Hiring problems are at record levels as three out of four companies struggle to hire staff, according to the British Chamber of Commerce.
The BCC said approximately 61% of companies were looking for staff during the second quarter, similar to 60% in the first quarter. But 76% reported difficulties.
Some 5,700 companies were surveyed to find that the construction sector faces the biggest challenge, followed by the production, manufacturing and hospitality industries.
BCC policy chief Jane Gratton said: “Companies continue to be under a lot of pressure to get jobs, but record levels of recruitment difficulty show no signs of improving.
“Solutions are urgently needed so that companies can keep their doors open during these difficult times.
“We have written to the government explaining a three point plan on how they can work with companies to fix it.
“Companies should be encouraged to find new ways to unlock talent groups, investing more in training their workforce, adopting more flexible work practices and expanding the use of learning.”
The survey found that less than one in three companies increased investment in the last three months.
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Ms Gratton said: “There are 1.3 million unemployed jobs in our economy and now fewer people in the workforce than before the pandemic.
“This is holding back productivity and growth, and entrepreneurs are at the end of their wits.
“It is putting livelihoods at risk and damaging the economy.
“Employers can’t wait for a new prime minister before this is fixed. Scarcity is affecting not only their ability to handle order books, but also the morale and well-being of their people.
“The economic challenge we face is huge and if we don’t start filling the gap caused by 1.3 million vacancies, we can’t go back to growth.”
The news comes a day after the director general of the Confederation of British Industry, Tony Danker, wrote an open letter to aspirants to the Conservative leadership calling for the priority of economic growth.