NEWS

Recruitment static as firms assess NICs

Recruitment at UK firms remained static in the second quarter of 2025 as businesses continued to assess the impact of the rise in employer National Insurance contributions (NICs), says the British Chambers of Commerce (BCC).

The BCC’s latest Quarterly Recruitment Outlook (QRO) showed that 55% of firms attempted to recruit in the last three months, broadly similar to the 54% in the first quarter.

Of those firms trying to hire staff, 73% said they experienced difficulties, a slightly improved picture from the previous quarter.

Labour costs remain the biggest cost pressure for businesses, cited by 73% of respondents, the same as in the first quarter of the year.

Jane Gratton, Deputy Director of Public Policy, at the BCC, said:

"While it is still early days, firms are beginning to sound the alarm on the impact of NICs and other employment costs. There could a big shock coming further down the line.

Increased labour costs and persistent skills shortages are making recruitment a significant challenge for SMEs.

At the same time, growth and productivity is being stymied by persistent skills shortages, particularly in sectors like transport, logistics and construction.

We need urgent action by policymakers to tackle the long running skills crisis. That means a more flexible and responsive training system, better support for people facing barriers to work, and a firm commitment to no further tax hikes on business."

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21/07/2025