UK Business Hiring Rate Fastest in 16 years
The service sector plays a key role in increase of hiring rate and economic growth
Accountancy firm BDO’s latest index for July revealed business hiring intentions have reached a 16 year height, rising from 108.8 in June to 109.6 in July.
The optimistic report cited “a gain in the services sub-sector” as playing an influential role in both the increase in the employment forecast and the growth of the economy. The economy-wide output grew by 0.1 on the index to 103.7.
BDO’s Optimism Index also displayed a slight increase with expectations for the next six months rising from 104.8 to 105.1.
The results suggest that the increase in job creation will continue as businesses expand – providing graduates and job seekers with the best employment market since the recession.
However it also highlights concerns over an impending skills crisis in the UK as small and mid-sized businesses continue to grow rapidly and positions are left unfilled for over a year due to a lack of skilled applicants.
BDO LLP partner, Peter Hemington, discussed the results, warning that the skills shortage needs to be addressed:
“We’re hearing that services firms are beginning to echo manufacturers in voicing their concerns over a shortage of skilled workers and some construction businesses are already turning business away due to a lack of trained staff.
“This could bring the stellar growth we’re enjoying in the wider economy to a grinding halt if the trend becomes entrenched.
“To address this, the Government must ensure its protectionist tendencies are put on hold until productivity returns to pre-crisis levels. Although a new wave of graduates will go some way towards meeting businesses’ needs, readily available and flexible labour from Europe could relieve pressure on businesses in the short term.”