Quarterly Recruitment Outlook: Fewer Firms Recruiting
On Tuesday, we published our latest Quarterly Recruitment Outlook which showed fewer firms are hiring, dropping to their lowest levels since the depths of the pandemic.
Among the main points of the outlook:
The proportion of firms attempting to recruit new workers falls to its lowest level in three years at 56%.
There are significant sectoral differences with transport (73%), hospitality (70%) and construction (67%) most likely to be attempting to recruit.
Of those attempting to recruit 76% faced difficulties, up from 74% last quarter.
Construction (85%), manufacturing (80%) and hospitality (76%) firms are the most likely to be facing recruitment problems.
The British Chamber of Commerce (BCC) Insight Unit’s latest Quarterly Recruitment Outlook (QRO) reveals hiring intentions have dropped to their lowest levels since the depths of the pandemic.
Responding to the findings, our Deputy Director Public Policy Jane Gratton, told the media:
“The percentage of firms holding back on hiring has been rising since the start of 2024. At the same time, firms trying to fill job vacancies are still struggling to find the skills they need.
“There’s considerable uncertainty for business right now. They are concerned about potential tax rises heading their way in the budget. They’re also worried that changes to employment rights might increase costs and complexity.
“The government needs to drive growth and ensure there’s no drop in momentum. The upcoming budget is a golden opportunity to give firms reason to be optimistic.
“There are two key issues the Chancellor must address to boost employment. First, is to help the long-term sick back into work and, second is to plug the gaps in local training provision.
“We want a reduction in the employer and employee tax on workplace health services so more people can get tailored support more quickly. And we need longer-term funding for Local Skills Improvement Plans, to help more businesses provide more training for more people.”
Click here to read the press release.
Raising National Insurance Contributions Would Place An Additional Strain on Businesses
Ahead of the Budget later in the month, we saw more speculation last week about possible changes which could be announced by the Chancellor – this time an increase in employers national insurance contributions. Responding our Director of Policy Alex Veitch told journalists:
“The Chancellor is facing a tight fiscal position and will have to make difficult decisions in the forthcoming Budget. But raising Employer National Insurance Contributions (Employer NICs) would place an additional strain on businesses. Firms are run by working people, nearly all UK companies are small, with many family-owned, and they are the anchors in our local economies. Raising employer NICs, in an already stretched economy, will simply hobble growth and lead to businesses having less money to invest in their staff. Our research shows that taxation is the top concern for business. Any tax rises must be countered by steps to incentivise investment that smaller firms can access with minimal red tape. This could include a workable R&D Tax Credit scheme and retaining the current level of the Annual
Investment Allowance.
Click here to read more.
Inflation Eases More Than Expected
On Wednesday, UK inflation fell unexpectedly to 1.7% in the year to September, the lowest rate in three-and-a-half years. Here’s the reaction from our Head of Research David Bharier.
“Today’s data showing CPI has eased further than expected to 1.7% continues the move away from a prolonged period of high inflation. Coupled with an easing to average earnings growth, businesses will be looking forward to a clearer path for further interest rate cuts.
“Our research has shown that a steadily declining number of businesses are concerned about inflation. In our recent Quarterly Economic Survey, 46% of businesses cited inflation as concern, down from the all-time high of 84% seen in 2022.
Taxation has instead emerged as the top issue of concern.
“However, major uncertainties remain. With escalations in the Middle East conflict, oil and energy prices are likely to be impacted. Our latest Forecast expects inflation to tick higher towards the end of the year at 2.6%. Core inflation also remains quite stubborn and owner occupiers’ housing costs continue to rise.
“This month’s Budget is a critical juncture. Businesses will need to see action on implementing an effective industrial strategy, solving the investment puzzle and supporting global trade, particularly with the EU.”
Click here to read the full press release.
