A new study by the British Chambers of Commerce (BCC) reveals that 73% of nearly 5,000 UK firms surveyed experienced hiring difficulties in Q3 2023. This marks a drop of nine percentage points from the record 82% in the final quarter of 2022, indicating that the post-pandemic “jobs boom” is losing momentum. Hospitality takes the brunt of the recruitment crisis, followed closely by the construction and manufacturing sectors.
Hospitality’s Recruitment Woes
The hospitality sector continues to face significant challenges, with 79% of businesses experiencing difficulty in recruiting staff. This problem could be compounded by the sector’s often flexible but demanding working hours and roles that may not always appeal to job seekers looking for stability.
Challenging Times for Construction and Manufacturing
Construction and manufacturing are also sectors deeply affected, both registering 78% in hiring difficulties. Both industries have traditionally relied on skilled labour, and the dip could be a manifestation of a shortage of such expertise.
Falling Hiring Intentions
BDO’s advisory group corroborates the BCC’s findings in its monthly employment index. It recorded the weakest reading in nine years, suggesting that businesses are finding it hard to maintain staff numbers in the face of increased borrowing costs, elevated wage growth, and weaker customer demand. As firms navigate ongoing inflationary headwinds, business confidence and output are notably down.
Increasing Concerns over Recession Risks
The latest data from the Bank of England on repeated interest rate rises and growing concerns over a potential recession have prompted many companies to reconsider their hiring plans. Official unemployment figures saw a 0.5 percentage point rise to 4.3%, adding another layer to the issue.
Recruitment Firms Show Signs of Strain
London-listed recruitment companies, including Robert Walters, Pagegroup, and Hays, are showing signs of weakness, not just in the UK but also in the US and Chinese hiring markets. City analysts expect these companies to post a fall in pre-tax profits by the end of their financial years, adding weight to the notion of a declining jobs market.
Shift to Green Jobs: A Ray of Hope
However, there may be a silver lining, as Reed is launching “energy academies” designed to teach green skills. Given the pressing need to transition to a more sustainable economy, these academies might offer a long-term solution to both unemployment and environmental sustainability.
The Workers Union Says…
“While the employment landscape seems to be toughening, it’s clear that businesses across various sectors are struggling to find the right talent, despite the pool of job-seekers. Adaptability may be the key, both for employers in sourcing the skills they need and for prospective employees in widening their skill sets.”