Member Article

North West businesses struggling to recruit, as workforce challenges rise up agenda

North West are struggling to recruit post-pandemic, as workforce challenges rise up the list of top concerns, alongside supply chain pressures and rising business costs.

Half of mid-sized businesses in the region (50%) admit they have been unable to replace staff who retired during the COVID-19 pandemic, with data from the Office for National Statistics (ONS) showing a mass exodus of over-50s from the labour market between March 2020 and November 2021. The North West has the second lowest employment rate of people aged 50-64 in England (68.5%), according to ONS. This follows record high UK employment rates of 50-64-year-olds in 2019.

According to BDO LLP’s bi-monthly Rethinking the Economy survey of 500 mid-market businesses, more than a third of regional businesses (34%) admit they cannot recruit enough people.

The survey also found that more than a third of North West businesses (37%) say it’s too expensive to hire staff – pointing the finger at the cost of immigration bureaucracy, National Insurance contributions, and the expectation of higher pay and more benefits during the cost of living crisis.

Currently, the biggest areas of concern for North West businesses is recruitment of entry (64%) and lower managerial levels (45%). As a result, business leaders are taking significant steps to address workforce challenges over the next six months.

Ed Dwan, partner and Head of the North West at BDO LLP, commented: “Time and again over the last three years, we have seen regional businesses thinking outside the box when faced with growing pressures. Workforce challenges are no different, with businesses changing their recruitment practices and offering specific incentives targeted at attracting more diverse talent, as well as exploring new working patterns, such as trialling four-day weeks. The landscape has changed considerably, and a significant number of businesses have flexed to adapt to it.”

The Rethinking the Economy survey also showed that over the next five years, North West businesses intend to invest in upskilling their existing workforce (34%), with nearly a quarter making a concerted effort to reverse the slide in the number of over 50s workers (22%). Similarly, 38% of North West businesses intend to launch new products or services to support business growth in the face of labour shortages.

As workforce challenges add to mounting economic pressures, businesses are turning to technology and automation in order to address operational and productivity shortfalls. The survey found that over the next three years, more than a third of North West businesses (38%) intend to invest in industry specific cloud platforms to accelerate their business initiatives, with half investing in systems to improve cyber security resilience.

Dwan added: “The pressures and knock-on effect of workforce challenges is a worrying concern and one that could significantly impact on business confidence in the coming months if recruitment initiatives and investment in technology don’t begin to bear fruit.

“What is clear from our latest survey is the need for greater support from the Government, to help North West businesses address long-term challenges. Without more targeted intervention from Whitehall, mid-market businesses will continue to struggle in the face of ongoing adversity.”

Topping the list of requests for Government support include incentives for consumers to encourage them to purchase from businesses, such as voucher schemes similar to Eat Out to Help Out, together with more opportunities to access regional ‘levelling-up’ funds.

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This was posted in Bdaily's Members' News section by Ian Jones .