- Recruitment remains static with 55% of firms attempting to
hire staff in the last three months (compared with 54% in Q1)
- Hiring remains challenging despite some respite, with 73% of
firms reporting difficulties in Q2 (76% in Q1)
- Transport and logistics (80%) and construction (77%) sectors
were most likely to be facing recruitment problems
- 23% of businesses increased the size of their workforce in
Q2, compared with 20% in Q1
- Only a quarter of firms (25%) expect to increase the size of
their workforce over the next three months
The British Chambers of Commerce (BCC) Insight Unit's latest
Quarterly Recruitment Outlook (QRO) shows hiring remained largely
static in Q2 as firms dealt with the employer National Insurance
(NI) hike.
55% of responding firms attempted to recruit in the last three
months, broadly similar to the 54% in Q1. Of those firms trying
to hire staff, 73% said they experienced difficulties, a slightly
improved picture from the previous quarter (76%).
The research for Q2 was conducted
after the NI rise came into force, with the fieldwork conducted
between 12 May and 9 June. Over 4,500 businesses across the UK
(93% of whom are SMEs) responded
online.
The hiring landscape varies for
different sectors, with recruitment difficulties in transport and
logistics companies remaining the highest at 80% (compared with
82% in Q1) followed by construction and engineering business at
77% (83% in Q1).
Most firms didn't increase the size of
their workforce in Q2, with 60% saying staffing levels remained
the same. However, 23% did increase their staff numbers, up
slightly from 20% in Q1. Looking forward, firms are less
optimistic – with only a quarter (25%) expecting to boost their
workforce over the next three months, compared with 27% in
Q1.
Labour costs remain the biggest cost
pressure for businesses, cited by 73% of respondents, the same as
Q1. The issue is most significant for transport and logistics
(88%) and the hospitality sector (83%). Faced with those rising
costs, training investment remains relatively static, with 23% of
firms saying they increased investment in Q2, compared with 22%
in Q1. Most businesses (59%) didn't spend more on training in the
last three months.
What business
say:
"The position remains the same,
attempting to cover the vastly increased wage bill due to NIC
rises, as well as other cost increases, without the ability to
pass on to the customer, which has directly impacted recruitment
and growth plans." Medium professional services in
Liverpool
"The Labour government say they are
helping working people but forget that those working people need
to be working somewhere, and businesses are being hit with
increasing costs that will affect recruitment decisions."
Micro manufacturing firm in
East Midlands
"Increase in Employer's NI was not
favourable and has reduced training for staff and recruitment of
new staff." Small
public sector firm in
Suffolk
"Wage costs are a real danger to
small businesses. We have limited resources and can only pay out
what we have in the bank. Wage costs will be our main area where
we will need to reduce outgoings by cutting staff numbers/
hours." Small
hospitality firm in Dorset
Jane Gratton, Deputy Director
of Public Policy, at the British Chambers of Commerce
said:
“While it is still early days, firms
are beginning to sound the alarm on the impact of NICs and other
employment costs. There could a big shock coming further down the
line.
“Increased labour costs and persistent
skills shortages are making recruitment a significant challenge
for SMEs.
“Firms tell us they are having to
adjust budgets, especially for workforce growth and people
development. Whether that is recruiting fewer staff,
not replacing staff who are leaving, or scaling back training
budgets - there is no doubt that higher employer costs are having
an impact.
“At the same time, growth and
productivity is being stymied by persistent skills shortages,
particularly in sectors like transport, logistics and
construction.
“We need urgent action by policymakers
to tackle the long running skills crisis. That means a more
flexible and responsive training system, better support for
people facing barriers to work, and a firm commitment to no
further tax hikes on business.
“Our recently published
Blueprint for Growth provides clear policy proposals, which if implemented, can
help resolve the recruitment headache, and put businesses in pole
position for turbocharging the
economy.”
ENDS
Notes to editors:
- The Q2 results are based on responses from 4,595
businesses online.
- Around 93% of respondents are SMEs (fewer than
250 employees), 74% are in the service sector, 26% in the
manufacturing sector and around 44% are exporters.
- The QRO is produced by the BCC's award-winning
Insights Unit and the Chamber of Commerce Network.
