Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said every sector was facing recruitment problems, leading to businesses having to take drastic measures.
It comes as three quarters of pub and restaurant bosses say they are increasing pay to attract staff, according to a CGA business confidence survey.
The survey of 200 senior executives from across the hospitality industry found that one in six jobs currently lies vacant, and 96 per cent of business leaders were seeing staffing shortages for some role.
Mr Sheehan said: "Almost every sector is having recruitment problems. Businesses can't find the right people and are having staff poached.
"Businesses are really busy because their staff are having to do more work due to not having enough people.
"I know of one business in Shropshire who desperately needs cleaners. They are paying more money and still can't get them.
"The Government needs to wake up to the needs of different sectors. Offering three-month visas to foreign workers is not enough. These are long-term issues.
"We need to free up border controls and allow migrant workers in where we need them."
The CGA business confidence survey showed that the shortage of staff was prompting bosses to step up efforts to attract and retain workers.
“We have offered a ridiculous salary to find a chef for the restaurant, but have still had no joy,” said Mark Smith, who owns Al Sorriso restaurant in Albrighton with his partner Luciana Palmieri.
“Staff from abroad desperately want to work, but it is impossible to bring them in due to Brexit, and, if you try agencies, it’s just too expensive unless you can give out lots of hours and on a regular basis.
“Front of house is also difficult, and you are definitely paying over the industry average to attract and even retain staff. This is a very difficult balancing for us to achieve, as we need to make it financially viable whilst not affecting the experience we are providing our customers.”
Karen Lee, of The Walnut restaurant in Wellington, said the business had seen a "massive loss" to personnel which had created major difficulties.
"Obviously we have had the pandemic and I'm sure Brexit has had a big influence as well as the larger chains relied a lot on European workers," she added.
"There are a huge number of enthusiastic teenagers who want to work for us, but the difficulty is getting those with existing skills like chefs, mixologists and those who are cellar trained.
"We are having to get people in and train them up to my standards and try and keep hold of them."
Arwyn Watkins, chairman of Welshpool-based Cambrian Training Company, a provider of apprenticeships to the hospitality industry in Wales, warned there is "no quick fix" to the recruitment crisis.
The company is currently advertising 120 job vacancies on its website from businesses it works with across Wales and he warned that the return of a 20 per cent VAT rate could be the breaking point for some hospitality businesses.
Cambrian Training Company also owns Chartists 1770 at the Trewythen, a restaurant with rooms in Llanidloes town centre.
“There is no workforce coming over the hill to rescue us,” said Mr Watkins, who is president of the Culinary Association of Wales. “Lack of people to fill the jobs is the biggest issue.
“Long-term, we have got to learn how to attract people into the hospitality industry, how to treat them when they in our businesses and how to value them.
“We also need to learn how to engage with our local communities because our workforce of the future is going to come from within our communities, not from outside.
“Its about time that those of us who either work in or enjoy the industry started valuing careers within it for our own children. Unfortunately, there are currently not enough people who consider hospitality as a rewarding career which is something we in the industry must change.”
In terms of a return to 20 per cent VAT, Mr Watkins added: “Businesses will have to pass the extra cost on to customers. Will that become the breaking point for occupancy rates going down, making the business financially unviable with less jobs, less tax for the Exchequer and more people unemployed?”
The CGA business confidence survey, which was conducted by the research firm with technology specialists Fourth, showed that the shortage of staff was prompting bosses to step up efforts to attract and retain workers.
Around 76 per cent of respondents said they had offered better pay as part of their retention strategies, while 75 per cent had stepped up levels of communication with staff in an attempt to increase retention levels.
Meanwhile, 18 per cent of leaders surveyed said they felt confident about their recruitment and retention over the next 12 months – a fall from 67 per cent who felt confident in the last business confidence survey three months ago.