Vacancy rate highest since start of pandemic, official figures show

But experts warn of labour shortages and ‘big structural changes’ as the economy recovers from coronavirus

UK job vacancies are at their highest since the start of the pandemic, official figures have revealed, although experts are warning of labour shortages as the economy continues to recover.

Figures from the Office for National Statistics (ONS) showed that in February to April 2021 there were an estimated 657,000 vacancies, up 8 per cent on the previous quarter, with the increase in vacancies most notable in the accommodation and food services sector.

However, this was still 128,000 lower than pre-pandemic vacancies in January to March 2020.

The ONS figures also showed both unemployment had decreased and employment rates had increased in January to March. The UK unemployment rate was estimated to be 4.8 per cent, 0.3 percentage points lower than the previous quarter, but still 0.8 percentage points higher than pre-pandemic levels of December to February 2020.

Similarly, the employment rate was estimated to be 75.2 per cent, 0.2 percentage points up from the previous quarter, but still 1.4 percentage points lower than pre-pandemic levels.

The number of payrolled employees also increased for the fifth consecutive month, up 97,000 between March and April, but still 772,000 lower than in February 2020.

Get more HR and employment law news like this delivered straight to your inbox every day – sign up to People Management’s PM Daily newsletter

Neil Carberry, chief executive of the Recruitment & Employment Confederation, said the figures showed “the beginnings of the recovery”.

“With the announcement of lockdown easing in February and restrictions starting to lift in March, business confidence has grown, and we can see that in the growing number of job vacancies – especially in sectors like hospitality,” he said.

This was echoed by Mariano Mamertino, senior economist for EMEA at LinkedIn, who said peak unemployment was likely to be much lower than predicted. “It will take more time, however, to get back to pre-pandemic levels of employment and bring people who were sidelined over the past year back into the labour force,” he added.

However, Gerwyn Davies, senior labour market adviser at the CIPD, warned businesses to prepare for labour shortages. “The data suggests that a new threat is emerging in the shape of recruitment difficulties, owing in part to the fall in the supply of EU workers,” he said.

“At the same time, the number of young employees remains near a post-pandemic low, which is a worry with many of this year’s crop of school and university leavers seeking to join the labour market this summer,” said Davies, calling for more generous apprenticeships incentives targeted at younger people.

Davies also advised employers to review their recruitment, training and reward practices – as well as the quality of jobs they offer – to help offset any labour shortages and improve productivity.

Hannah Slaughter, economist at the Resolution Foundation, also warned of long-term structural changes that businesses needed to be aware of. “Early signs are emerging of which big structural changes from the pandemic will last, with hospitality bouncing back even as jobs in high street retail are not,” she said.

“Adapting to this changed world will be a key challenge for workers, and policymakers, in the years ahead.”