Local businesses are hiring despite difficulties in finding workers

The job market showed contrasting trends in the 1st half of 2022. While less than a third of local businesses recruited one or more employees, more than half of the contracts signed were open-ended. Despite difficulties in finding workers, very small businesses are hiring.

Business buoyed by a rebound in household consumption

The U2P employment barometer published exclusively by Les Echos shows that activity was more buoyant in Q2 2022. It has to be said that the 1st quarter was marked by the Omicron wave, the outbreak of war in Ukraine and accelerating inflation.

In April and June, the situation improved for hotels, cafés and restaurants, which achieved the highest hiring rate among local businesses. This was 31% for the period January to June. This is mainly due to a rebound in household consumption, but also to the upturn in the summer period. On the other hand, other sectors such as the building trades and local food retailers saw their hiring rates fall, from 14% to 12% and 19% to 18% respectively.

Improved quality of recruitment

Another finding of the U2P employment barometer is the improvement in the quality of new hires over the first part of the year. This shows that 53% of employment contracts signed are open-ended, marking a 7-point improvement on the previous 6 months.

Despite this trend, companies are reporting recruitment difficulties. When questioned on the subject, most cited a lack of applicants and a lack of qualifications. These results are confirmed by other Banque de France studies showing that recruitment difficulties have reached a level unseen since the institution began measuring this phenomenon. Against this backdrop, 65% of managers have decided to increase salaries this year. Those who have not done so cite the company's lack of financial capacity.


A complicated end to the year

The U2P barometer "Local businesses are hiring, but recruitment difficulties persist" reports that only 12% of businesses plan to recruit in the 2nd half of 2022, a figure that reflects the caution of SMEs faced with the prospect of no business growth, and concerns about a downturn in activity.

These factors have also had an impact on business morale, which, according to INSEE, fell by one point in July. The institute explains that this slight deterioration is also linked to rising inflation, the repercussions of the war in Ukraine, labor shortages and supply difficulties. Nevertheless, the business climate indicator remains above its long-term average of 103.