- Government must fix people problem to ease inflation and take pressure off interest rate rises
- 79% of businesses surveyed (92% of whom are SMEs) attempting to recruit have faced challenges, with hospitality and construction firms the most likely to report difficulties
- Three in five (60%) businesses attempted to recruit in the quarter
The latest Quarterly Recruitment Outlook (QRO), a survey of 4,800 UK firms of all sectors and sizes by the British Chambers of Commerce (BCC) reveals there is still no easing in the record high difficulties in finding staff. The second quarter results for 2023 show that the percentage of firms facing recruitment difficulties has fallen just three percentage points from the historical high of 82% in Q4 2022. This has now remained above 75% for the last two years. Attempted recruitment in Q1 was virtually unchanged from the previous quarter, with 60% of those surveyed looking to find staff (59% in Q1 2023). While recruitment difficulties are being experienced across the economy, the construction & engineering, and hospitality sectors were the most likely to report problems with 86% of firms reporting difficulties (up from 81% and 83% respectively in Q1). This is closely followed by manufacturing on 81% (83% Q1) and then professional services on 77% (79% Q1). Of the firms in the construction & engineering sector facing recruitment difficulties, 76% faced difficulties in finding skilled manual/technical workers. However, for hospitality businesses that struggled to recruit, 69% faced difficulties in finding semi/unskilled workers. Investment in training remains stubbornly low with just over a quarter of firms (27%) reporting an increase in their training investment plans over the last three months (the same as Q1), while 14% report a drop (also the same). In terms of cost pressures, the data show that the main factor for increasing prices is now coming from wages rather than utility bills or raw materials. With concern around utility costs dropping, 63% report these as an issue (74% in Q3 2022), the number of firms reporting labour costs as a source of pressure has risen to 68% (67% in Q1) and is now the lead cost pressure. Although, overall, the percentage of firms expecting their prices to rise fell below 50% for the first time since Q3 in 2021. Responding to the findings, Jack Weaver, Chief Operating Officer at Norfolk Chambers of Commerce said: “The tight labour market continues to push up wage costs, fuelling inflation, and creating huge difficulties for businesses looking to recruit. In Norfolk, our already squeezed businesses also face the issue of a shrinking workforce as the working age population in our county declines in a way not seen in much of the rest of the country. In our focus groups and engagement events with Norfolk businesses, recruitment difficulties are consistently cited by as a major barrier to growth, meaning firms cannot fulfil order books and are turning down new work. Added to this, the national picture shows acute issues in hospitality, construction, health and social care and other sectors heavily reliant on labour from overseas. These are all sectors on which Norfolk’s economy is heavily dependent, so we need to see consistent and pragmatic immigration policy from government and the opposition to give our businesses confidence in the future.
