The number of job vacancies in the UK has now surpassed pre-pandemic levels, with falls in redundancy and unemployment levels also pointing to much brighter prospects for UK workers than was the case a year ago.
The latest figures from the Office for National Statistics (ONS) showed that there were 862,000 vacancies in the April to June period, 77,500 more than in January to March 2020.
The ONS also reported that redundancy rates had fallen back to pre-pandemic levels during the quarter, with the unemployment rate falling 0.2 percentage points to 4.8%.
However, the number of payrolled employees has only risen above the levels seen before the first lockdown in some regions – the North East, North West, East Midlands and Northern Ireland.
Across the UK as a whole, while the number of employees rose 356,000 in June to 28.9 million, this figure remains 206,000 below February 2020 levels, suggesting that while there may be a high number of vacancies, some are going unfilled.
Indeed, Neil Carberry, Chief Executive of the Recruitment & Employment Confederation (REC), said: “Demand for staff is incredibly high right now, and recruiters are working flat out to fill roles – but serious worker shortages across the economy threaten to slow the recovery, especially in sectors like logistics, hospitality and IT.
“Firms need to be thinking hard about their offer to potential employees at a time like this, and government can support them by addressing long-standing business concerns about how the skills system supports our economy.”
‘Stick rather than twist’
Some of the shortages have come about due to the rapid reopening of the UK economy, but Tania Bowers, Legal Counsel and Head of Public Policy at APSCo, said there are also other factors at play.
“Aside from the struggles that staffing companies faced as hiring stalled at the beginning of the pandemic, available talent pools have also been impacted by both Brexit and the roll out of Off Payroll earlier this year.
“Temporary resources play a critical role in filling both sudden spikes in demand and resourcing gaps, but this segment of the workforce has been significantly impacted as IR35 was rolled out and the ability to tap into European contingent resources became unnecessarily complex following the UK’s exit from the Bloc.”
Emotional factors are also playing a part, added Kieran Boyle, Managing Director at CBK Recruitment: “We’ve found the candidate side of the market is as quiet as we have known, with very few people actively looking to make a move at present.
“The pandemic has created a safety first mindset, with people choosing to stick rather than twist. In certain sectors of the market, such as insurance, there are a phenomenal amount of vacancies, which has pushed salaries up as firms compete to nab what little talent there is available.”
Vacancies would seem to be leading to pay increases in other industries as well, with the ONS data showing that growth in annual average pay for the March to May period was an inflation-busting 7.3% for total pay and 6.6% for regular pay (excluding bonuses).
However, the ONS noted the rises were perhaps not quite as impressive as the first appeared: “Annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate. These are compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs so increasing average earnings and base effects where the latest months are now compared with the start of the coronavirus pandemic, when earnings were first affected and pushed down.”
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