Chambers Wales South East, South West, and Mid’s latest Quarterly Economic Survey found 17 per cent of businesses in Wales increased their workforce size in the last three months, with the same percentage expecting further growth in the next quarter.
However, 24 per cent foresee a decrease in their workforce, up from 15 per cent in the previous quarter.
Fewer businesses attempted to recruit in the final quarter of 2024, compared to Q3, and 65 per cent of those who did faced difficulties, particularly for professional, managerial, skilled manual, and technical roles.
The survey also included questions about the proposed increase in the National Minimum Wage and National Living Wage from April, and whether these changes would impact staffing plans, especially regarding the hiring of young people.
Around half of the respondents said the increases to £10 and £12.21 an hour for the minimum wage and living wage respectively would not affect their business.
However, some businesses suggested they would have to halt recruitment plans, approach recruitment with caution, or increase their service prices.
Many businesses also expressed hesitance to hire young people, with plans to reduce recruitment numbers in 2025.
Gus Williams, interim CEO at Chambers Wales South East, South West, and Mid, said: “Taxation has become the external factor causing the most concern for businesses in Wales and the measures announced in the budget such as the increase to employers’ national insurance contributions, combined with rising labour costs and changes to employee rights, have not surprisingly driven those concerns.
“As businesses review their budget planning in preparation for upcoming changes, more support is needed to tackle barriers to growth such as access to skills development and learning pathways.”
