Unemployment has decreased since the ending of COVID-19 restrictions but may rise again as furlough scheme ends
The latest labour market overview from the Office of National Statistics (ONS) for August reports that the number of payroll employees rose by 182,000 in July 2021, although this remains 201,000 below pre-pandemic levels.
Commenting on the survey, Bev White, CEO of tech recruiter Harvey Nash Group, said: “The ONS data shows the jobs market has well and truly bounced back. However, we’re also seeing persistent skills shortages holding businesses back. Two thirds of IT leaders say skills shortages are hampering them. The most acute shortages are in cyber security, Big Data/Analytics and – worryingly for the first time in the top three – DevOps, which is crucial to the fast development of systems and software.”
The REC’s latest Jobs Recovery Tracker reported that there were a total of 1.65 million active job adverts in the UK in the first week of August – the second highest weekly figure since December 2020. There were around 204,000 new job adverts posted in the same week, the fourth highest weekly figure since the start of the pandemic.
The massive uptick in job adverts since the relaxation of COVID-19 restrictions means that employment has increased while unemployment has decreased since the end of 2020. With an approximate 953,000 job vacancies listed from May to July 2021, a record high, vacancy estimates are set to continue to rise. However, as the end of the furlough scheme looms, it remains to be seen whether the decline in unemployment, as reported by ONS, will continue.
Commenting on the ONS figures, Simon Wingate, Managing Director of Reed.co.uk said: “Our data has shown a jobs boom since the initial lockdown restrictions were lifted in April and this continued into July with over 326,000 new jobs posts added – a 179% year-on-year increase. The key challenge for employers now is finding the staff to fill the roles. Increased wages – as witnessed by the ONS data – will go a long way, but people across the country may still be hesitant about changing careers.”
Inflated salaries
The ONS survey highlighted a marked increase in the average total pay (including bonuses) of 8.8% and regular pay (excluding bonuses) increased by 7.4% during April to June 2021. However, it must be noted that the annual growth of the average employee pay is being affected by temporary factors that have inflated headline growth – for example, where there has been a drop in the number of lower-earning employee jobs therefore increasing average earnings during the pandemic.
Matt Weston, UK Managing Director of global recruitment firm Robert Half, said: “The rise in pay rolled employment sits hand in hand with a sharp drop in those using the furlough scheme, indicating continued recovery in the UK jobs market. The increase in median monthly pay also falls in line with the shift towards a talent-driven recruitment market, where candidates have greater influence when agreeing terms with a new employer.”
Harvey Nash CEO Bev White added: “We’ve been seeing a significant uptick in salaries for key IT roles and this looks set to continue. Candidates and targets with the right experience have strong bargaining power, which they’re leveraging. We’ve seen especially pronounced rises for front-end developers and anyone working with data. This isn’t just confined to London and the South East – it’s happening across the country with London-style salaries being offered much more widely, along with flexible and remote working options. Tech talent is essential to an ever-wider number of businesses, but it’s costing them ever more too.”
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