More UK staff back at work but vacancies soar

Business leaders united on Tuesday to call for a relaxation of the UK's post-Brexit immigration system after official figures showed vacancies at an all-time high.

Worker in London on her mobile phone with London bus in background
Data from the Office for National Statistics (ONS) also showed that, despite the vacancies surge, payroll numbers increased last month to pre-pandemic levels in most parts of the country, though not in London, Scotland and SE England.In the June-August quarter, the ONS said the vacancy average stood at 1.03 million jobs, and reached another record of 1.1 million last month.Although much has been made of a shortage of staff in the hospitality, retail and transport sectors, the data also showed a quarterly increase in vacancy rates of nearly 40% in the professional scientific and tech sector, and in construction. The increase in manufacturing was almost 50%.Chancellor of the Exchequer Rishi Sunak commented, "Today's statistics show that our plan for jobs is working. As we continue to recover from the pandemic, our focus remains on creating opportunities and supporting people's jobs."But UK business were noticeably less sanguine. Matthew Percival, director of people and skills at the Confederation of British Industry (CBI), said he welcomed the fact the labour market was showing positive signs of recovery."However," he added, "ongoing supply and labour shortages are impeding further growth. Whilst firms accept a quick-fix overnight isn’t possible there are temporary and immediate measures the government must take to ease some of these pressures.“In the longer-term, this means increasing investment in reskilling, automation and improved pay and conditions. But these steps take time to have impact, so we need a functional Shortage Occupation List (which makes it easier for foreign workers to obtain visas) so that firms can temporarily fill the most significant vacancies.“Government needs to immediately begin a review of shortages and accept the Migration Advisory Committee’s recommendations from last year to add extra jobs to the list”.
Suren Thiru, head of economics at the British Chambers of Commerce (BCC), described the record number of vacancies as highlighting "the acute hiring crisis faced by many firms".He said Brexit and the Covid-19 pandemic had driven a deep-seated decline in labour supply, which in turn was likely to dampen economic recovery by limiting firms’ ability to fulfil orders and meet customer demand.“Although the peak in unemployment will be lower than previous downturns, with rising cost pressures and an increasingly onerous tax burden likely to stifle firms’ recruitment intentions, a notable rise in job losses as furlough ends remains probable," Mr Thiru added.“Whether furloughed workers are returning to the workplace or the wider labour market after the scheme ends, it is vital that employers and the government provide the support and training they need to be re-engaged and productive.“Expanding the Shortage Occupation List will also help businesses access the skills they need when they can’t recruit locally.”Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC), also called on the government to allow flexibility in the immigration system, to help fill vacancies."With the ONS vacancy count now over one million for the first time ever, and most individual sectors having record numbers of unfilled jobs, there is a real risk of shortages impacting the recovery through the autumn," he said.“Government must work with business to improve training opportunities for workers to transition into the most crucial sectors, and allow some flexibility in the immigration system at this time of need."And Yael Selfin, chief economist at KPMG, warned that there could be more pain to come. "While the pressure should ease as more people look to return to work and the furlough scheme ends," she said, "the UK labour market is set to remain choppy with vacancies taking time to fill due to skills shortages and reduced availability of overseas workers."

Read more news and views from David Sapsted.

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