Staff Shortages Impacting Productivity – Quarterly Recruitment Outlook  

October 19, 2022

• Manufacturing and hospitality firms are most likely to report recruitment difficulties, but 76% of businesses overall that have attempted to recruit face problems finding staff
• More than half of all businesses (56%) say they are operating below full capacity with the problem most widespread in hospitality (71%)
• BCC calls on government to work with business on solutions including urgent reform of the Shortage Occupations List (SOL)

A new survey by the British Chambers of Commerce (BCC) reveals firms’ recruitment struggles remain at record high levels. The data for the leading business group’s Quarterly Recruitment Outlook (QRO) for Q3 2022 was drawn from a survey of more than 5,100 businesses, 92% of whom were SMEs.

Attempted recruitment in Q3 remained broadly the same as the previous quarter, with 62% of firms looking to find staff (61% in Q2 2022). But there was a noticeable increase in the number of hospitality firms trying to find staff at 77%, up significantly since the beginning of the year (62% in Q1).

Overall, more than three quarters of firms (76%) attempting to recruit continue to report recruitment difficulties, the same as in Q2.

The manufacturing sector is facing the most severe recruitment challenges, with 82% reporting difficulties. This is closely followed by hospitality on 81%, logistics on 79% and construction and engineering on 77%.

The impact of this on business productivity is clear to see with 56% of all firms reporting they are operating below full capacity, rising to 71% of hospitality firms.

With economic uncertainty continuing, less than a quarter of employers (24%) have increased their investment in training in the last three months, down from 28% in Q2.

Responding to the findings, Director of Policy and Public Affairs at the British Chambers of Commerce, Alex Veitch, said:

“Unless we find a solution to the longstanding recruitment difficulties facing UK businesses then any plans to boost economic growth are doomed to failure. We have to fix the people problem before we can make headway on the productivity issue.

“With more than half of all businesses operating below full capacity, despite months and months of desperate attempts to fill jobs, it is clear something has to change.

“This is now preventing firms from operating profitably and they are being forced to turn customers away. The longer that continues the more damaging it becomes.

“Answers are urgently needed, so that firms can not only keep their doors open through these tough times but start to think about the future.”

The BCC has given Government a three-point plan to help solve the UK’s long-term recruitment problem. This includes:

• Encouraging firms to find new ways of unlocking pools of talent – by investing more in training their workforce, adopting more flexible working practises and expanding use of apprenticeships;
• Providing training related tax breaks; and
• Reforming the Shortage Occupation List (SOL) to allow sectors facing urgent demand for skills in the short-term to get what they need.