Key facts
- 73% of UK firms attempting to hire reported difficulties in the first quarter.
- Only 23% of firms expect to increase their workforce in the coming months.
- 66% of businesses plan to maintain current staffing levels.
- 11% of firms intend to reduce their workforce.
- 60% of businesses reported unchanged investment in workforce development.
- Labour costs remain the biggest cost pressure for businesses, cited by 72%.
Rising hiring costs and difficulties in recruiting talent are hindering the growth of Britain's fastest-growing companies, according to recent data from the British Chambers of Commerce (BCC). The BCC's Quarterly Recruitment Outlook reveals that less than a quarter of firms (23%) anticipate increasing their workforce in the coming months, while a significant majority (66%) plan to maintain their current staffing levels. Furthermore, 11% of businesses are considering staff reductions.
The research highlights persistent recruitment challenges, with 73% of firms actively seeking new staff reporting difficulties. This situation is exacerbated by increasing labour costs, which are cited by 72% of businesses as their primary cost pressure. For instance, a micro professional services firm in London noted that hiring an apprentice had become too expensive, especially when combined with other business pressures that have reduced profits.
Investment in staff training also remains a concern. Most businesses (60% in the latest survey) reported that their investment in workforce development has remained unchanged over the past three months, with only 20% increasing training investment. The BCC has published a policy briefing urging policymakers to implement measures such as a skills tax credit, reduce administrative burdens for SMEs on staff training, and help firms measure the return on training investment. The briefing emphasizes the need for a culture of lifelong learning to address skills shortages and boost productivity.