The British Chambers of Commerce (BCC’s) Quarterly Recruitment Outlook shows less than a quarter (23%) of surveyed businesses are planning to increase the size of their workforce in the next three months, down slightly from 25% in the Q3 survey. Meanwhile 63% expect their staffing levels to remain the same, 14% are expecting to reduce their workforce.
The research shows recruitment pressures eased at the end of last year. Of those businesses who attempted to recruit in Q4, 70% said they experienced difficulties, compared with 75% in the previous quarter.
Just over half of businesses (52%) attempted to hire staff in the last three months (compared with 54% in Q3).
Faced with rising costs, more than fifth (22%) of businesses have cut staff training, with 57% saying workplace development investment has stayed the same.
The research for Q4 was carried out between 10th November and 8th December, with more than 4,600 businesses across the UK (91% of which are SMEs) responding.
The hiring picture is slightly different across sectors. The construction sector is the most vulnerable to recruitment difficulties, with 78% of businesses reporting problems (85% in Q3). 75% of manufacturing firms said they experienced hiring difficulties in Q4. Meanwhile, in the retail sector the figure was 63% of businesses.
Only a fifth (21%) of businesses increased the size of their workforce in Q4, with half (62%) saying their staffing levels remained the same. 17% said they’d cut the size of their workforce.
Labour costs remain the biggest cost pressure for businesses, cited by 72%, the same level as Q3. But again, there are big sectoral variations, with that pressure highest in hospitality (82%) and lowest in retail (66%).
Alongside this, a separate piece of research for Cumbria Local Skills Improvement Plan, carried out by Cumbria Chamber of Commerce in late 2025, indicates 68% of Cumbrian businesses are experiencing recruitment difficulties.
The main reasons for this are highlighted as:
- Applicants lack the required skills 61%
- Insufficient applicants 50%
- Attitude/motivation/personality of applicants 42%
- Lack of appropriate qualifications 37%
- Lack of work experience 31%
- Remote location/poor public transport 30%
- Lack of interest in the type of job 27%
- Too much competition from other businesses 22%
67% of businesses had been trying to recruit to one or more full-time posts, 60% to part-time and 34% to apprenticeships. 16% didn’t need to recruit.
57% of businesses have current vacancies. 29% have 5 or more vacancies, while 32% have at least one.
Vacancies are leading to a range of issues, the key ones being:
- Difficulty meeting customer needs 49%
- Difficulty meeting quality standards 41%
- Increased operating costs 35%
- Need to outsource work 26%
- Difficulty introducing new working practices 21%
- Need to withdraw particular products/services 20%
The skills causing difficulties recruiting are primarily:
- Job specific 64%
- Ability to manage own time/prioritise tasks 33%
- Leadership and management 31%
- Managing own feelings/handling others 24%
Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce said:
“As more firms struggle under the weight of rising cost pressures, we are beginning to see an adverse impact on the jobs market.
“Fewer businesses are taking on new staff, while others are having to let staff go. It’s reflected nationally in the rise in unemployment, particularly for young people.
“Unsustainable cost increases mean firms also have less budget to invest in training. Our survey shows that more than a fifth have had to cut their training budget, at a time when the economy is being held back by pervasive skills shortages.
“High taxes and rising wage bills present huge barriers to investment and growth. On top of this, the cost burden of the Employment Rights Act – which the government continues to underestimate – will create further problems.
“To stimulate the economy, the government must now look for every opportunity to minimise business costs, support employers and provide a compelling blueprint for economic growth.”
Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce, said:
“Our survey for the Local Skills Improvement Plan (LSIP) indicates that the numbers facing recruitment difficulties broadly reflect the UK picture.
“We know too from discussions with businesses that recruitment difficulties continue to be prevalent in the county.
“As highlighted in the BCC survey too, the picture does vary across sectors, and some localities within the county have particular issues.
“We’re continuing to work with other stakeholders locally and nationally on ways to address these challenges.
“Given the major skills elements in this problem, it will continue to be a key element of LSIP priorities and actions. We’re also working with a range of others through the LSIP and initiatives such as Team Barrow, the Work & Health Board, Enterprising Cumbria and Connect to Work.”
