"Whizzed up on high speed": Businesses react to the latest ONS labour market figures
The Office for National Statistics (ONS) has today announced that job vacancies in the UK hit a record high of over one million in June.
The rise coincides with the gradual reopening of businesses across the country following government restrictions aiming to curb the spread of COVID-19.
Business leaders across the UK have responded to the figures and shared their thoughts on Britain’s continued economic recovery.
Jack Kennedy, UK economist at Indeed
“Britain’s jobs recovery continues to soar, with vacancies hitting a record high of over a million in June to August for the first time since records began, buoyed by improvements in all sectors.
“With unemployment falling slightly to 4.6% many will be holding their breath in anticipation of the end of the furlough scheme at the end of this month.
“Furlough has been the backbone of the labour market throughout the pandemic, saving millions of people’s jobs. But there were still 1.6 million staff on furlough at the end of July, and the scheme’s scheduled end could result in a sudden spike in unemployment.
“Survey data from Indeed, however, shows there remains a lack of urgency among furloughed workers to look for work, with nearly half of those on furlough not open to searching for a new job and a high proportion saying they expected to go back to their normal job.
“It remains to be seen if this reticence turns into a sudden rush for jobs as some discover this is not the case and that they will need to start actively searching.
“In workers’ favour is the backdrop of high demand for staff in many sectors, with some industries increasing salaries and offering other incentives as they struggle to recruit. The fact that vacancies have risen in all sectors suggests that many workers will be able to find work more easily, and even be choosy about their next role.”
Sarah Coles, personal finance analyst at Hargreaves Lansdown
“There are over a million job vacancies washing around the UK, which sounds like exactly the right time to be coming off furlough and plunging back into the jobs market. The trouble is that they’re the wrong jobs, which spells trouble for both jobseekers and businesses.
“There were 1.6 million people on furlough at the end of July, and with the end of furlough looming, this is likely to mean hundreds of thousands of people looking for work.
“Soaring vacancies in the quarter pushed job adverts over a million for the first time on record, and in almost every sector, vacancies hit record levels. On the face of it, this looks like positive news for job hunters.
The industry with the most new vacancies was the accommodation and food services sector, where they were up 75.4% to 57,600. As anyone waiting for a delivery will know, staff shortages in transport and storage mean vacancies here were up 76.3% to 20,300 too.
“Part of the problem with both is that the usual employees don’t want to work there any more, and there aren’t enormous numbers of jobs seekers with the skills or the inclination to take the work on.
“In both cases, these shortages were caused by people leaving the sector to work elsewhere, either in another country or another sector. Problems were also exacerbated by workers being reluctant to return.
“Among hauliers, the aging workforce is a major factor, as older workers are considering retiring instead of getting back on the road. Among accommodation and food services, some of the issue is the higher economic inactivity of younger people.”
Dr Joe Marshall, chief executive of NCUB
“While today’s labour market statistics are largely cause for optimism, policymakers must not become complacent about the recovery. As was the case last month, today’s statistics show a disproportionately high number of vacancies, alongside large numbers of people still furloughed and unemployed.
“There are worrying signs that employers across a multitude of sectors are currently facing difficulty in hiring. Businesses and higher education providers are therefore voicing serious concerns that we are facing a skills mismatch.
“The furlough scheme has played a critical part in keeping people in jobs, and as it draws to an end, we should be ready to cope with a fallout. We know that young people, in particular, have been most affected by lengthy periods of unemployment.
“To help cope with this, we are urging the Government to restore a national labour market intelligence body, to replace the now-dissolved UK Commission for Employment and Skills.
“This body will be vital in order for businesses, universities and the Government alike, to better understand the labour market needs. It will allow universities to produce the highly-skilled, adaptable workforce businesses need, to help the nation’s post-pandemic recovery.”
Danni Hewson, financial analyst at AJ Bell
“The UK jobs market has been stuck into a blender and whizzed up on high speed. Considering the incredible disruption caused by the double whammy of COVID and Brexit it is rather incredible the situation is looking as healthy as it is.
“August payrolls delivered employee numbers marginally higher than pre-pandemic, unemployment is just 4.6 per cent despite furlough tapering nowhere near the 10 per cent that had initially been feared and pay has skyrocketed.
“But some of those positives are masking huge issues. Recovery has been uneven and there are big questions about how all those jigsaw pieces, pieces which no longer fit in a changed puzzle, will be slotted back into place.
“Pay can’t be the only solution. Training will be crucial and some businesses are already considering candidates without the requisite skills, prepared to offer training because the other option is simply unworkable.”
Niamh Corcoran, policy adviser at North East England Chamber of Commerce
“This month’s labour market statistics show positive signs of recovery, with the North East seeing unemployment levels falling by 15.1 per cent over the last quarter.
“However, employment levels dipped by 0.5 per cent, suggesting there is still more ground to make up to ensure the labour market’s full recovery. National and more timely data shows that the number of UK workers on a company payroll has increased by 241,000 in August, returning the country to pre-pandemic levels.
“Whilst many of the indicators in today’s dataset suggest there is room for optimism, we are not out of the woods yet. With the end of the Furlough scheme fast approaching and a million workers and businesses still relying on the scheme, it is likely there will be an uptick in unemployment in the Autumn.”
Richard Baker, Strategy and Policy Director at North East Local Enterprise Partnership (LEP)
“We’re now starting to see the shape of the labour market in the region as the economy moves out of Covid-related restrictions and support.
“The overall picture in today’s figures is of a labour market which is in recovery, but with a changed structure since early 2020.
“This recovery is tentative, with other data showing a slow-down in recent growth, the influence of other factors such as skills shortages in a number of sectors, and the need for support for workers to adapt to the changing demands of the labour market. There is some way to go to return to the pre-pandemic position.”
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