The majority of small employers across the UK (with less than 50 staff) reported shortages of candidates (81.5%), according to a survey by the Recruitment and Employment Confederation (REC) and market research company Savanta.

A total of 57.1% of medium-size employers (50-249 staff) and 66.7% of large employers (with 250+ staff) reported shortages of candidates, which suggests that they are also challenged, but finding better routes to cope.

Overall, 77.8% of all respondent employers said they are witnessing labour shortages. By region, it was broken down as: North 82.6%, Midlands 72.7%, South excluding London 85.7%, South including London 74.1%, London 61.5% and other areas which are the devolved nations 90.9% (Wales, Scotland, Northern Ireland).

Neil Carberry, REC Chief Executive, said, “Companies reporting persistent hiring difficulties comes as no surprise to us at the REC. Too few firms have appreciated that, despite slow growth, our jobs market has changed fundamentally. Only 9.5% of firms told us they were looking to temps, freelancers and contractors to help. Yet support from agencies on both temporary labour and innovative routes to hiring permanent roles are vital to getting the people a business needs now.”

“A good recruitment partner is no luxury, and small firms in particular can benefit from the specialist skills they bring,” Carberry continued. “As well as helping with reaching new pools of candidates, and innovative flexible options, agencies can deliver great support and advice to their clients. What matters, though, is that businesses understand that buying on value rather than lowest price matters – cutting costs in recruitment processes is a highway to failure.”

The REC noted that the survey is important because of acute shortages of workers across the UK, with 1.7 million active job postings in December 2023. And with REC’s Overcoming Shortages report finding that a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, could lead to a 1.2% fall in expected GDP and productivity by 2027, costing the economy anywhere between £30 billion and £39 billion every year.