Seven in ten (71%) London businesses that have not recruited early careers talent in the past year say they would do so over the next 12 months if they felt able, according to new research from Lloyds.
The latest Lloyds Business Barometer points to significant untapped demand for young talent across the capital, with businesses highlighting practical barriers around recruitment, training and upfront investment.
Among firms that have recruited early careers talent in the past year, almost all (96%) expect to continue doing so over the next 12 months.
Overall, 49% of London businesses recruited early careers talent during the past year. Of those, more than half (53%) said their recruitment had increased compared with the previous 12 months.
Which factors would increase employer confidence to invest in early careers talent?
When asked what would most increase their confidence to invest specifically in early careers talent, London businesses pointed to a combination of simpler training routes, access to candidates and financial support.
A third (33%) said simpler apprenticeship or training schemes would improve their confidence, while 32% highlighted better access to suitable candidates.
Almost a third (31%) also cited access to finance to manage upfront recruitment and training costs, while 26% pointed to greater certainty over government funding and 25% to stronger links with colleges, universities or training providers.
Businesses confident on funding skills investment
This appetite to recruit is supported by wider confidence in skills investment, with more than three quarters (77%) of London businesses confident they can secure the capital required to invest in training, apprenticeships or new hires over the next one to three years.
Technology-related capabilities feature prominently among the skills London firms expect to need most.
More than a third (36%) identified AI and automation skills as critical to remaining competitive over the next one to three years, followed by digital and data skills at 33%.
Leadership and people management and problem-solving, adaptability and communication were each cited by 26%, while a quarter (25%) highlighted financial management skills.
Internal upskilling drives workforce development strategy
When it comes to addressing anticipated skills gaps, London businesses are taking a practical approach, with internal training and upskilling of existing staff the most common response, cited by 42%.
Almost a third (31%) plan to invest in new technology to reduce their dependence on certain skills, while 28% expect to recruit experienced workers from other sectors.
This research comes after Lloyds announced an investment of £100m in future skills in August as it expanded its support for young people*.
Kirsty Sadler, Regional Director for London at Lloyds, said: “London businesses are sending a clear signal that the appetite to bring more young people into the workforce is there, even among firms that haven’t been able to recruit early careers talent over the past years.
“The focus now needs to be on turning that intent into opportunities. Simpler routes into apprenticeships and training, better connections between employers and candidates, and practical support with the upfront cost of recruitment can all help businesses invest with greater confidence.
“London firms are also preparing for a rapidly changing skills landscape, with AI and digital capabilities high on the agenda. Investing in existing teams while creating routes for early careers talent will be important in helping businesses build the workforce they need for the future.”
The national picture
More than half (52%) of UK businesses have recruited early careers talent in the past year, with the North East leading on recruiting early careers talent at 70% followed by Scotland (66%) and the North West (60%).
Of the companies that hired early careers talent in the past 12 months, 89% expect to recruit more over the next year. That figure rises among South East and London businesses to 97% and 96% respectively.
Even among those that didn’t recruit early careers talent in the last year, 56% say they would do so if they felt able. That figure increases to 75% in Scotland and 71% in London.
Four in five businesses (80%) are confident they can secure the capital required to invest in training, apprenticeships or new hires over the next one to three years. The UK figure compares to the top three nations and regions: 89% in Scotland, 87% in Yorkshire & Humber and 85% in the West Midlands.
On the types of skills that businesses need, customer service and relationship management (33%) was the most cited by businesses, followed by AI and automation (26%) and digital and data (23%).
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Businesses are not simply hiring for today, they are investing in the people who will shape their future. The strength of employers’ appetite for early careers talent is encouraging, but ambition needs to be matched by better access to candidates, clearer routes into training and the confidence to keep investing.
“Technology will continue to transform how businesses operate, and the findings are a powerful reminder that customer facing skills still matter. The ability to understand customers, build trust and manage relationships will help set the best businesses apart.
“Closing the gap between ambition and action will be a joint effort between businesses, government, communities and education providers. By helping businesses find the right people and develop the skills they need, we can build a stronger pipeline of talent and support growth across the UK.”
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