Hiring boom fading but UK firms still struggle to find staff

According to a BCC poll, the hospitality industry has the worst staffing issues. Separate research indicates that UK recruitment intentions are declining.

According to research, hiring intentions continued to decline last month, suggesting that while UK firms are still having difficulty filling positions, the post-pandemic "jobs boom" may be coming to an end.

In the July to September quarter, 73% of the nearly 5,000 companies surveyed in a survey by the British Chambers of Commerce reported having trouble filling positions. This represents a nine percentage point decline from the record high of 82% in the last three months of 2023.

According to the BCC, the industry with the highest rate of recruitment difficulties is still hospitality (79%), followed by construction and manufacturing (78%). Nonetheless, there are indications that the labor market's tightness is beginning to loosen up; according to independent research conducted by the advisory group BDO, hiring intentions decreased once more.

Its monthly employment index saw its lowest reading in nine years as companies struggle to keep employees on board in the face of rising borrowing costs, rapid wage growth, and declining consumer demand. Business productivity and confidence were also lower, according to BDO, as companies struggled with "ongoing inflationary headwinds.

Following multiple rate hikes by the Bank of England and mounting apprehension about the possibility of a recession, many businesses seem to be taking immediate action to reduce their hiring plans. The most recent official jobless data revealed a 0.5 percentage point increase in the unemployment rate to 4.3%. Robert Walters, Pagegroup, and Hays, three major London-listed recruitment firms, will provide investors with an update this week on their trading during the last quarter. According to City analysts, all three of these companies are expected to report a decline in pre-tax profits by the end of their fiscal years.

The hiring markets in the US, China, and the UK have all shown signs of weakness recently, and there has been a shift toward hiring temporary workers rather than permanent ones, according to the three companies. Robert Walters will update investors on its trading during the previous three months on Tuesday. AJ Bell analysts predict that the company's yearly profits, which increased by 6% to just over £1 billion, will fall by almost half to £29 million.

On flat sales of nearly £2 billion this year, Pagegroup is expected to report yearly profits of £136 million, a 30% decline. On Wednesday, the company will release its third-quarter trading report.

This Thursday, Dirk Hahn—who replaced longtime Hays CEO Alistair Cox last month—will give his first shareholder update, including financial data for the company's first quarter of the current fiscal year. 15% less profit is expected annually, to £166 million.

One of the largest privately held recruitment firms in the UK, Reed, has observed a 20% increase in applications over the past three months despite a 20% decrease in the number of jobs posted compared to the same period last year. James Reed, the company's chairperson, stated that formerly robust industries like telecom, IT, real estate, and construction have all "dropped off."