- New Survation poll of more than 1,000 London firms shows 82% of firms are running with open vacancies
- Nearly half of those firms are struggling to recruit, highlighting lack of applicants with required skills
- Majority of firms plan to increase investment in training over the coming 12 months to tackle recruitment challenges as demand for advanced digital skills set to hit two-year high
Most of the capital’s businesses have open vacancies, despite official data suggesting the labour market is cooling. That’s according to a new poll of more than 1,000 firms, commissioned by BusinessLDN.
The Survation poll, conducted between 20 – 31 January, finds that that 82% of firms across London have live vacancies, up two percentage points on last year (80%) and five points on 2023 when the survey started (77%).
Firms across the information & communication (90%), financial & insurance (84%), and professional, scientific and technical activities services (83%) industries are most likely to have open vacancies.
Almost half (46%) of firms with open vacancies are struggling to fill them, while 53% report no issues filling posts. This represents a marked improvement on previous years (49% struggling and 49% not struggling to fill vacancies in 2024, with 65% struggling and 33% not struggling in 2023).
Encouragingly, eight in ten firms (80%) are planning to ramp up their investment in training this year to counter skills shortages. Only 4% expect to cut training budgets, with 15% planning to keep them the same. The proportion planning to increase investment has risen year-on-year since the survey launched two years ago, having stood at 73% last year and 69% in 2023.
The polling, carried out as part of BusinessLDN’s leadership of the government-backed London Local Skills Improvement Plan (LSIP), coincides with the London Employment and Skills Summit taking place today (20 March). The LSIP is a comprehensive plan for better matching the skills businesses need with those being delivered by the education system, developed in partnership with the Federation of Small Businesses London, London Chamber of Commerce and Industry, and CBI London, with the backing of the Mayor of London and funded by the Department for Education.
Mark Hilton, Policy Delivery Director for People and Skills at BusinessLDN, said: “London’s labour market is cooling following the autumn budget as the impact of next month’s hike in employer national insurance contributions filters through but many firms across the capital are still struggling to find the right staff, especially in fast-growing sectors like tech, financial services and life sciences. With businesses crying out for a mix of digital and sector specific skills, more are planning to invest in training to upskill staff and bridge the gap.
“With the Mayor and the Government both focused on breaking down barriers to opportunity to boost growth, it’s vital that businesses, education providers, City Hall and Whitehall all work together to unlock the full potential of Londoners from all backgrounds. That should include online, flexible and short modular courses, co-designing more training with industry and setting out a roadmap for implementing the new Growth and Skills levy.”
Other key insights from this year’s survey:
- When asked about barriers to recruitment, businesses are most likely to highlight a lack of applicants with the right skills (62% compared to 57% in 2024 and 2023) as a challenge, ahead of competition from other employers (47% compared to 44% in 2024 and 40% in 2023), lack of a hybrid work offer (45% compared to 42% in 2024 and 37% in 2023 ), jobs entailing shift work or unsociable hours (37% compared to 39% in 2024 and 31% in 2023), or lack of interest in roles (27% compared to 25% in 2024 and 31% in 2023).
- A third (34%) of firms say they have some gaps in skills and capacity among their current workforce, whilst 63% say their existing workforce has the skills it needs. The figures are in line with findings from last year (35% and 62% respectively).
- When asked about which skills and capabilities they are currently lacking, firms are most likely to highlight sector specific technical skills (57%) followed by cross cutting transferable skills (44%), basic digital skills (35%), English skills (22%), green skills (21%) and basic maths skills (20%).
- Looking ahead, firms are most likely to highlight advanced digital skills as the area where they will be most in need over the next two to five years. Two thirds (66%) say they will require talent in this area over that timeframe, a jump from 54% in 2024 and 56% in 2023. That compares to smaller proportions expecting a need for sector-specific (55%), cross-cutting (41%), basic digital (34%), basic maths (30%), green (25%) and English (25%) skills.
- The cost of training (52%) is highlighted as the top barrier to engaging with full and part-time training for staff followed by time availability (48%), relevance or quality of local courses (43%), knowing where to find the right training (37%) and location of training (32%). Only 10% of firms said they “don’t have any barriers” in this area.
The findings follow release of the Greater London Authority’s new Growth Plan for the capital – which commits to development of an Inclusive Talent Strategy – as well as the Government’s Digital Inclusion Action Plan.
BusinessLDN recently released a report calling for digital skills to have a prominent role in the GLA’s new growth plan, greater devolution of power over skills funding, and a new public-private partnership to aid advanced digital skill development.