Businesses in Wales and across the UK are still finding it difficult to hire staff with those in hospitality and manufacturing struggling the most, new figures reveal. A new survey found that almost six in ten British businesses were actively trying to recruit staff in the first three months of 2023, but 80% said they faced challenges hiring staff.
In Wales, 45% had attempted to recruit in the first three months of this year so far but 71% said they experienced difficulties in finding suitable candidates. Firms in hospitality and manufacturing were most likely to report recruitment challenges, with 83% of firms in those sectors finding it difficult to hire staff.
This was closely followed by construction and engineering (81%) and professional services alongside public, education and health sectors (79%).
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However, recruitment pressure points varied across sectors. A total of 71% of firms in the construction and engineering sectors said they found it difficult to hire skilled manual and technical workers. While 64% of hospitality firms faced difficulties in finding semi-skilled and unskilled workers.
Across all sectors in Wales, 60% of businesses faced difficulties in finding skilled manual and technical workers, closely followed by professional and managerial staff and semi-skilled and skilled workers.
Despite the recruitment issues, the survey showed low levels of investment in training by businesses because of increasing cost pressures. Just over a quarter of firms (27% in the UK and 26% in Wales) reported an increase in their training investment plans over the last three months.
Overall, 67% of firms said labour costs were a source of inflationary pressure, with 66% concerned about energy costs. Concerns around labour costs were highest in manufacturing (76%) followed by construction, engineering, logistics and hospitality (each at 70%).
In Wales, the pressure to raise prices of goods and services because of existing labour costs jumped from 63% in Q4 2022 to 79% in Q1 2023, suggesting it is currently an employee’s market.
The figures were revealed in the latest quarterly recruitment outlook by the British Chamber of Commerce (BCC), which surveyed more than 5,000 firms in the UK, and the Chamber's quarterly economic survey.
The BCC is now calling on the government to work with business on recruitment solutions including skills training, investment and urgent reform of the Shortage Occupations List.
Interim chief executive of Chambers Wales Paul Butterworth said: “This latest survey shows recruitment remains an ongoing challenge for businesses in Wales and the UK. While fewer businesses in Wales attempted to recruit within the last quarter, a significant percentage of those that did continued to experience difficulties in finding suitable staff.
“We need to see the commitments made in the Spring Statement regarding employment and enterprise propelled into action so that employers can respond to skills and labour gaps in their businesses and look ahead to growth.”
Jane Gratton, head of people policy at the BCC, said: “People shortages are a massive issue and employers can see little sign of improvement. The high number of unfilled job vacancies is damaging businesses and the economy. Firms are struggling to fulfil order books and turning down new work.
“While investment in training is part of the solution, it is being held back by rising overall cost pressures and a lack of time and resources at firms to mentor and support new recruits.
“There is no quick fix and employers and the government need to work together to find solutions. While firms can do more to make workplaces more flexible and jobs easier to access, the government must redouble its efforts to encourage and help people into work.
“Support for parents and carers, older workers and those with health issues will be crucial. At the same time, where there is evidence of urgent and critical skills shortages that are crippling business sectors, the government must adopt a sensible and pragmatic approach to immigration and ensure that the Shortage Occupations List reflects the reality on the ground.”
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