Unemployment is easing and most sectors of the economy are showing vacancies at pre-pandemic levels, the latest quarterly figures from the Office for National Statistics have shown.
The steady economic recovery from the Covid crisis’s nadir in spring 2020 has seen the number of payrolled employees increase for the sixth consecutive month, up by 197,000 in May 2021 to 28.5 million. But it is still 553,000 below levels seen before the pandemic.
Since the onset of the pandemic, the largest falls in payrolled employment have been in the accommodation and food services sector, among people aged under 25 years, and people living in London. The ONS found that these three groups have also seen the largest monthly increases but are still well below pre-pandemic levels.
Now that there is a delay to the final stage of unlocking, employers need digital right-to-work checks to remain in place to help them place staff quickly and in line with public health guidance” – Neil Carberry, REC
Between February and April there was a quarterly increase in the employment rate of 0.2 percentage points to 75.2% and a quarterly decrease in the unemployment rate of 0.3 percentage points to 4.7%. The economic inactivity rate was largely unchanged on the previous quarter at 21.0%.
Redundancies fell when compared with the previous quarter (by -7.1 per 1,000 employers) and have returned to pre-pandemic levels.
The number of job vacancies in March to May 2021 was 758,000, only 27,000 below the level before the coronavirus pandemic in January to March 2020; most industries have recovered to show vacancies above pre-pandemic levels. The strongest quarterly increase was in accommodation and food services.
Neil Carberry, chief executive of the Recruitment & Employment Confederation, said it was encouraging to see the labour market recovering its strength but had concerns over labour shortages: “This latest official data confirms the trends that surveys of businesses and recruiters have been telling us. The jobs market enjoyed a strong bounceback during the initial phases of unlocking, with the number of payrolled employees up by 197,000 from April and the unemployment rate falling to 4.7%.”
He added: “The number of job vacancies surged by 24% from the previous quarter as employers rushed to hire ahead of re-opening. But with labour shortages across the economy, any delays in hiring could have serious consequences for the recovery.
“Now that there is a delay to the final stage of unlocking, employers need digital right-to-work checks to remain in place to help them place staff quickly and in line with public health guidance. Government must also extend the targeted support measures that have been in place alongside the restrictions.”
Founder of media and tech recruitment firm Aspire, Paul Farrer, said there were challenges for digital, marketing and tech firms despite the optimism caused by the figures: “After the disappointment of the ‘Freedom Day’ delay, the strength of this data is very welcome indeed.
“The rapid – and in some cases – record increase in demand for workers creates its own challenges for hiring businesses. Demand for talent in the digital, tech, media and marketing communications sector is massively outstripping supply, which is a result of many businesses growing in the pandemic and others now staffing back up.
“But the talent is available and firms should focus on hiring from a diverse pool. Many younger and older workers are available, while it’s no secret that the unemployment rate among disabled and ethnic minority workers is higher than the rest of the population.
“Alongside this, employers must work harder to stand out from the crowd, consider cross-training and transferable skills to win the war for talent and hire the people they need to capitalise on the recovery.”