A new survey by the British Chambers of Commerce (BCC) reveals firms are facing the highest level of recruitment difficulties on record. The data for the business group’s Quarterly Recruitment Outlook (QRO) for Q4 2022 was drawn from a survey of more than 5,600 businesses, 92% of whom were SMEs.

Attempted recruitment in Q4 remained virtually unchanged from the previous quarter, with 61% of firms looking to find staff (62% in Q3 2022). Overall, over eight in ten firms (82%) attempting to recruit reported recruitment difficulties, up from 76% in Q3.

While the problem is persistent across all sectors, firms in the hospitality sector are most likely to face challenges when recruiting, with 87% reporting difficulties. This is closely followed by the manufacturing sector on 85%, and the construction sector, professional services, and public, education, health sector all on 83%.

The recruitment pressure points vary across sectors. For firms who struggled to recruit in the construction sector, 73% faced difficulties in finding skilled manual/technical workers. However, for hospitality businesses that struggled to recruit, 70% faced difficulties in finding semi/unskilled workers.

Investment in training remains low; less than a quarter (24%) of firms reported an increase in their investment plans over the last three months. Sixty percent reported no change to their plans, while 16% of firms reported a decrease.

Responding to the findings, Director of Policy and Public Affairs at the British Chambers of Commerce, Alex Veitch, said:

“Today’s findings reveal that British businesses are facing the highest level of recruitment difficulties on record. Instead of seeing any easing of our extremely tight labour market, this issue only continues to head in the wrong direction. While the government will be celebrating their apprenticeship programme this week as part of National Apprenticeship Week (6-12 February), we urge them to use this time as an opportunity to take a hard look at the reality of how the system is actually working for businesses and apprentices.

“The Apprenticeship Levy is unsuitable for many employers, and the BCC is calling on the government to introduce flexibility into the levy. This will ensure employers can support everyone in the workplace to get the training they need. In addition, we are calling for the T Level employer financial incentive to be reinstated to help firms offer more quality industry placements. The burden of childcare is also a major barrier to inactive workers re-entering the workforce. Access to childcare must be simple and affordable; we would like to see the introduction of a flexible family childcare budget that can be used to the meet individual families’ needs.

“Finally, government must hear our calls to reform the Shortage Occupation List to help businesses fill urgent job vacancies when they cannot recruit locally. The List should more accurately reflect, and offer solution to, the skills and labour challenges facing our businesses. With an anaemic economy and low productivity, government must take immediate steps to ease the considerable labour pressures on businesses – we can’t afford to wait any longer.”