Half of London firms still struggling to recruit, new BusinessLDN survey finds

• Poll of 1,200 London firms shows proportion with open vacancies increasing to eight in 10
• More businesses reporting skills gaps within existing workforce compared to 2023, with advanced digital and sector-specific technical skills most sought after over next two to five years
• Close to three-quarters planning to increase investment in training over next 12 months; half say cost is a barrier to engaging with training for staff

Firms across London are set to up their investment in training this year as they face significant skills gaps within the capital’s workforce, with many still struggling to recruit. That’s according to the latest figures from leading campaign group BusinessLDN.

Its survey of over 1,200 London business leaders and HR Managers by Survation finds that the vast majority (80%) have open job vacancies (up from 77% last year) versus around a fifth (19%) who report having no vacancies (down from 21% in 2023). 

Although there are signs that the labour market is loosening since last year’s survey, half of respondents (49%) are still struggling to fill vacancies (down from 65% last year). The same proportion report no issues with recruitment.

Most firms (62%) say they have the skills and capabilities within their existing workforce to meet business needs – a broadly similar picture to last year – though more than a third (38%) report skills and capacity gaps (up slightly from 34% in 2023). 

The latter is driving an increase in investment in training among close to three-quarters (73%) of firms over the coming year (up from 64% last year) versus 22% who expect to maintain current levels of investment in training – only 3% are planning a decrease.

The findings come a year on from BusinessLDN joining forces with the other employer groups in the capital – the Federation of Small Businesses London, London Chamber of Commerce and Industry, and CBI London – to deliver London’s Local Skills Improvement Plan, a comprehensive plan for better matching the skills businesses need with those being delivered by the education system.   

BusinessLDN Policy Delivery Director for skills Mark Hilton said:

“Although the picture has improved since last year, far too many businesses across the capital are still being held back by chronic skills shortages.

“The good news is that firms are investing in training and upskilling their existing workforce, but further action is needed to enable them to access the skills they need to grow the economy.

“That’s why we’re calling for a dedicated London Careers service to act as a one-stop shop for jobseekers of all ages, as well as greater collaboration between business and education providers to co-design courses, particularly more bite-sized modular training.”  

Detailed findings from this year’s survey show that:

• The majority (57%) of participants cite a low number of suitable applicants with required skills as a primary driver of recruitment challenges, ahead of other barriers such as competition from other employers (44%), lack of a flexible working offer (42%), unsociable hours (39%) and not enough interest in roles (25%).  
• A lack of work experience is flagged as the number one reason for unsuitability of job applicants, with two thirds of participants (67%) highlighting it as an issue, ahead of a lack of qualifications (59%) and lack of required attitude, motivation or personality (58%).    
• Firms in the construction (92%), financial services (88%) and information & communication (87%) sectors are more likely than average to have vacancies.   
• The skills firms are most lacking in are: sector specific technical skills (cited by 52% of respondents), followed by cross-cutting transferable skills (43%), basic digital skills (34%), green skills (25%), basic math skills (25%) and English skills (25%).  
• More than half of participants say they find it hardest to recruit for professional and highly-skilled specialists (55%) as well as technical and skilled support roles (51%). Smaller proportions face challenges in hiring for skilled trades (43%), sales and customer service roles (32%) and elementary roles (26%).   
• When asked about barriers to engaging with training for staff, half of respondents flagged cost as an issue (52%) and more than a third cited availability of time (41%), relevance or quality of local training (36%), knowing where to find the right training (35%) and location of training (34%). Only one in ten (11%) stated that they face no barriers to training.  
• Looking to the future, businesses see advanced digital (54%) and sector specific technical skills (47%) as the most needed over the next two to five years. Fewer participants named basic digital skills (34%), cross-cutting transferable skills (33%), basic maths skills (27%), English skills (26%) and green skills (24%) in this category.