Hiring difficulties easing but concerns persist, survey finds

Number of firms having trouble recruiting down but still in clear majority

The proportion of companies struggling to recruit staff has dropped to its lowest level in three years but remains a clear majority, according to a survey of more than 4,600 UK businesses.

The results of the Quarterly Recruitment Outlook survey by the British Chambers of Commerce Insights Unit show that 66 per cent of responding firms are reporting problems finding staff – the first time this proportion has been below 70 per cent since the economy’s post-pandemic reopening in 2021.

Responding to the findings, British Chambers of Commerce Deputy Director Public Policy Jane Gratton said: “It’s welcome that the recruitment picture is improving and the percentage of firms reporting difficulties is at its lowest level for three years. This comes as other indicators show the labour market is cooling.

“However, with 66 per cent of firms still facing hiring challenges, the problems remain significant. Too many employers are struggling to find people with the skills they need to fill job vacancies. That’s damaging business opportunities and growth.

“The growing number of people not looking for work, or out of action because of long-term health issues, is exacerbating the skills problem. More needs to be done to tackle the issues behind this worrying trend and help people back into the workforce.

“We need a long-term industrial strategy, underpinned by better skills planning and more investment in training. That needs to happen nationally, locally and in every business. We need to support everyone who wants to work to achieve their potential. Doing that will help tackle skills shortages – improving growth and opportunities in local economies across the UK.”

Companies in production and manufacturing have been most likely to report difficulties recruiting, with 70 per cent of firms in that sector saying they had struggled to get skilled manual or technical staff. The equivalent figure in the final quarter of 2023 was 77 per cent.

In the construction and logistics sectors, 69 per cent of companies reported recruitment difficulties, while in hospitality it was 64 per cent.

As businesses continue to face unpredictable economic conditions, the majority are struggling to increase investment in workplace training. For the third quarter in succession, just over a quarter of businesses (26 per cent) reported an increase in staff training investment, with 12 per cent reporting a drop, compared to 14 per cent in the last quarter of 2023.

The growing number of people not looking for work, or out of action because of long-term health issues, is exacerbating the skills problem. More needs to be done to tackle the issues behind this worrying trend and help people back into the workforce.