The number of job vacancies has reached another record, 1.2 million in September to November 2021, but there are fears the spread of the Omicron variant will cause hiring activity to stall.
There were 434,500 more jobs posted in the last rolling quarter than in January to March 2020, before Covid-19 hit, with only a handful of industry sectors not reporting a record high number of vacancies, the Office for National Statistics (ONS) said.
With the exception of electricity, gas, steam and air conditioning supply, quarterly growth was seen in all industries. The fastest rates of growth were seen in water supply, sewerage, waste management and remediation services (41.7%), and manufacturing (26.0%).
However, on the quarter, the rate of growth in vacancies continued to slow down and experimental single month vacancy estimates showed their first reduction in vacancy numbers since February 2021.
The number of people on organisations’ payrolls also continued to rise. In November an estimated 29.4 million people were on payroll Real Time Information submissions in the UK, up 257,000 on the revised figure for October 2021 and up 424,000 on the figure for February 2020.
The employment rate for August to October 2021 grew 0.2 percentage points to 75.5% and the unemployment rate fell 0.4 percentage points to 4.2%. The inactivity rate grew slightly to 21.2%, up 0.1 percentage points.
Many commentators warned that the positivity surrounding the rising employment rate and hiring spree over the past few months could soon be cut short, with the Omicron variant of Covid-19 threatening economic recovery.
Jon Boys, labour market economist at the CIPD, said: “The spectre of Omicron looms over any statement we make about these stats, reminding us that the pandemic is not over. In recent months we have seen unambiguous recovery, but that could slow down or even reverse if restrictions and behaviour change place limits on economic activity.
“This is a particular worry for consumer-facing sectors like hospitality. Today the sector is registering a record number of vacancies, but the busy and much anticipated Christmas period will likely take a hit this year.”
Recruitment and Employment Confederation chief executive Neil Carberry said: “We don’t know yet how the Omicron variant will affect the jobs market, but it is clear that supporting businesses to retain staff and maintain cashflow was a successful strategy in 2020, and we may need to dust off those plans again if we are headed for a longer period of restrictions.”
However, Reed chairman James Reed said that it is currently “the best time for fifty years to look for a new job” and suggested employers are in a better position to hire than they were earlier in the pandemic.
“There’s been plenty of talk from doomsayers that the Omicron variant will plunge us back into economic despair, but the outlook appears much more optimistic now compared with the first Covid wave we faced in March 2020,” he said.
“For the first time in our history, we had over 300,000 jobs available on Reed.co.uk throughout the entire month of November and we expect this jobs boom to continue as we approach “Massive Monday” on 10th January – the first working Monday of the year, when record numbers of jobseekers register and apply for new vacancies.
“While some may want you to think the omicron variant has tipped the battle against Covid in the virus’s favour, the reality is that, according to our jobs data, there are better opportunities and better negotiations for workers to have with employers than ever before.”
Four in 10 UK employees are likely to look for a new role in the next 12 months, according to employee insight platform New Possible.
In recent months we have seen unambiguous recovery, but that could slow down or even reverse if restrictions and behaviour change place limits on economic activity” – Jon Boys,CIPD
Employers have been pushing up salaries in order to attract candidates and retain workers in a tight labour market. In August to October 2021, annual growth in average total pay (including bonuses) was 4.9% and regular pay (excluding bonuses) was 4.3%, according to the ONS.
CIPD’s Boys said: “We can be more confident about this figure than in previous months when pandemic effects skewed the annual changes.
“CIPD research shows raising wages is employers’ top response to hard-to-fill vacancies. Not all employers have scope to raise pay and so recruitment and retention challenges are biting.
“There are plenty of tactics beside pay rises that employers can use to attract and retain people. Against this backdrop of a job seeker friendly labour market, it is important that more employers take steps to advertise jobs as flexible so they can attract older workers, people with caring responsibilities or those with long-term health conditions who are willing and able to work.”
Tony Wilson, director at the Institute for Employment Studies, highlighted that there is still a large number of people out of work.
“Despite record vacancies and the tightest labour market in our lifetimes, the number of people out of work and not looking for work is rising, perhaps pushed up by people leaving the labour market entirely at the end of furlough. We estimate that there’s now one million fewer people in the jobs market than there would have been on pre-crisis trends, with more than half of this explained by fewer older people in work. At the same time, the number of people out of work due to ill health has hit its highest since 2005, at 2.5 million.”
Wilson said the government should support those looking for work and consider reintroducing support mechanisms if lockdown restrictions are reintroduced.