Hiring in the UK: New Data Shows Business Budgets Still Breathe Easy—Disruptably!
What the Numbers Say
According to the British Chambers of Commerce (BCC) Insight Unit’s latest Quarterly Recruitment Outlook (QRO), the hiring tide has largely stayed level over Q2. This comes after the National Insurance (NI) rates bump climbed into effect, but most firms are holding their breath, not chasing recruits furiously.
- 55 % of participating companies went out in the last three months to fill roles—just a hair above the 54 % in Q1.
- Of these hiring warriors, 73 % hit a few snags during the recruitment angst, a slight lift from the 76 % pain last quarter.
- The study drew in over 4,500 businesses (93 % of them are SMEs) and ran from 12 May to 9 June.
Sector‑by‑Sector Breakdown
It turns out the “one‑size‑fits‑all” approach doesn’t work for hiring woes. Certain sectors feel the pressure more than others.
- Transport & Logistics still nagging with recruitment headaches, 80 % find it hard to land the right talent (a tiny dip from the 82 % in Q1).
- Construction & Engineering follows close behind, 77 % struggle (slightly better than the 83 % back then).
Staffing Moves—No Big Surges
Most companies decided to keep the crew size where it was.
- 60 % of firms kept the workforce steady—no new hires, no layoffs.
- 23 % added staff in Q2, up a notch from the 20 % in Q1.
- Looking ahead, only 25 % think they’ll grow the team over the next three months—a bit more hesitant than the 27 % in Q1.
Cost Pressure—Labour Still the Boss
Everyone’s whispering that labour costs are the headline bother.
- 73 % of respondents cite wages as the biggest cost battle—same as last quarter.
- For transport & logistics, the pressure is 88 %, while in hospitality it’s 83 %.
Training Budgets: Stuttered Growth
Companies haven’t exactly exploded with training spend.
- 23 % of firms ramped up training investment in Q2, slightly inching from 22 % in Q1.
- 59 % avoided extra spends on staff development over the last quarter.
In a nutshell, the British job market is holding its ground, with firms taking cautious steps amid higher insurance costs and real‑world wages. If you’re a business owner, the message is clear: keep your budget tight, stay patient, and maybe invest a tad more in training—because a skilled crew can soften those wage blows. Surely, a calm hiring rhythm isn’t a bad thing—especially when the next quarter’s still a mystery!
What businesses are warning
Wage Woes: Small Businesses Squeeze Under Rising Costs
Talks about the new NIC hike, other cost spikes, and the fact that businesses can’t simply “pass it on” to their customers are sounding the alarm across counties. Small firms are scrambling to keep their heads above water, and recruitment plans are getting flat‑lined.
Local Voices
- Medium‑sized services in Liverpool: “The position remains the same, our wage bill is ballooning because of higher NICs and other costs, but we’re not allowed to charge customers for it. It’s hit our recruitment and growth plans hard.”
- Micro‑manufacturing firm in the East Midlands: “The Labour government says it is helping working people, but it forgets that those people still need a place to work. Rising business costs are making hiring decisions a tough nut to crack.”
- Small public‑sector firm in Suffolk: “The increase in Employer’s NI is not a win. Staff training has shrunk and we’re losing new recruits.”
- Small hospitality venture in Dorset: “Wage costs are the real threat. We can only pay what’s in the bank. We’ll have to slash staff numbers or hours to survive.”
Insights from Jane Gratton, BCC Deputy Director of Public Policy
Jane kicks it off with a cool‑headed, almost ominous forecast: “It’s still early but firms are already sounding the alarm on NICs and other employment costs. A big shock could hit even later.” She points out that persistent skills shortages and higher labor costs make recruitment a major hurdle for SMEs.
Jane says: “Firms are adjusting budgets—whether it means hiring fewer people, not replacing those who leave, or pulling back on training. One thing’s clear: higher employer costs are chewing on growth.”
She stresses that sectors like transport, logistics, and construction are feeling the pinch the most and urges policymakers to act now. The Blueprint for Growth offers concrete proposals ready to smash the recruitment headache and turbocharge the economy. It’s all about flexible training, support for people with barriers to work, and a firm commitment to no more tax hikes on businesses.
Recruitment Difficulty
Business leaders are stuck between tighter wallets and a talent shortage that’s as relentless as a bad coffee. Cutting costs, slimming workforce numbers, or grinding back on staff development—no one’s laughing about these, but there’s a silver lining if the new policy blueprint gets the green light.
Stay tuned for updates, because if the reforms don’t roll out soon, the next wave of cost surges could blow the caps off of small firms, leaving them with a big, hard-to‑solve recruitment problem.
