By Ian McConnell

A RECORD 78 per cent of UK firms attempting to recruit faced difficulties in finding staff in the first quarter, a survey by British Chambers of Commerce shows.

The business organisation noted hospitality, construction, logistics and manufacturing firms were most likely to have reported difficulties but declared “all sectors have significant issues”. Smaller firms reported increasing wage pressures were making it harder to compete for staff.

In hospitality, 85% of firms reported recruitment difficulties in the first quarter, up from 83% in the previous three months. The proportions in construction, logistics, and manufacturing were 83%, 81% and 80% respectively.

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British Chambers said: “Firms reported a broad range of issues which contributed to the overall recruitment squeeze – this included disruption due to Covid and a drop in the availability of foreign staff.”

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It noted its research over the last two years had “found a massive array of sources of skills shortages and price pressures, but the two dominant factors have been Covid, primarily, and Brexit, secondarily”.

Jane Gratton, head of people policy at British Chambers, said:  “It’s now harder than ever for businesses to fill job vacancies and there are no signs of improvement. In an increasingly tight labour market, competition for skills is ramping up wage costs, leaving many firms unable to recruit the people they need.

“When combined with the escalating price of energy, shipping, raw materials and other costs, it is a precarious situation for businesses. Inevitably, it is the smaller firms, with little in the way of cash reserves after two years of pandemic, who are most exposed to the risk all this presents."

She declared the "UK Government needs to take concrete action to address labour shortages as they are a key factor in the economy’s stuttering recovery".

Ms Gratton added: "If firms cannot get the people they need, then productivity and revenue are two of the first casualties.

“Government must also ensure that people can access rapid retraining opportunities for in-demand jobs at all skill levels in the workforce. At the same time, where there is clear evidence of national shortages damaging the economy, we need temporary visas for hard-working people willing to come to the UK to work in the essential everyday roles that we all rely on.

“Businesses are investing more in developing home-grown talent – and creating a more inclusive and diverse workforce – but this won’t solve pervasive skills shortages overnight. Right now, the priority has to be to improve access to skills and ease the wider cost pressures facing business.”