Seven in ten businesses are still reporting recruitment difficulties, despite some easing of hiring conditions over recent months, according to the latest data from the British Chambers of Commerce (BCC).
The BCC’s Quarterly Recruitment Outlook shows 71% of firms attempting to hire in Q3 faced difficulties, compared with 73% in Q2. Almost a third (29%) reported no difficulties.
Ahead of next week’s Budget, the research also shows less than a quarter of businesses (23%) are planning to expand their workforce in the next three months.
The recruitment survey was carried out by the BCC Insights Unit and the UK wide Chamber network, with the fieldwork carried out between 18 August and 15 September. Over 4,300 businesses took part in the research, 92% were SMEs.
The construction sector was the sector most likely to have experienced hiring problems, with 79% of firms reporting difficulties, and 21% having no issues finding new staff. In comparison, 64% of retailers experienced recruitment challenges, 36% in that sector faced no problems.
With BCC research showing the cost stack for SMEs has risen by 70% over the last decade, investment in staff training remains low. Only a fifth of firms (20%) reported they’d increased training investment in Q3, while the majority (63%) said their spend on workforce development remained unchanged. 17% of firms reported cuts in staff training.
What business say:
“We’re finding it really hard to find staff who are qualified and skilled in what we need. This is impacting the business negatively.”
Micro public sector firm in Sheffield
“The recruitment issue is getting worse. Financing the first year of an apprenticeship would be a huge benefit.”
Small public sector firm in Scotland
“Labour costs keep rising. Recruitment and staff retention remain challenging, requiring ongoing investment in talent development.”
Manufacturer in the West Midlands
“New legislation relating to sick pay is already significantly increasing payroll costs” Hospitality firm in West Lancashire
Patrick Milnes, Head of People and Work Policy at the British Chambers of Commerce said:
“With the clock ticking to next week’s crucial Budget, our data shows the persistent recruitment headache for businesses across the UK.
“Soaring employment costs are holding back hiring, training and growth. Most firms are struggling to expand their workforce, and this week’s data showing vacancies falling again, shows the impact this is having on the wider economy.
“The Chancellor must use his statement next Wednesday to give firms much needed breathing space and remove hiring barriers.
“In particular, cutting employer National Insurance contributions for under-25s would lower the cost of taking on young people, help tackle youth unemployment and give businesses greater confidence to invest in skills.
“The Budget is an opportunity for government to end the cycle of rising costs, weak recruitment and underinvestment in the workforce.
“The Chancellor must ‘Back Business, Cut Costs and Deliver Growth’.”