisations across the country, said: “Health leaders are telling us that they are experiencing some staff absences due to Covid.”

While the NHS was doing its best to keep services running, “leaders are very worried about what is coming, especially given the high demand from patients and the vital focus on the booster programme”, he added.

Business groups want a broader package of financial help for companies experiencing both operational disruption and evaporating demand after the government recommended that people work from home.

Tim Foster, founder of Yummy Pubs, said that his Somers Town Coffee House in Euston had been fully booked with more than 400 covers for Wednesday a month ago, but this had dropped to just 22. “Today, tomorrow and Friday would have been our busiest days of the year, we’ve lost 857 covers from the three days so far, with more to come,” he said. “London is crumbling away.”

Alasdair Murdoch, chief executive of Burger King UK, said the chain was not yet seeing a major impact from staff shortages due to the quarantine guidance but warned: “We are all going to run into absences soon because everything is coming over the hill very quickly.”

Additional reporting by Jonathan Eley, Harry Dempsey and Philip Georgiadis

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