- Just over half of businesses (54%) have attempted to hire staff in the last three months (compared with 55% in Q2)
- Most continue to face recruitment challenges, with 75% of employers reporting difficulties (73% in Q2)
- Recruitment difficulties in the construction sector spiked in Q3, with 85% of businesses reporting challenges (77% in Q2)
- Less than a quarter (22%) of businesses increased the size of their workforce in Q3, compared with 23% in Q2
- A similar proportion (25%) expect to increase the size of their workforce in the next three months
The British Chambers of Commerce (BCC) Insight Unit’s latest Quarterly Recruitment Outlook (QRO) shows that difficulties in finding staff persist despite rising unemployment nationally.
Just over half of businesses surveyed (54%) said they had attempted to recruit in the last three months. Of those trying to hire staff, 75% said they experienced difficulties, up slightly from the previous quarter (73%).
The research for Q3 was carried out between 18th August and 15th September, with more than 4,600 businesses across the UK (91% of which are SMEs) responding.
The hiring landscape continues to show wide variations across different sectors, with 85% of businesses in construction reporting recruitment difficulties. Other services was the next highest at 78%, while transport, hospitality and professional services were all at 74%.
Most businesses did not increase the size of their workforce in Q3, with 61% saying staffing levels remained the same. Less than a quarter (22%) did increase staff numbers, down slightly from 23% in Q2. Looking forward, most do not plan to hire extra staff, with 63% expecting their workforce to remain the same size. Meanwhile 12% expect to lose staff with 25% expecting to increase.
Labour costs remain the biggest cost pressure for businesses, cited by 72% of respondents. But again, there are big sectoral variations with that pressure highest in hospitality (80%) and lowest in retail (66%).
Faced with those rising costs, training investment remains relatively static, with 24% of businesses saying they increased investment in Q3, compared with 23% in Q2. Most (57%) did not spend any more on training in the last three months, while 19% reduced investment, similar to Q2.
Suzanne Caldwell, Managing Director, Cumbria Chamber of Commerce said:
“Employers are battling against sky-high employment costs and widespread skills shortages. The stark reality for businesses trying to recruit is that it’s still far harder than it should be. Unless more is done to boost access to skills, contain employment costs and get more people working, economic growth will remain stunted.
“On top of the challenges of Employers’ National Insurance, earnings growth year on year in Cumbria continues to be above the UK average, at 6.2% compared to 5.5%.
“The skills crisis also has far-reaching implications for government policy. While Ministers have pledged to get the nation building again, with recruitment difficulties in construction spiking to 85%, delays to getting vital infrastructure in place are inevitable.
“And with 72% of businesses saying costs are putting pressure on them to raise prices, the spectre of higher inflation continues to loom.
“The situation isn’t improving, and there is a growing urgency to find solutions. The new technical excellence colleges will help increase the supply of some vital skills. But much more needs to be done and the coming budget presents a golden opportunity to unlock potential through targeted investment and incentives.
“There’s a huge talent pool in the UK that remains untapped. Nationally three million people are missing from the workplace due to long-term sickness.
“The government should use the tax system to help people stay in – or quickly return to – employment when they experience ill health. Tax breaks for health services that businesses provide to their workforce are an obvious solution, to protect people’s livelihoods and keep skills in the workforce. And for those struggling to get into work, we need a wage subsidy scheme, similar to Kickstart, to unlock employment opportunities for young people with long-term health conditions.”
