It may be the hub of the financial world in the UK and be home to over 8 million inhabitants, but it seems that employment levels have begun to take a nosedive in England’s capital.

Figures provided by Capital 500, a quarterly London survey, has revealed that 57% of companies that are trying to recruit are encountering difficulties with professional and managerial roles along with skilled, technical roles, being the hardest to recruit for.

So, what is contributing to the slowing down of recruitment and how will the capital bounce back from this period of decline?

The difficulty to employ foreign workers

London is heavily reliant on foreign workers, with around one in six of those employed in the city being EU nationals. The reliance on these individuals can be seen heavily in industries such as hospitality.

Take international sandwich chain Pret a Manger for example. At present 65% of their staff are from EU countries not including the UK.

Unfortunately, the government has been making it increasingly hard for businesses to hire workers from overseas, and it is anticipated that this will get worse following the end of free movement post-Brexit.

The skills shortage

While skills in digital were once seen as a necessity, it is now regarding as an absolute must for most businesses in the city. Last year the British Chambers of Commerce warned that more than 75 per cent of businesses face a digital skills shortage and this problem is set to get more serious, especially with Brexit just around the corner.

If businesses in the capital don’t upskill their current workforce or do more to try and recruit those with a relevant digital skillset, the UK may struggle to assert itself on the world stage after departing from the EU.

Another industry facing a severe skills shortage is construction. The skills gap has been hitting SMEs at the worst possible level and with more than two thirds struggling to hire bricklayers, it seems that the government’s plans to build 300,000 houses every year may fall flat.

The rise in automation

With employers choosing to invest in software and machinery to automate jobs as opposed to wages, the rise in automation may be one of the main factors causing employment levels to halt.

While the rise in automation does put a number of jobs at risk, it may also help to create some, especially ones centred on social and creative intelligence.

Analysis by Centre for London has indicated that new jobs are most likely to be created in industries such as finance and insurance, and information and communication, all of which are specialisms for the capital. 

As the property market in the UK continues to teeter on unstable grounds, many investors are making surprising decisions about where to buy property. 

With house prices continuing to inflate across London and the wider south-east, many are now turning their attention to the north. With infrastructure improvements taking place and HS2 doing more to heighten the appeal of Northern cities, it’s no surprise that investors are flocking to these corners of the country.

While the north is growing in popularity and house prices in London fell last year, that doesn’t mean to say that there aren’t parts of the capital with potential for investors.  

Read on to find out about some of the hotspots in Britain for investors and developers.

Manchester

It’s been hailed as the London of the north and is now the fastest growing city outside of London, surely meaning it’s about to strip Birmingham of its second city title. Areas such as Fallowfield, Salford, and Chorlton can all offer investors good ROIand the high levels of regeneration going on in the city are sure to mean that graduates and other millennials will be encouraged to flock here.

Wood Green, London

Situated in North London, Wood Green is an area that will soon undergo a development worth £3bn, creating 4,000 new jobs in the process. Other progressions in the area that are sure to make it a breeding ground for investors include the fact that is has been shortlisted for a Crossrail 2 station and is only a short 15 minute journey from King’s Cross on the tube. Boasting excellent transportation links and the promise of new jobs means developers would be crazy not to consider this area.

Birmingham

While it may no longer be the second city with Manchester hot on its tail, it’s certainly still the second largest city in the UK. Situated in the heart of England, Birmingham is home to a whopping four and a half million people.

Its brimming economy, currently worth around £90 billion, will also grow significantly following the implementation of the HS2, which will slash journey times to London to just 50 minutes.

Popular areas in Birmingham include Edgbaston and Halesowen, both of which are packed with highly sought after terrace housing.

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Whether you’ve heard of the flat white economy or not, it’s a notion and idea that has, for some years, been changing the landscape of business and development in the UK, and things could be set to shift even further.

The phrase was originally coined by Professor Douglas McWilliams in his book, The Flat White Economy: How the Digital Economy Is Transforming London and Other Cities of the Future, but what does it really mean and how much of an impact is it likely to have on the future of business?

Where does the phrase come from?

You may be able to work it out for yourself, but if not we’re here to spell it out for you anyway. The flat white economy refers to the millennial generation of young workers that are operating in sectors such as media, internet and creative business.

In terms of characteristics, they have been defined as having traits similar to what many of us consider to be ‘hipsters’. They are greener and more ethical, are less concerned with materialistic belongings and are, according to some, set to represent the future of British prosperity.

Could this be true? Is the rise of digital and its associated players going to be what will matter for business in the future?

Forecasting trends

It has been suggested that by 2025, the Flat White Economy will contribute 15.8% of GDP, which would make it the single largest sector in the whole of the UK.

While the rise in digitalisation means that this suggestion isn’t entirely implausible, it’s also important to consider the fact that forecasting digital trends so far in advance is tricky. The industry is constantly changing and adapting, so how can we possibly know what will happen in so many years’ time?

How the Flat White Economy can benefit businesses

If you look to Old Street in East London, cheaper rental spaces meant that internet-based start-ups were attracted, which in turn resulted in more coffee shops, bars and restaurants.

The spending habits of millennials, or more specifically their habits regarding saving, means that more young people are choosing to spend their money on experiences, for example brunches and nights out in trendy bars, as opposed to saving.

This is good for both the economy and businesses, as it encourages creativity and forces business owners to strive for more excellence. 

The single market benefits businesses when it comes to the movement of goods, services and people within the UK.

The single market, which is often referred to as the internal market or common market, is at the heart of what the EU stands for but thanks to Britain’s vote to leave the EU, the country’s trading relationship with Europe is up in the air, with many sceptical about what the future of trading will be like.

The benefits for businesses

When it comes to accessing the single market, businesses must accept all of the four EU freedoms – movement of goods, capital, services and people.

These four freedoms are intended to drive prosperity and because the EU is a customs union, its members impose common tariffs on imports from non-EU countries and can trade freely with each other.

Because of this, members of the EU are benefiting from trade deals that the EU strikes with other countries, but they cannot set their own tariffs.

In order to create an internal market that is fair and all-encompassing, the EU has committed to a common regulatory framework. This works by preventing a single company or country from gaining a competitive advantage as a result of getting rid of regulations.

The situation in London

The single market deals predominantly with goods, while the London economy is mainly service based. Because of this, many that it has little or no impact on the London economy, but this simply isn’t true.

1.  The single market is associated with migration and the free movement of labour, something that is of great importance to the London economy. 13% of London’s total workforce was born in the EU, and this figure has doubled over the past ten years.

2.  The single market is developing rapidly in the area of finance, which is, of course, of particular importance in London.

3.  At present, many markets are only affected in a minor way, but this could be set to change dramatically over time. For example, The Digital Single Market is likely to be of increasing importance over time as the issue of regulation of the tech giants becomes a major issue of political focus.