Three-quarters of UK firms are still struggling to recruit staff, research has found, but the post-pandemic “jobs boom” appears to be in decline, with hiring intentions continuing to fall last month. A survey by the British Chambers of Commerce found that 73% of the almost 5,000 companies it polled had faced hiring difficulties in the July to September quarter – a nine percentage point drop from the record high of 82% in the final three months of 2022. The hospitality sector continues to suffer the most from recruitment difficulties, with 79% experiencing problems, the BCC said, followed by construction and manufacturing (both on 78%).
However, there are signs that this tightness in the labour market is starting to ease, with separate research from the advisory group BDO showing that hiring intentions fell again in September. Its monthly employment index recorded its weakest reading in nine years, as businesses struggle to maintain staffing numbers amid higher borrowing costs, elevated wage growth and weaker customer demand. Business confidence and output were also down, BDO said, as firms grappled with “ongoing inflationary headwinds”.
The latest official unemployment figures showed a 0.5 percentage point increase in the jobless rate to 4.3% and many companies appear to be moving now to scale back their hiring plans after repeated interest rate rises from the Bank of England and growing concerns over the risk of recession. This week three big London-listed recruitment companies, Robert Walters, Pagegroup and Hays, will update investors on their trading over the last quarter, and City analysts believe they are all on track to post a fall in pre-tax profits by the end of their financial years. The three firms have all noted signs of weakness in the UK, US and Chinese hiring markets in recent months, and a swing towards hiring temporary rather than permanent staff.
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