We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Skip to main content
  • Register
  • Help
  • Contact us

Over 40% of larger UK businesses struggling to recruit

British businesses have reported a sharp rise in recruitment difficulties within the space of just a few weeks - partly as a result of a continued lack of European Union workers, official figures showed on Thursday.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

British businesses have reported a sharp rise in recruitment difficulties within the space of just a few weeks - partly as a result of a continued lack of European Union workers, official figures showed on Thursday.

Some 41% of companies with 10 or more staff reported greater than usual recruitment challenges in the two weeks to Sept. 5, up from 32% in early August, the Office for National Statistics (ONS) said.

Around a quarter of businesses with recruitment difficulties named a reduced number of EU applicants as a factor, rising to almost half in the transport and storage sector, where a lack of truck drivers 9-03 has led to widespread delivery bottlenecks.

Labour shortages were most widespread in hospitality, followed by water utilities, healthcare and construction.

Britain introduced new immigration rules on Jan. 1 which require most EU workers not already living in Britain to get work visas, something that can be time-consuming and costly.

The number of EU nationals employed in Britain in the three months to the end of June was 8.7% lower than before the COVID-19 pandemic, compared with a 2.4% fall in the size of the total workforce, the ONS said.

ONS data earlier this week showed Britain had more than an average of just over 1 million job vacancies in the three months to the end of August, a record high.

Recruitment difficulties had also become a theme in company earnings reports in the past quarter, said Sarah Coles, a personal finance analyst at brokers Hargreaves Lansdown.

"In some cases, this means businesses are struggling to operate effectively, which in turn is putting the brakes on GDP," she said.

Employers have called on the government to temporarily ease visa rules to allow them more time to train British staff, but the government has rejected this so far and said part of the solution is for businesses to improve pay and conditions.

The Bank of England expects higher oil prices and post-pandemic bottlenecks, including labour shortages, to push inflation up to 4% by the end of the year, although it thinks this will fade and sees potential slack in the job market.

Britain's COVID furlough programme ends on Sept. 30. Businesses said that in the two weeks to Sept. 5, 6% of their staff were receiving furlough payments for some or all of their hours, equivalent to about 1.6 million employees.

Copyright (2021) Thomson Reuters. This article was written by David Milliken from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.


Newsroom: our daily email

Sign up to receive the daily headlines that matter to investors.


Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.

    Loading

    Your postcode ends:

    Not your postcode? Enter your full address.

    Loading

    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

    Free news email alerts

    • Daily and weekly news
    • Major Publishers
    Register