Job vacancies in the UK leapt in April to June 2021, reaching almost 10% above pre-pandemic levels, figures from the Office for National Statistics (ONS) show.
The number of vacancies, an estimated 862,000, reached its highest in 15 months in the last quarter. This was 9.9% above the figure for January to March 2020 and 38.8% higher than January to March 2021.
The number of people on payrolls also grew, showing the biggest rise since the start of the pandemic. This figure increased by 356,000 in June to 28.9 million, however, the ONS said this was still 206,000 below pre-pandemic levels.
Redundancies also decreased on the quarter and have returned to pre-pandemic levels. The redundancy rate per 1,000 employees was 3.8 in March to May 2021, compared with 14.4 in September to November 2020.
Jonathan Boys, labour market economist for the CIPD, said: “This is an incredibly strong set of labour market figures. Unemployment isn’t quite at pre-pandemic levels but is heading in that direction fast.
“On some key metrics we are already back to pre-pandemic levels, notably vacancies and redundancies. The dramatic rise and fall of the redundancy rate suggest that the end of furlough will be a smooth transition that won’t result in too many job losses. Indeed, any anxiety over job losses has been replaced by a fear of skills shortages. These are biting hard in some sectors, notably hospitality which has a record number of job vacancies as businesses scramble to reopen hoping for a bumper summers trading.”
The arts, entertainment and recreation sector saw the largest percentage recovery in vacancies, a 330% rise on the previous quarter, as organisations in this sector scrambled to find staff as lockdown restrictions were lifted.
Accommodation and food service vacancies increased the most, by 73,400 on the last quarter to 102,000.
A 25% fall in vacancies was recorded in the public admin and defence, compulsory social security sector – the only sector to see a drop in April to June.
Boys said that employers will have to work harder to attract and retain talent in a tightening labour market.
“Paying more is one solution; with skills shortages and inflation starting to bite, workers will be able to demand more money. However, in the long-term, investing in training and skills can ensure robust talent pipelines,” he said.
Although he said all signs were pointing to continued labour market recovery, Recruitment and Employment Confederation chief executive Neil Carberry said skills shortages continued to bite in numerous sectors.
“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,” said Carberry.
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” – Neil Carberry. REC
“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.”
Stephen Evans, chief executive of the Learning and Work Institute, said the removal of the furlough scheme in the autumn could hamper recovery, “The continuing easing of restrictions is likely to aid recovery in the months ahead, but the end of furlough in the autumn means full labour market recovery is likely to take years.
“Some employers report difficulties recruiting, showing we need to increase support for people to look for work. We need to avoid an uneven recovery with some areas and groups missing out,” said Evans.
The furlough scheme began to wind down on 1 July, with the government covering 70% of furloughed employees’ wages and employers paying 10%. On 1 August, the government’s contribution will be reduced further, to 60%, with organisations required to cover 20%.
Anoushka Kenley, research and policy director at Pro Bono Economics, said: “We haven’t reached the promised land yet. Charities are straining to support those hardest-hit by the pandemic’s economic damage. Long-term unemployment is continuing to grow and many sectors employing young people, such as retail and hospitality, are still dragging below pre-pandemic employment levels.”