NEW London Chamber of Commerce and Industry announces results of Quarterly Skills Survey

The latest London Skills Survey from the London Chamber of Commerce and Industry shows that although the majority of firms sought to recruit towards the end of last year, they were met with skills shortages.

8 February 2022, London – London Chamber of Commerce and Industry has today published the results of its Q4 2021 Quarterly Skills Survey, which interviewed over 500 business leaders between 28 October and 11 December 2021. The results of the survey found that London businesses struggled with recruiting, as the majority of macro and micro firms encountered a distinct lack of qualified candidates. The report also reveals that the introduction of new technology is seen to be the biggest driver for new skills by businesses, ahead of the pandemic and Brexit.

Key findings from the Q4 Quarterly Skills Survey:

Although the percentage of businesses recruiting increased marginally from Q3, the majority of micro (0-9 employees) and large firms faced difficulties when doing so.

18% of London businesses said they had sought to recruit, up from 17% in Q3 2021 and 12% in Q4 2020.
More than three fifths (63%) of micro firms who tried to recruit faced difficulties doing so. This figure dropped to 50% for larger companies.
Of the firms that encountered challenges, 51% found a lack of qualified candidates as the main barrier to recruiting, followed by candidates not being able to commit to contracted hours (45%) and a lack of interested candidates (44%).

Nearly half (48%) of London business leaders said the inability to meet skills and labour needs had an impact on their business, rising to 76% in larger companies. The nature of these impacts was wide-ranging and varied considerably depending on business size.

16% of micro companies reported that losing business or orders to competitors was the biggest impact, followed by increased operating costs (15%) and increased workload for other staff (13%).
In larger companies, the biggest impact was increased workload for other staff (44%), followed by difficulties meeting customer service objectives (34%), and increased operating costs (26%).

When faced with recruitment challenges, businesses were asked what (if any) actions they would take to remedy the situation and fill vacancies. Responses varied greatly depending on the type and size of business.

Nearly one third (32%) of micro businesses said they would not take any action if faced with unfilled vacancies, compared to 15% of larger firms.
Larger firms were far more likely to remedy the situation financially than small companies. 24% of larger companies would increase salaries compared to 12% of micro companies. Similarly, 26% of larger companies would increase advertising or recruitment spend compared to 6% of micro businesses.
Manufacturing firms experienced more recruitment and skills related difficulties than their counterparts in services. While manufacturers were more likely to adapt by increasing salaries (32%), their services counterparts chose contracting (12%).

Investment in staff training overall improved for firms of all sizes, although larger companies were more likely to have spent money on training for staff over the past year

For micro companies, the net balance for investment in training jumped from -5% to 6% in Q4 2021, marking the first positive reading in two years. For larger companies, the net balance increased by a lesser degree from 24% to 29%.
Close to one-third (30%) of larger companies said they had funded both on and off-the-job training, compared to just 7% of micro businesses.. 69% of micro firms said they had not funded or arranged either on or off-the-job training.

Businesses were asked to identify whether certain events including the pandemic, Brexit, new regulatory requirements and increased competitive pressures had increased the need for employees to upskill.

Larger businesses were more expectant (79%) than their micro counterparts (50%) that employees would need to acquire new skills over the course of the next year.
Micro firms identified the introduction of new technologies (18%) and Brexit (16%) as driving the need for employees to broaden their skill sets.
For larger businesses, the need was driven by Covid-19 (39%), the introduction of new technologies (30%) and Brexit (29%).

To read the full report, click here.