Midlands businesses plan to hire more people to support growth in 2022, according to new research from accountancy firm, BDO.
More than a quarter of medium-sized businesses intend to increase the size of their workforce over the next 12 months, with 18% planning to pay staff more in order to attract and retain talent.
The bi-monthly Rethinking the Economy survey of 500 medium-sized businesses revealed that Midlands companies remain optimistic about recovery post-pandemic, with 38% of businesses expecting to return to pre-COVID-19 revenues within the next 12 months – growth ambitions will be supported by new hires, together with an increase in prices of products and services (35%).
However, a shortage of workers and the rising costs of employment could hamper recovery in 2022. When asked about skills shortages, nearly a third (32%) of businesses in the region stated that finding enough people with the right skill-set was one of their biggest concerns, with a particular challenge around the number of available apprentices.
Two years on from Brexit, 34% of businesses are also concerned about a shortage of overseas workers. This is leading to an increased focus on hiring domestic employees, with nearly a quarter (23%) relying on a greater percentage of UK-based workers this year.
Tim Foster, partner at BDO based in the Midlands, said: “The recruitment challenges facing Midlands businesses are well documented and the war on talent is very real. The task of finding the right people to fill a growing number of vacancies transcends sectors, levels and specialisms.
“However, despite the rising cost of employment, and an impending increase in National Insurance contributions, regional companies are remaining faithful to the importance of investing in people to achieve growth.
“While it’s extremely encouraging to see such optimism within the Midlands business community, both in terms of the speed at which they expect revenues to return to pre-COVID levels and the confidence they have in the rewards of new hires, there is clearly a real job to be done in encouraging more young people to consider the value of apprenticeships, particularly those from a low socio-economic background who may not consider this route a viable option for them.
“The Government’s commitment to apprenticeships through its announcement most recently in the 2021 Autumn Budget, where funding for apprenticeships and the National Skills Fund (NSF) was increased, will undoubtedly help to bridge this gap.”
The Rethinking the Economy survey also found that in 2022 Midlands businesses will look at a variety of different ways to overcome the problem of staff shortages, with 23% admitting that they’ve been able to hire from a more diverse pool of candidates as a result of the rise in remote working.
What’s more, 23% of regional companies intend to introduce a number of new perks in 2022, such as increasing salaries and new joiner bonuses, in order to attract and retain staff.
Foster added: “The pandemic, combined with factors such as rising inflation and Brexit, have forced many Midlands businesses to think outside of the box when it comes to addressing staff shortages and shoring up their workforce.
“The reality is that these factors will remain front and centre for businesses throughout 2022 and it’s vital for companies to continue to rethink recruitment and retention strategies to stay in line with an evolving landscape.”
