Sixty per cent of businesses in Wales say they are experiencing difficulties in hiring new staff.

The latest Quarterly Recruitment Outlook (QRO), a survey of more than 5,000 UK firms of all sectors and sizes by the British Chambers of Commerce (BCC) reveals businesses are still facing record high difficulties in hiring new staff.

The first quarter results for 2023 show that recruitment difficulties have fallen just two percentage points from the record high level of 82 per cent in Q4 2022.

While recruitment difficulties are being experienced across the economy, firms in the hospitality and manufacturing sectors were the most likely to report recruitment difficulties (83 per cent in each sector). This is closely followed by the construction and engineering sector (81 per cent) and then professional services; and public, education, health sectors on 79 per cent.

Across all sectors in Wales, 60 per cent of businesses faced difficulties in finding skilled manual/technical workers, closely followed by professional and managerial staff and semi or unskilled workers.

Investment in training remains stubbornly low in an environment of increasing cost pressures. Just over a quarter of firms (27 per cent in UK and 26 per cent in Wales) reported an increase in their training investment plans over the last three months.

Overall, 67 per cent of businesses say labour costs are a source of inflationary pressure, with a similar number (66 per cent) worried about energy costs. Concerns around labour costs are highest in manufacturing (76 per cent) followed by construction and engineering, logistics, and hospitality (each at 70 per cent).

In Wales, the pressure to raise prices because of labour costs has increased from 63 per cent in Q4 2022 to 79 per cent in Q1 2023, a significant jump that indicates that it is an employee’s market at present.

Paul Butterworth, interim CEO of Chambers Wales South East, South West and Mid: “This latest survey shows recruitment remains an ongoing challenge for businesses in Wales and the UK.

“While fewer businesses in Wales attempted to recruit within the last quarter, a significant percentage of those that did continued to experience difficulties in finding suitable staff.

“Investment in training remains low due to overall cost pressures, including labour costs. 64 per cent of businesses in Wales told us that they were under pressure to raise prices of their goods and services due to existing labour costs.

“We need to see the commitments made in the Spring Statement regarding employment and enterprise propelled into action so that employers can respond to skills and labour gaps in their businesses and look ahead to growth.”