Increasing transport and housing costs mean businesses in London face stiff challenges in recruiting and retaining staff - a unique new survey revealed today.
The London Business 1000 Survey: a joint collaboration from London Chamber of Commerce and Industry and London Councils, found that more than half of businesses (54%) are intending to recruit in the next year.
However they believe it would be much easier if the cost of commuting was lower and housing was more readily available and affordable.
Immigration featured as a major factor, particularly in industries such as accommodation, food, entertainment & recreation services, where 27% felt fewer immigration restrictions would be the main way to ease recruitment difficulties.
When asked about difficulties retaining staff businesses were most likely to list housing (48%), transport (45%) and better government support to offer training programmes (25%) among their top two priorities for action.
The survey of more than 1000 businesses in London is the first in an annual series of reports between London’s leading business organisation and the body responsible for London's local authorities.
The survey also probed business attitudes towards apprenticeships and training, migration and Brexit.
Chief Executive of London Chamber of Commerce and Industry, Colin Stanbridge said:
“This survey provides a wealth of new data about the issues and topics affecting the capital’s business community, focusing on training, recruitment and retention.
“We hope it can provide policy makers with some useful insights so that our governments, at local and national level can make decisions which can make a real difference in areas that concern businesses the most.”
London Business 1000 also found overall just 8% of London businesses are currently employing apprentices.
However 54% of businesses believe there could be benefits of increasing the number of apprentices for the company, with the figure particularly high among construction and property firms (63%)
Cllr Peter John, London Councils’ exec member for business, skills and Brexit, said:
“All London’s businesses play a crucial role in ensuring the success of the UK economy, particularly as we move towards Brexit.
“It is vital that boroughs support them as they take up this challenge, and to support them we must listen to them. This report – the first of three – shows us where the challenges lie; not only in the recruitment and retention of staff, but in overall business confidence, confusion over apprenticeships and concerns around infrastructure and housing.
Boroughs remain committed to developing deeper and more informed conversation with our businesses to ensure that all parts of London’s economy continue to thrive as we rise to the challenge of Brexit.”
Key findings from London Business 1000 included:
Recruitment and retention
- 28% ranked lower costs of commuting/transport as the single most important factor in making recruitment easier. This was followed by 23% who cited better availability and affordability of housing
- Sub-regions: Looking at the top two rankings, businesses in Central London were particularly likely to raise the cost of housing (54%) and transport (49%) as key ways to improve staff retention – compared to 45% or less for both in the other sub-regions. In contrast, businesses in East London more often selected government support for training programmes (33%), compared to 27% or less elsewhere.
Apprenticeships and Training
- Greater financial support is seen as the factor most likely to encourage businesses to take on more apprentices.
- 20% of businesses plan to use apprenticeship funding over the next 12 months following the changes to the way apprenticeships are funded – this is two and a half times as many as currently use apprentices.
- 54% of businesses believe there could be benefits of increasing the number of apprentices for the company – for example easier means of bringing in new staff and addressing skills shortages. A figure of 63% seeing benefits was reported for construction and property firms
- Two in five (40%) London businesses employ EU workers and a quarter (24%) employ workers from outside the EU. Employing non-UK workers is mainly done to access their skills, education or experience.
- The main reason reported by London businesses why they hired high-skilled foreign nationals was the quality of their skills, experience or education (40%).
- Another 12% cited outstanding work ethic while 6% mentioned specific foreign language skills.
- Only a small minority reported a lack of UK applicants with the required skills (3%), experience (2%), and/or a lack of UK nationals applying for the job (5%) as a main reason for hiring non-UK nationals
- Asked about the expected impact of Brexit over the next 12 months, over a third (36%) of London businesses thought it would have a negative impact on their recruitment, while a quarter (26%) said it would negatively impact on their staff retention
- Two in five (42%) London businesses thought that Brexit would have a negative impact on their business growth over the next 12 months, while 29% expected no impact, and 13% thought their business would experience a positive influence