QUARTERLY RECRUITMENT OUTLOOK : HIRING HEADACHES AND LABOUR COSTS LOOM LARGE
QUARTERLY RECRUITMENT OUTLOOK : HIRING HEADACHES AND LABOUR COSTS LOOM LARGE
The latest Quarterly Recruitment Outlook ( QRO ), a survey of nearly 5,000 UK firms of all sectors and sizes , by the British Chambers of Commerce ( BCC ) Insights Unit , reveals that the labour market remains tight for most firms .
• Over three quarters ( 76 %) of firms attempting to recruit faced difficulties
• Firms in the hospitality sector remain the most likely to report challenges in hiring staff ( 82 %)
• 68 % of companies say labour costs are a financial pressure
• 59 % of companies attempted to recruit in the quarter
The fourth quarter results for 2023 , show a slight rise in the percentage of companies facing hiring difficulties , from 73 % in Q3 to 76 % in Q4 . This figure is 6 percentage points down from the historical high of 82 % in Q4 2022 , but it has remained at or above 70 % since the economy reopened post-pandemic ( Q2 2021 ).
Attempted recruitment in Q4 was virtually unchanged from the previous quarter , with 59 % of responding firms looking to find staff ( 61 % in Q3 ).
The hospitality sector continues to suffer disproportionately from the recruitment difficulties in the economy , with 82 % of firms reporting hiring challenges in Q4 ( compared with 79 % in Q3 ). This is closely followed by the transport and logistics sector where 81 % of businesses attempting to recruit , reported difficulties in finding staff . Meanwhile 79 % of construction firms , 77 % of manufacturing companies and 66 % of retailers , said they had experienced recruitment issues .
Of the hospitality firms reporting problems , 62 % faced difficulties in finding semi / unskilled workers , 41 % skilled manual / technical staff .
As firms continue to navigate a series of economic pressures , many are struggling to increase investment in workplace training . For the second quarter in succession , just over a quarter of firms reported an increase in investment plans for staff training ( 26 % compared to 27 % in Q3 ) with 14 % reporting a drop ( 13 % in Q3 )
Labour costs are cited by most firms as a source of cost pressure , with 68 % citing this ( compared to 66 % in Q3 ). 55 % of firms say they ’ re concerned about energy costs .
Responding to the findings , Jane Gratton , Deputy Director Public Policy at the BCC said : “ Our data shows the recruitment crisis continues to loom large for many businesses across the UK .
“ Too many firms are still struggling to hire and retain staff . The situation in the hospitality sector is especially concerning . At the start of an election year , and with a budget just weeks away , it ’ s vital that politicians start outlining how we can plug these gaps and support more people into work .
“ The Chancellor announced several welcome measures on apprenticeships in the Autumn Statement , but more action is needed . For example , increasing flexibility in the apprenticeship levy would help more people get the workplace training they need .
“ And we need to ensure that local training provision meets the needs of employers and learners . Local Skills Improvement Plans ( LSIPs ), many of them led by local Chambers , are now shifting the dial on this by planning for skills needs , now and in the years ahead . But this transformation won ’ t happen overnight , and LSIPs need long-term funding and commitment from politicians .
“ We ’ ll be looking closely at tomorrow ’ s labour market statistics from the ONS . While the number of vacancies has continued to decline in recent months , the prospects going forward remain challenging . Our latest Quarterly Economic Forecast predicts unemployment is expected to stay higher for longer , hitting 4.8 % by the end of 2025
“ Businesses urgently need to see a long-term strategy on skills and training from politicians . One that can properly resolve the ongoing recruitment crisis and ultimately boost economic growth .”
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