The latest Quarterly Recruitment Outlook (QRO), a survey of more than 4,700 UK firms of all sectors and sizes, by the British Chambers of Commerce (BCC) Insights Unit, reveals hiring problems have increased across all sectors.
The second quarter results for 2024 show that 59% of respondents said they had attempted to recruit in the last three months, slightly down from 62% in Q1. 80% of hospitality businesses attempted to recruit, whereas the figure for the retail sector was just 44%.
Of the firms who tried to hire in Q2, 74% reported recruitment difficulties, compared with 66% in the first three months of the year.
Construction and engineering firms are bearing the brunt of staffing issues, with 82% reporting recruitment problems in Q2, up from 69% in Q1. 79% of firms in the transport and logistics sector said they had faced difficulties (up from 69% in Q1). Meanwhile, in production and manufacturing, 77% of businesses trying to recruit faced problems, up from 70% in the previous quarter.
Almost three quarters of firms (71%) in the hospitality sector said they had faced recruitment problems in Q2 (Q1 64%), while 70% of retailers faced difficulties, up from 61% in Q1.
Although most businesses are still struggling to increase investment in workplace training, Q2 did see a slight increase. 28% of firms reported an increase in staff training investment, up from 26% in Q1, with 11% reporting a drop. 61% reported no change in their investment plans for training over the past three months.
Labour costs continue to be the main external pressure on businesses in Q2, with 67% of firms saying they could be forced to put up prices as a result. Concerns around labour costs are highest in hospitality (77%), followed by construction and engineering (76%), and production and manufacturing (72%).
Responding to the findings, Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said: “It’s alarming that recruitment difficulties have increased in recent months across all sectors. The very sharp rise in the construction industry is particularly worrying.
“People shortages and labour costs are ramping up pressure on firms and holding back growth. We need to prioritise help for people to get back into the labour market and remove the barriers to business investment in training.
“Better planning for skills is crucial. The new government must work at pace to outline a long-term national skills strategy, working closely with the devolved administrations.
“Building on Local Skills Improvement Plans will help develop strong partnerships between employers, training providers and others – to ensure people get the skills and support they need.”
