The number of payrolled employees surged in May, official figures have shown, as the economy continues to recover from the effects of the coronavirus crisis,
Figures from the Office for National Statistics (ONS) show that the number of payrolled employees increased by 197,000 in May, the largest monthly increase since records began in 2014, with the accommodation and food services sector, people under 25 and those living in London seeing the largest increase in employment.
These were also the three groups that saw the largest fall in employment at the start of the pandemic.
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Employment in May reached 28.5 million, still more than half a million fewer people in employment than before the pandemic hit.
Vacancies for jobs also show positive signs of recovery, with opportunities close to levels seen in March last year.
Jonathan Boys, labour market economist at the CIPD, said the recovery appeared to be “in full swing” with employer confidence returning. But, he said, employers needed to focus on creating “better jobs” if they wanted to fill vacancies and ensure a solid recovery.
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“Employers should look at job design and offer better terms including wages, training opportunities and benefits such as flexible working,” he said.
Nye Cominetti, senior economist at the Resolution Foundation, said the recent easing of restrictions – including the reopening of indoor hospitality – were the driving force behind the surge in hiring. But, he said, the pace of the recovery has led to some employers struggling to recruit.
Cominetti also warned there was still a “Covid employment gap” of 2.8 million workers who were either fully or partially furloughed, or out of work completely. “With emergency support starting to be phased out over the next few weeks, and ended completely by October, this gap will need to be closed a lot more to prevent a worrying rise in unemployment later this year.”
However, Jack Kennedy, UK economist at Indeed said the winding down of the furlough scheme could “ thrust more people into job seeking and boost the supply of candidates”.
“For now, the labour market is responding well to the demands placed on it and helping the country’s economic engine rev even faster,” he said.
A separate ONS report this week found the proportion of adults working from home at least some of the time increased to 37 per cent in 2020, up from 27 per cent the year before.
The report found that 85 per cent of adults were in favour of using a hybrid working approach in the future, with improvements to work-life balance cited most often as the main positive, while a quarter (24 per cent) of businesses stated that they intended to use increased homeworking going forward.
For employers, reduced overheads and improved staff wellbeing were among the reasons to use or increase home working in the future.
However, businesses reported “reduced communication” and “negative impact on working culture” as reasons to not use home working as a permanent business model as restrictions are eased.