Half of UK businesses have faced skills or labour shortages in the last year but only a minority are looking overseas to fill the gaps, a survey says.
Of more than 1,400 business people surveyed by the British Chambers of Commerce, 48% had faced labour or skills shortages at their firms in the past 12 months.
Around 35% of those tried to address the shortage by increasing investment in recruitment, 31% invested more in training, while 29% increased pay and benefits.
Only 8% looked to recruit overseas, the survey found.
Of the businesses surveyed, 94% were SMEs, 29% operate in the manufacturing sector, and 71% operate in the services sector.
Four in 10 businesses surveyed have employees from other EU countries and 23% have employees from outside the EU.
Around 38% say future restrictions on the rights of EU nationals to work in the UK would have a negative impact on their business.
The BCC used the results to call on the Government to provide clarity on the process for hiring EU citizens during and after the Brexit process.
It also said the UK’s future immigration system should respond to the UK’s economic needs, ensuring companies have access to the skills they require.
Jane Gratton, head of business environment and skills at the BCC, said: “Many of our businesses benefit from having a diverse workforce with staff members from across the EU and beyond, bringing with them a range of skillsets.
“As the Brexit negotiations unfold, businesses will be paying particular attention to future agreements regarding the movement of EU nationals.
“A significant minority of UK firms say they will be negatively affected by restrictions to this pool of talent.
“As the Migration Advisory Committee looks at the UK’s immigration system going forward, it must bear in mind the needs of businesses.
“Firms are already struggling to fill vacancies, so drawing a line in the sand purely for the sake of it, will only exacerbate the issue and slow economic growth further.”