Job vacancies soar as labour market shows signs of recovery
Businesses are creating nearly as many jobs as they were before the coronavirus pandemic began according to figures released by the Office for National Statistics (ONS).
In the latest sign that the UK jobs market is in full recovery mode, businesses created 758,000 vacancies in the three months to May 2021 – just 27,000 below pre-pandemic levels.
This is encouraging because it shows that many companies are thinking about expanding, but it also means that competition for the best talent is tightening.
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According to the latest ONS Labour Market Overview, headline UK unemployment fell for the fourth consecutive month in April to 4.7%.
This represents roughly 1.6 million of the working age population currently looking for work.
The headline employment rate also improved to 75.2%, with an additional 197,000 people added to payrolls in May.
This means there are around 28.5 million people currently in work across the UK.
Moreover, the rate of redundancies decreased from a record 7.1 per 1,000 employees to 4 per 1,000 employees in the latest figures.
These signs of recovery were put down to the reopening of non-essential retail businesses and hospitality venues in April and May, with vacancies in these sectors having risen at the fastest rates since the COVID-19 crisis began.
The release of pent-up demand from consumers eager to shake off their lockdown woes and spend some of their savings was also cited as a major contributing factor.
However, despite the improvements, the number of people on payrolls remains 553,000 below pre-pandemic levels and there are an estimated 1.8 million people still on the Government’s furlough scheme.
The furlough scheme is due to be tapered down from 1 July, when employers will be asked to contribute 10% of their furloughed employees’ wages, followed by 20% in August before the scheme comes to an end altogether in September.
Currently, the Government is paying 80% of the normal monthly salary of all furloughed workers.
The Bank of England’s latest forecast is for UK unemployment to increase to 5.5% by the end of the year as the furlough scheme comes to an end.
Debapratim De, Senior Economist at Deloitte, said: “With payrolls up for the sixth straight month in May, unemployment in decline and a continued surge in vacancies, the UK labour market is tightening rapidly.
“Last month’s easing of lockdown restrictions has been a major contributor to this, boosting hiring in the hospitality and accommodation sectors.
“But there is still a long way to go before a full recovery. Despite recent rises, total hours worked and payrolls remain well below their pre-pandemic levels.”
Jonathan Boys, Labour Market Economist at the CIPD, added: “Seeing redundancies return to pre-COVID levels suggests that for the bulk of the economy most of the pain has passed.
“Unemployment continues to fall, buoyed by strong demand for labour, and most industries are showing vacancies above pre-pandemic levels.
“The 265.5% quarterly growth in hospitality vacancies hints at the strength of the bounce back in some sectors. The struggle to find staff is a boon to some workers and a headache for some employers.”
- The Coronavirus Job Retention Scheme (CJRS) is being tapered down from 1 July before being wound up in September. More information about the changes can be found here: https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme
- Employers can register to take part in the Kickstart Scheme until 31 December. Sign up to hire a 16-24-year-old young worker for free here: https://www.gov.uk/government/collections/kickstart-scheme
- For more information about running a business, head over to the UMi platform: https://www.weareumi.co.uk/webapp/.