Firms have ambitions to grow, but are held back by a lack of skilled workers and burdensome regulation, new research finds.

A report published by the British Chambers of Commerce (BCC) today reveals that firms with more than 50 employees have ambitions to grow, but are held back by a lack of skilled workers and burdensome regulation. The BCC’s latest Workforce Survey shows that 52 percent of firms want to take on more employees before 2015, with only eight percent looking to reduce staff numbers.

With unemployment expected to peak at 2.77 million in 2012, business is expected to play its part in creating growth and jobs. The research shows, however, that the ambitions held by larger firms to expand and grow their workforce are frustrated by a lack of skilled labour in the UK, and burdensome regulation.

Larger companies rely on migrant workers

Many firms are unable to find the skilled workers they need in the UK. Less than a third of businesses (28%) believe that the UK workforce is more skilled than other EU countries.

The majority (57%) of firms in the UK with more than fifty staff employ some migrant workers. For almost half (47%) of these businesses, the majority of their migrant workforce is from outside the EU.

Therefor the BBC says that business needs a stable visa system which allows firms to recruit from outside the UK if they cannot source the skills they need from the domestic labour market.

John Longworth, Director General of the British Chambers of Commerce (BCC), said: "The government must think business first and give larger companies the confidence they need to create jobs, particularly when unemployment is at a high.

"Many firms are unable to find the skilled workers they need in the UK, and lack confidence in the ability of the education system to deliver the right people for the job. For some, hiring workers from overseas allows them to access the skills they need."

Employment legislation hampers growth

The majority of firms (82%) said they found regulations around sickness absence burdensome. Asked just before the removal of the Default Retirement Age in April, nearly three quarters of firms (73%) said this change would be detrimental to their business. And more than half of companies (54%) said they found dismissal rules either extremely or fairly burdensome. Firms looking to grow their staffing levels by more than 50 percent are more likely to see dismissal rules as extremely burdensome, than those looking to stay the same or downsize.

Almost half of larger firms (48%) have been threatened with a tribunal claim in the past three years. This rises to 69% for businesses with more than 250 employees. Nearly one in four employment tribunal claims were not pursued (23%), wasting the employer’s time and money which could have been better directed at supporting business growth.

Longworth continues: "Regulations, particularly around sickness absence and dismissal rules, are a huge burden on larger firms, at a time when we should be encouraging businesses to expand. These findings bust the myth that large firms can cope with constant changes to employment law and the associated costs, particularly around the tribunal system.

Tribunal reforms must be implemented in full and without delay, and the consultation on introducing a new dismissal route for micro firms must be expanded to include all firm sizes. Larger companies have told us they are ready and willing to grow. The government must act quickly to ensure that businesses can concentrate on generating the growth vital to a successful recovery."