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Brexit and minimum wage increase means fewer staff hired and less firms invest in training in Kent says Quarterly Economic Survey

By Chris Price

Concerns about Brexit and the rising minimum wage potentially led to a reduction in businesses hiring new staff and investing in training in the first three months of the year.

At 18%, the proportion of Kent Invicta Chamber members who had grown their workforce in the past three months was the lowest for nearly four years.

Seven in 10 said their workforce was unchanged and would stay unchanged in the three months ahead, although more than a quarter expect to hire staff.

The number of new staff being hired dropped in the first three months of the year

The number of new staff being hired dropped in the first three months of the year

“Whether this was due to caution about possible Brexit, or a more fundamental cause such as the new minimum wage is too early to say,” said the Chamber in its Quarterly Economic Survey.

For the first time in a year, fewer than half of respondents had tried to hire anybody in the past three months.

More than eight in 10 said they found it difficult to find suitable applicants.

Jack Hooker, business development manager at Shred First UK, based in Gravesend, said: “It is difficult to find the right people. We have hired a new person this year but we have found some of the recruitment agencies produce people who are not right for manual work.

The latest survey covers the first quarter of 2016

The latest survey covers the first quarter of 2016

“We are struggling to find skilled people. It potentially could hold us back in the future if we expand quickly. We could be stuck.”

The report found 16% of members said investment in training had got worse in the first quarter of 2016, which has doubled since the same time a year earlier.

However, 21% said it had improved, although that figure has shrunk consistently since 35% reported improvement in the last three months of 2014.

The 19% cutting their planned investment in equipment is the worst figure for three years.

In the first three months of the year, fewer firms increased their employment and more firms said it had declined

In the first three months of the year, fewer firms increased their employment and more firms said it had declined

More than half of firms have not tried to hire new staff in the last three months

More than half of firms have not tried to hire new staff in the last three months

More than four fifths of businesses said it is getting harder to hire new staff

More than four fifths of businesses said it is getting harder to hire new staff

The report said: “As in employment, so in plans for investment in training and equipment, caution is the watchword, even more in this quarter than throughout the previous 12 months.

"With cost inflation increasing, and uncertainty over Brexit, the wise are planning warily.”

Jane Ollis, managing director at RIFT Accountants, based in Ashford, said: “For companies that are exporting, I expect the EU is having an impact.

"Some companies are getting around that by bypassing the EU and exporting to the US or Israel.

More businesses are cutting investment in training

More businesses are cutting investment in training

Nearly one in five members said they planned to invest less in kit

Nearly one in five members said they planned to invest less in kit

“I always expect people to keep an eye on costs and overheads. Training is one of the first items which gets reviewed if you are struggling but investing in your people is part of your route to success.

“Firms need to be careful because businesses are their people. You don’t invest in them at your peril.”


More on the Quarterly Economic Survey

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