UK businesses struggle to recruit staff needed to fill key roles

New research has revealed the investment and growth plans of SMEs in the UK. Despite the ongoing cost-of-living crisis, SMEs plan to spend an average of £321,000 on growth strategies over the next year. One in eight SMEs plan to spend over £1 million investing in growth.

Employers are still struggling with labour shortages and would need the entire population of Birmingham twice over to fill every vacancy, according to the latest snapshot of Britain’s labour market.

Employers ran active job advertisements for 2.25 million jobs in the week to July 9 — 53 per cent more than in the equivalent period in 2022, according to the latest data from the Recruitment and Employment Confederation.

They placed 193,000 new job ad postings that week, which was 9 per cent higher than a year earlier. Firms were also leaving job ads open for longer than normal because of difficulties in finding people, the REC said.

The findings suggest employers are in relatively confident mood about future demand, but prompt concerns that the shortages could push up wages and feed through into higher selling prices and fresh inflationary pressures.

Neil Carberry, chief executive of the REC, said. “It would require around double the population of Birmingham to fill all these posts.”

Notable increases in job ads for driving instructors, paramedics and animal care services showed some of the greatest pressure points. Previous REC research found shortages of bar staff, waiters, bakers and cooks. Pubs, cafés, restaurants and other hospitality businesses were having to reduce opening hours, service offers or trading days despite plentiful demand, Carberry said.

“It is so frustrating for hospitality firms that they can’t take full advantage of the anticipated strong demand this summer because of the failure to overcome labour shortages. Wages have risen fast in this sector and firms have invested much more in hospitality career development, but even this isn’t enabling firms to move fast enough,” he added.

The REC findings contrast with some other sources on the labour market. Reed Recruitment said last week that the number of jobs listed on its sites in the three months to June was down by about a quarter, and suggested Britain could be heading into recession.

Wages rose at a record pace in the three months to May, according to the Office for National Statistics last week. Average pay growth picked up from 7.2 per cent to 7.3 per cent.

Brexit, Covid and high inactivity rates among parts of the working-age population have all been cited to explain labour shortages.

Colin Shute, Owner and Founder of soft facilities management service provider, SBFM, believes ex-offenders and care leavers should be given more chances to fill labour shortages. He said: “There is a simple solution for employers who are struggling with labour shortages, and that’s to put faith and trust in ex-offenders and care leavers. There is a misconception that these groups don’t deserve a chance. But rehabilitation is possible, and many ex-offenders and care leavers are highly skilled workers. We work with prison leavers and local employers who are willing to offer their expertise and guidance on skills, qualifications, and training, and have witnessed how displaying trust, confidence, and faith in them can change lives. Prison leavers need security and stability. This is an opportunity for businesses to help make positive societal and economic change and plug the labour shortage in the process.”