• The proportion of firms who have increased their workforce falls to a fifth (20%) from 24% in Q4 2024, while 17% report a decline in their workforce
• 73% of firms say labour costs are creating pressure to put up prices
• Of those attempting to recruit, 76% of firms faced difficulties, down from 79% in the last quarter
• Construction (83%) and transport and logistics (82%) firms are most likely to be facing recruitment problems
• 20% of firms have reduced training investment over the last three months, while 22% have increased investment
The British Chambers of Commerce (BCC) Insight Unit’s latest Quarterly Recruitment Outlook (QRO) reveals only a fifth (20%) of firms increased their workforce over the last three months.
This is down from 24% in Q4 2024, as business grapple with rising costs, including the national insurance hike. Meanwhile, 63% said their workforce had remained constant and 17% reported a cut in staff.
The research for Q1 was conducted before the recent Spring Statement, with fieldwork carried out between 10 February and 10 March. Over 5,000 businesses from across the UK responded, 91% of whom are SMEs.
There was a fall in the number of firms attempting to recruit, 54% compared with 59% in Q4 2024. For the firms who have attempted to recruit in the last three months, 76% of respondents said they had experienced difficulties, down from 79% in the previous quarter.
Construction and engineering firms continue to struggle the most finding staff, with 83% reporting recruitment issues. Businesses in the transport and logistics sector are not far behind with 82% having difficulties. At the other end of the scale, 63% of marketing and communications firms faced hiring problems.
Labour costs continue to be the main pressure businesses are facing to raise prices – cited by 73% of firms (compared with 75% in Q4 2024). The pressure is felt most keenly in manufacturing (82%), transport and logistics (81%), hospitality (81%) and construction (80%).
The number of businesses reducing investment in staff remains similar to last quarter, with 20% of responding firms reporting a cut in training spend compared with 19% in Q4. Meanwhile, 22% said they had increased training investment and 58% of businesses said training investment had remained the same.
