New figures show workforce growth expected, but some sectors yet to see signs of revival

Just 40 percent of firms recruited new staff in the first three months of 2021, compared to pre-pandemic figures for the same period of 55 percent.

That was one of the findings of the Quarterly Recruitment Outlook for Q1 2021 from the British Chambers of Commerce.

Sixty percent of the 5,900 businesses surveyed saying they had not attempted to recruit during the quarter.

However, the percentage of firms expecting their workforce to grow in the next three months rose from 19 percent in Q4 2020 to 27 percent in Q1 – the highest percentage since Q1 2020, and a return to pre-pandemic levels more broadly.

And the proportion of firms expecting a decrease in their workforce dropped from 14 percent to nine percent.

But, predictably, some sectors lagged behind. Only 20 percent of hotels and catering firms and 34 percent of retail and wholesale businesses attempted to recruit.

The survey also suggested those businesses recruiting were struggling to attract potential new employees to the workplace.

Overall 53 percent of businesses reported difficulty recruiting. Those reporting issues in finding staff were highest in the construction sector at 71 percent, up from 58 percent in Q4.

In the retail and wholesaling sector, the percentage who encountered difficulties was only 56 percent, although this still represents an eight-point rise from the previous quarter.

The construction sector also had the highest proportion of companies expecting their workforce to grow in the next three months at 34 percent.

Retail and wholesaling came in lowest here, with only 22 percent expecting workforce growth. Hotels and catering showed a more volatile picture, with 26 percent expecting their workforce to grow, although the proportion expecting to reduce their workforce was the highest amongst all sectors at 14 percent.

These figures come on the back of ONS statistics which recently showed hospitality among the sectors suffering the biggest job cuts over the past year, as well as people under 25 holding 54 percent of the payroll jobs lost in that time.

“These new figures serve as a sharp reminder of how unevenly the jobs impact from Covid-19 has been distributed across different sectors, and the consequences this could have for different generations in the workforce,” said Jane Gratton, head of people policy at the British Chambers of Commerce.

“For inexperienced young people now entering the workforce, and those whose jobs have been lost during the pandemic, the labour market is particularly competitive.

“While the furlough scheme has helped to protect many jobs, the severe restrictions on retail, leisure and hospitality businesses have reduced entry-level employment opportunities, while difficult business conditions have seen thousands fewer apprenticeship opportunities created.

“The Kickstart initiative must be extended and funded well beyond December 2021, together with a more streamlined and efficient process for employers.

“Extending employer incentives would support businesses in creating more apprenticeship and traineeship opportunities for young people.

“These measures, together with a temporary cut in employer national insurance contributions, will support job retention and recruitment for young people and others in the labour market.

“Government must also ensure that the skills system is responsive to the needs of employers and has the flexibility to deliver high-quality training solutions when and where needed.”