Almost one in three mid-sized businesses say they will need to recruit this year to support their growth objectives, but many are still struggling to find candidates with the right skills.
Forty per cent of organisations surveyed by business consultancy BDO are worried about finding employees with the skills they need and 35% report a lack of staff who are able to work the hours their business requires – rising to 40% of firms in retail and wholesale.
A third (32%) say they need to recruit new staff to support their growth trajectory, but for companies with an annual turnover of between £10m and £50m, the proportion is 43%.
Two years on fom Brexit, 32% are concerned by a shortage of workers from overseas – particularly firms in the North East (45%) and North West (33%). This has meant a quarter of businesses will rely on a greater proportion of domestic hires this year.
Many of the 500 medium-sized businesses polled are also struggling to access apprentices, with 31% citing a shortage of apprentices as an issue affecting their hiring plans.
“While many businesses are optimistic about recovery this year, it is not guaranteed,” said Ed Dwan, partner at BDO.
“With significant concerns about staff shortages on the one hand and rising costs of hiring on the other, the National Insurance hike in April could prove a tipping point for medium-sized businesses – the engine of the UK’s economy.
“The struggle almost a third of businesses are facing when trying to find apprentices is also deeply concerning. As organisations try to plan for the future, more should be done to encourage talented workers down this route and create a thriving workforce for the years ahead, whilst also supporting better social mobility.”
To entice candidates and retain existing employees, 23% say they will introduce new perks and 21% will be more flexible in the working practices. Pay is also increasing rapidly, with 16% stating that they are paying staff more to keep up with rising inflation and 17% doing so to attract and retain talent.
This comes as the CIPD found average pay awards are set to hit 3% this year, although this is likely to be swallowed up by inflation which is set to hit 7% by the spring.
Despite the hiring struggles and increased costs they face, 60% of the firms polled say they will return to pre-pandemic revenues in the next 12 months.
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