Businesses across the UK report recruitment was more difficult in Q2 2024, with more firms facing problems hiring staff, according to the latest Quarterly Recruitment Outlook (QRO), a survey of more than 4,700 UK firms of all sectors and sizes by the British Chambers of Commerce (BCC) Insights Unit.

The data shows that in Q2, 59% of respondents said they had attempted to recruit in the last three months, slightly down from 62% in Q1. Of the firms who tried to hire in Q2, 74% reported recruitment difficulties, compared with 66% in the year’s first three months.

Meanwhile, 80% of hospitality businesses attempted to recruit, whereas the figure for the retail sector was 44%. Almost three-quarters of firms (71%) in the hospitality sector said they had faced recruitment problems in Q2 (Q1 64%), while 70% of retailers faced difficulties, up from 61% in Q1.  

Construction and engineering firms are bearing the brunt of staffing issues, with 82% reporting recruitment problems in Q2, up from 69% in Q1. At the same time, 79% of firms in the transport and logistics sector said they had faced difficulties (up from 69% in Q1). In production and manufacturing, 77% of businesses that tried to recruit also faced problems, up from 70% in the previous quarter. 

Further data from the report found that although most businesses are still struggling to increase investment in workplace training, Q2 did see a slight increase as 28% of firms reported an increase in staff training investment, up from 26% in Q1, with 11% reporting a drop. Over the past three months, over half, or 61%, reported no change in their investment plans for training. 

Labour costs continue to be the main external pressure on businesses in Q2, with 67% of firms saying they could be forced to put up prices as a result. Concerns around labour costs are highest in hospitality (77%), followed by construction and engineering (76%) and production and manufacturing (72%). 

Jane Gratton, deputy director public policy at the British Chambers of Commerce, said, “It’s alarming that recruitment difficulties have increased in recent months across all sectors. The very sharp rise in the construction industry is particularly worrying.”

“People shortages and labour costs are ramping up pressure on firms and holding back growth,” Gratton added. “We need to prioritise help for people to get back into the labour market and remove the barriers to business investment in training.”

“Better planning for skills is crucial,” Gratton continued. “The new government must work at pace to outline a long-term national skills strategy, working closely with the devolved administrations. Building on local skills improvement plans will help develop strong partnerships between employers, training providers and others, to ensure people get the skills and support they need.”