Economic pressure holding recruitment back

By Rebecca Weller

- Last updated on GMT

Unprecedented conditions: staffing costs now a big worry for hospitality businesses (Credit: Getty/andresr)
Unprecedented conditions: staffing costs now a big worry for hospitality businesses (Credit: Getty/andresr)

Related tags Recruitment Finance Ons

Average regular pay rates saw the strongest growth outside of the pandemic from July to September 2022, figures released today (Tuesday 15 November) by the Office for National Statistics (ONS) have revealed.

The data showed average total pay growth (including bonuses) was 6% and growth in regular pay (excluding bonuses) was 5.7%, while average regular pay growth in the private and public sectors were 6.6% and 2.2% respectively.

However, when adjusted for inflation, total pay fell by 2.6% in real terms over the year while regular pay fell by 2.7%.

This comes as a survey commissioned by business support company UMi, revealed more than two thirds of SMEs felt less confident about the future of their business than they did 12 months ago, largely attributed to rising staff costs.

Unprecedented trading conditions 

According to the survey, based on answers from 1,000 business participants, the top three worries for UK SMEs were energy and utilities (32%), staff costs (22%) and fuel costs (12%).

UMi chief executive Nicki Clark OBE said: “As a provider of business advice, we’ve been on the front line in supporting SMEs across the UK over the past six months as they navigate unprecedented trading conditions and this survey shows just how hard our SMEs are finding things in the face of economic uncertainty.” 

Furthermore, the UK employment rate for the period was 75.5% with the number of employees having decreased while the number of self-employed workers increased.

Though the estimate of payrolled employees for October 2022 rose 74,000 to a record 29.8m, the unemployment rate for July to September decreased by 0.2 percentage points on the quarter to 3.6%.

Struggling to recruit 

Additionally, economic inactivity increased by 0.2 percentage points to 21.6%, driven by long-term sickness, though the estimated number of vacancies fell by 46,000 on the quarter to 1,225,000,

However, a number of businesses reported holding back on recruitment due to economic pressures, according to the ONS.

This comes as recent figures collated by British Beer & Pub Association (BBPA​​), British Institute of Innkeeping (BII​​), UKHospitality (UKH​​), the Institute of Hospitality and charity Springboard showed the ongoing recruitment crisis was costing hospitality £22bn a year.

A joint statement from the organisations said: “Since the pandemic, vacancies in our sector have rocketed, with many businesses now struggling to recruit the staff needed to simply keep trading day to day.”

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