QRO reveals that hiring difficulties are not easing

The latest Quarterly Recruitment Outlook (QRO), a survey of over 5,000 UK businesses conducted by the British Chambers of Commerce (BCC), has revealed that businesses are still facing record high difficulties in hiring new members of staff.

Results from the first quarter of 2023 show 81 per cent of UK business have reported difficulties in recruiting, a miniscule decrease from the record high of 83 per cent reported in the fourth quarter of 2022. There was only a small change in attempted recruitments too, the 59 per cent reported in Q1 2023 is only down two per cent from the 61 per cent in Q4 2022.

The most affected companies were firms in the hospitality and manufacturing sectors with 83 per cent of businesses in both sectors reporting recruitment difficulties. Following this are: the construction and engineering sectors (81 per cent); professional services (79 per cent); and finally the public, education, health sector (also 79 per cent). 

Types of recruitment pressure vary across sectors. 71 per cent of firms in the construction and engineering sectors struggled to find skilled manual/technical workers, whereas in the hospitality sector 64 per cent of businesses found it difficult to recruit semi/unskilled workers.

Investment in training remains stubbornly low in an environment of increasing cost pressures. 27 per cent of firms reported an increase in their training investment plans over the last three months (24 per cent Q4 2022), while 14 per cent report a drop. 

Overall, 67 per cent of businesses say labour costs are a source of inflationary pressure, with 66 per cent worried about energy costs. Concerns around labour costs are highest in manufacturing (76 per cent), construction and engineering, logistics, and hospitality all follow with 70 per cent.

Head of people policy at the BCC Jane Gratton said: ‘’People shortages are a massive issue and employers can see little sign of improvement. The high number of unfilled job vacancies is damaging businesses and the economy. Firms are struggling to fulfil order books and turning down new work.  

“While investment in training is part of the solution, it is being held back by rising overall cost pressures and a lack of time and resource at firms to mentor and support new recruits.   

“There is no quick fix and employers and the government need to work together to find solutions.  While firms can do more to make workplaces more flexible and jobs easier to access, the government must redouble its efforts to encourage and help people into work.  

“Support for parents and carers, older workers and those with health issues will be crucial.  At the same time, where there is evidence of urgent and critical skills shortages that are crippling business sectors, the government must adopt a sensible and pragmatic approach to immigration and ensure that the Shortage Occupations List reflects the reality on the ground. 

“The Chamber Network is rooted in its communities, representing businesses of all sizes across the UK, and these are the big issues they are telling us need addressing if we are to get the economy growing again.” 

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