Small cause for optimism around recruitment challenges

Fewer British companies are facing recruitment issues, according to the latest report from the British Chambers of Commerce. But while the figure has dropped from its 2022 Q4 high, there are still almost three-quarters of companies with difficulties hiring the right people, with the hospitality sector the worst affected.

John Woodruffe, the Chamber’s project manager for the Herts Local Skills Improvement Plan (LSIP), said: “It is clearly a positive sign that fewer businesses are reporting problems when it comes to finding new people. But the figure is still too high. Through the county’s LSIP, we are looking to address some of the common problems businesses are facing when recruiting, especially around skills shortages.”

The British Chambers of Commerce’s Quarterly Recruitment Outlook is the largest private sector survey in the UK comprising nearly 5,000 firms across the country encompassing all sectors and sizes.

The third quarter results show a 9 per cent fall from the historical high of 82 per cent in Q4 2022. The figure has now fallen in each quarter of 2023.

In Q3, 61 per cent of companies had attempted to recruit with 66 per cent reporting that labour costs are a financial pressure.

Recruitment difficulties are being felt across the economy, but the hospitality sector continues to suffer the most with 79 per cent reporting problems. This is closely followed by construction and manufacturing on 78 per cent (down from 86 per cent and 81 per cent respectively in Q2). In the retail sector, 72 per cent of retail businesses said they had experienced recruitment issues.

Of the hospitality firms reporting problems, 58 per cent faced difficulties in finding semi/unskilled workers, and 41 per cent skilled manual/technical staff. In the construction and engineering sector, 78 per cent faced problems getting skilled manual/technical workers, but just 21 per cent for semi/unskilled.

As businesses continue to face a series of economic headwinds, most are still reporting no increase to investment in workplace training. Just over a quarter of firms reported an increase in staff training (27 per cent, the same as Q2), with 13 per cent reporting a small drop (14 per cent in Q2).

Labour costs are cited by most firms as a source of cost pressure with 59% of firms saying they are still concerned about energy costs.

John said: “Overall employers are offering more flexible working conditions wherever possible but are still struggling to hire and retain the right staff to help get them through these challenging economic times. The picture in the hospitality and manufacturing sectors is particularly worrying.

“These are certainly areas we will be looking at through the LSIP project.”