Businesses in Wales are continuing to face challenges regarding recruitment, the ongoing skills shortage and labour costs, according to Chambers Wales South East, South West and Mid’s latest Quarterly Economic Survey.
In the survey for Q1 of 2024, 46% of businesses in Wales reported that they had attempted to recruit staff, predominantly for full-time and permanent roles. 69% of those who attempted to recruit experienced difficulties in finding suitable staff, a 5% increase compared to the previous quarter, with businesses citing finding candidates with the correct skill sets and qualifications as barriers to recruitment and meeting salary expectations as a challenge for retention.
Salaries and other labour costs were also stated as a key business pressure, with 75% of businesses in Wales feeling under pressure to raise their prices because of these costs. This is also reflected in the national picture with the British Chambers of Commerce reporting that 68% of UK businesses cited labour and staffing costs as their main cost pressure.
However, despite these challenges, there is optimism. 46% of Welsh businesses believe that turnover and profitability will improve over the next 12 months.
Paul Butterworth, CEO of Chambers Wales South East, South West and Mid, said: “The results are a timely reminder of the ongoing challenges businesses in Wales face, particularly around ongoing issues such as recruitment, skills development and employee retention.
“While the economy is caught in a low-to-no growth cycle and managing the effects of interest rates and inflation, businesses have been hesitant to invest in training and skills. With consistent and lower inflation, we hope that the Bank of England will lower interest rates to stimulate investment into skills and the seeds of economic growth.
“In the new first minister’s leadership manifesto, he included pledges to provide flexible and timely reskilling opportunities, a much-needed reinvestment in apprenticeships and developing regional sectoral skill centres for excellence. It is our ask that he starts to deliver on his pledges to rekindle Wales’ productivity levels, a skilled Welsh workforce and business support for economic growth.”
The latest edition of the Quarterly Economic Survey also included questions specific to changes happening in Wales such as the election of the new first minister and the new workplace recycling law.
94% of businesses in Wales had heard about the workplace recycling law which came into effect from 6 April, with 71% aware of the changes and how it affected their business.
Over a quarter (26%) of Welsh businesses were aware of the recycling changes but were unaware of how it affected their organisation and only 3% were unaware of the changes or how it affected their business. These businesses suggested that clarity, simple guidelines and research would help them comply with the new law.
