The number of vacancies hit 1.1 million in July to September 2020 – a new record and a 20-year high – but the UK employment rate was still below pre-pandemic levels.
This was the second consecutive rolling quarter where the average number of vacancies has risen above 1 million, with 12 of the 18 employment sectors monitored by the Office for National Statistics recording a record number of job openings.
The wholesale and retail trade; repair of motor vehicles and motorcycles sector experienced the largest quarterly increase in vacancies, up by 35,000 jobs (32.4%) on the previous three months.
In total there were 3.7 job openings for every 100 employee jobs – also a record high.
However, there were signs that demand for staff has begun to slow down in some sectors. Last quarter the ONS saw a 38.9% increase in vacancies compared to the previous three-month period, but in July to September it only saw a 27.7% rise.
Although all sectors saw an increase in the number of job openings, the highest rate of growth was seen in transport and storage which recorded a 56.1% surge in vacancies (18,500 jobs).
Gerwyn Davies, senior labour market adviser at the CIPD, suggested that “virtually all” of the jobs created since the onset of the pandemic are temporary, with the number of temporary workers up 136,000. For many, these temporary jobs will be involuntary.
“This has adversely affected women, who account for the majority of the increase (up by 82,000 or 41%). This growth in ‘contract working’ is mainly due to an uncertain business environment and the need to fill temporary shortages caused by self-isolation. This may also partly explain why inactivity rates remain relatively high,” he said.
Despite more than one million vacancies being posted, the UK employment rate in June to August was 1.3 percentage points lower than before the Covid-19 pandemic, at 75.3%. The unemployment rate was estimated at 4.5%, 0.5 percentage points higher than before March 2020, and the economic inactivity rate was 21.1%, 0.9 percentage points higher.
Davies said that more applicants would be attracted to roles if employers offered better conditions, not just higher wages, “This would ideally include permanent contracts and the possibility of promotion, especially in low-paying sectors, where this is viable,” he said.
It is likely that demand for staff could rise to another record high, said Recruitment and Employment Confederation chief executive Neil Carberry.
“Recruiters are placing more people into work than ever, and temporary workers are at their highest since 2016. But competition for staff is fierce. Our own figures for the month of September back up the ONS data showing salaries are on the rise, especially in sectors where shortages are most acute,” he said.
“It’s vital that government works with business to put policies in place that help deliver sustainable growth and drive up UK’s productivity and prosperity levels. That means investing in skills, especially at lower levels, supporting younger people into work, and helping firms to compete internationally.”
The number of people who have been unemployed for more than six months is now 191,000 up on pre-pandemic levels. This includes 20,000 young people, while disabled and ethnic minority job seekers are also likely to face significant challenge” – Anoushka Kenley, Pro Bono Economics
Anoushka Kenley, research and policy director at Pro Bono Economics, said it was promising that there were now just 1.6 unemployed people for every vacancy, down from a peak of 4.1 in June 2020.
“But this recovery continues to leave many behind,” she said. “The number of people who have been unemployed for more than six months is now 191,000 up on pre-pandemic levels. This includes 20,000 young people, while disabled and ethnic minority job seekers are also likely to face significant challenges.”
Many 16 to 24 year olds had been affected by pandemic job losses and subdued hiring activity last year, but over the last quarter the ONS identified a record increase in the employment rate and decreases in the unemployment rate and inactivity rates for young people.
Total actual weekly hours worked increased by 39.9 million hours from the previous quarter, to 1.02 billion hours in June to August 2021.
Joanne Frew, head of employment law at DWF, said the UK’s economic recovery is likely to remain stable if the government’s Plan A, as detailed in its Covid-19 response autumn and winter plan, comes to fruition and restrictions are not introduced again.
“With the Coronavirus Job Retention Scheme officially closed from the end of September 2021 we are yet to see the impact on the labour market; on a positive note the latest ONS figures show the redundancy rate remains at pre-pandemic levels,” she said.
“The government has launched a £500 million Plan for Jobs expansion in the hope of mitigating the impact of the end of furlough. Although clearly a step in the right direction, it may be too little too late for some of the hardest hit sectors, such as the travel industry.”