THE number of businesses looking to take on more staff has dropped to its lowest level for a year, figures suggest.

Manpower says its Employment Outlook Survey for the south west has dropped to plus two per cent for the last quarter of this year, down from plus nine per cent for the third quarter of 2015.

That leaves the region lagging behind the national average of plus four per cent.

Manpower has claimed the approach of the government’s planned National Living Wage is already hitting hiring intentions.

Krissie Davies, operations director at Manpower UK, said there were some positive signs in the south west jobs market but added: “|Employers are facing real challenges in attracting and securing the right talent. In-demand candidates are aware of their value and are becoming increasingly reluctant to travel long distances for work.

“Employers should consider what flexibility they can offer as this could become a deciding factor for employees, both existing and prospective. Pay is also proving a challenge for organisations looking to hire new talent, as existing employers are often willing to counter offer in order to retain employees considering a move.”

Ian Girling, chief executive of Dorset Chamber of Commerce and Industry, said: “There is no doubt that whilst the economy continues to grow, businesses still face significant challenges.

“The rate of growth within sectors is not consistent and businesses still face challenges in terms of accessing finance to support growth.

“One major issue we constantly see are recruitment problems; businesses consistently report problems in finding the right staff and businesses need to do all they can to both recruit and keep the right staff.”

Tom Doherty, owner-director of the HR Dept in Poole, said: “Among my range of clients, there certainly are a few that are recruiting. The main thing that tends to come out at the moment is they’re not finding the right people.”

The National Living Age will mean six million people receiving a six per cent pay rise each year until 2020, but the Office for Budget responsibility estimates that the extra costs could mean up to 60,000 job losses.

Manpower says some employers might try to bypass the legislation by relying on younger or self-employed workers, who are not entitled to the new wage.

Manpower says candidates under 25 have been asking why they should be paid less despite doing equal work.