Hiring difficulties have eased in the first few months of 2024, according to the latest Quarterly Recruitment Outlook from the British Chambers of Commerce (BCC).

62 per cent of respondents had attempted to recruit in the past quarter, up from 59 per cent in Q4 2023.

Of those, 66 per cent reported difficulties in the process – the first time that figure has fallen below 70 per cent since the economy reopened post-Covid, and down 10 per cent from the previous quarter.

Companies in production and manufacturing were most likely to face problems hiring staff, at 70 per cent. But this too was down from 77 per cent in Q4 2023.

The challenge for firms in those sectors is mainly in finding skilled manual or technical staff, with only 35 per cent reporting issues recruiting semi- to unskilled workers.

However, as businesses continue to face unpredictable economic conditions, the majority are struggling to increase investment in workplace training.

For the third quarter in succession, just over a quarter of businesses reported an increase in staff training investment, with 12 per cent reporting a drop. That compares with 14 per cent in Q4 2023.

Jane Gratton, deputy director public policy at the BCC, said: “It’s welcome that the recruitment picture is improving, and the percentage of firms reporting difficulties is at its lowest level for three years.

“This comes as other indicators show the labour market is cooling.  

“However, with 66 per cent of firms still facing hiring challenges, the problems remain significant.

“Too many employers are struggling to find people with the skills they need to fill job vacancies. That’s damaging business opportunities and growth. 

“The growing number of people not looking for work, or out of action because of long-term health issues, is exacerbating the skills problem.

“More needs to be done to tackle the issues behind this worrying trend and help people back into the workforce. 

“We need a long-term industrial strategy, underpinned by better skills planning and more investment in training. That needs to happen nationally, locally and in every business.

“We need to support everyone who wants to work to achieve their potential.

“Doing that will help tackle skills shortages – improving growth and opportunities in local economies across the UK.”