London firms turn to hiring part time workers
Businesses across London have turned to hiring more part-time workers ahead of a hot summer, with higher employment taxes prompting owners to offer more flexible work.
A new survey by the London Chamber of Commerce and Industry (LCCI) has found that the capital city’s economy was in recovery mode, with sales rising and cash flows improving.
Firms are also beginning to hire more workers, with the proportion of businesses hiring for part-time roles increasing from 36 per cent in the first quarter of the year to 56 per cent in the second quarter.
Businesses remain hesitant about hiring more workers, with just 15 per cent of respondents reporting their workforce size had increased while a third said they were recruiting people.
The shift in employment trends was in part due to rising costs due to energy bills and expensive raw materials, making inflation the top concern among businesses in the second quarter of the year.
The lowering of the salary threshold to £5,000 for the top rate of employers’ national insurance contributions (NICs) has also hit businesses across the capital, pushing recruiters to adjust workforce plans.
Just over a quarter (28 per cent) of firms in London expected the city’s economy to grow in the next 12 months, with larger firms more confident about their performance than smaller businesses.
“Businesses are still weathering rising costs and labour shortages, particularly smaller firms that are taking a cautious approach to investment and scaling-up opportunities,” said Liz Giles, policy director of the LCCI.
“The real challenge for the government is restoring business confidence.”
London steps ahead
A separate growth tracker by NatWest showed that London outpaced most regions across the country, coming behind the South West and East of England, while job platform Morgan McKinley suggested vacancies ticked up by three per cent in the second quarter of the year.
Morgan McKinley’s new report suggested fintechs in London were most excited about hiring new workers, seeing a 72 per cent rise in hiring in 2025.
But Mark Astbury, director at the talent agency, said firms had directed more investment towards technology, including artificial intelligence, which has been blamed for a slump in entry level roles.
The wider UK labour market is quickly weakening, putting Bank of England Governor Andrew Bailey on edge ahead of the next interest rates decision in August.
Fresh labour market data is set to be published in a week’s time, with recent months showing unemployment creeping up to 4.6 per cent and wage growth slowing down to 5.2 per cent.