As the number of UK job vacancies hit a record high, the British Chamber of Commerce (BCC) warned the shortage of skilled staff was becoming increasingly acute, threatening business recovery.
The Office of National Statistics (ONS) released its latest Labour Market statistics which showed the labour market continuing to recover.
The number of payroll employees showed another monthly increase, up 207,000 to a record 29.2 million in September 2021, returning to pre-coronavirus (COVID-19) pandemic (February 2020) levels.
The ONS added following a period of employment growth and low unemployment, since the start of the pandemic the employment rate generally decreased, and the unemployment rate increased. However, since the end of 2020, both have shown signs of recovery.
“Our latest Labour Force estimates for June to August 2021 show the employment rate increased by 0.5 percentage points on the quarter, to 75.3%. and the unemployment rate decreased by 0.4 percentage points, to 4.5%,” it said. “The economic inactivity rate is down 0.2 percentage points on the previous quarter, to 21.1%.
“The number of job vacancies in July to September 2021 was a record high of 1,102,000, an increase of 318,000 from its pre-pandemic (January to March 2020) level; this was the second consecutive month that the three-month average has risen over one million.
“All industry sectors were above or equal to their January to March 2020 pre-pandemic levels in July to September 2021, with Accommodation and food service activities increasing the most, by nearly 50,000 (59%). The experimental single-month vacancy estimates recorded almost 1.2 million in September 2021, which is a record high.”
Commenting on the statistics BCC director of policy, James Martin, said the figures were positive but hid a growing crisis for businesses.
“With the number of employees working in the UK economy at the end of September climbing back to pre-pandemic levels, the overall UK labour market is showing some recovery,” he explained. “Businesses who have shown innovation and creativity to survive and rebuild from the pandemic should take much of the credit.
“But there remain very real difficulties under the overall numbers, with labour and skill gaps, rising cost pressures and an increasingly onerous tax burden showing that the Government needs to act now to improve business conditions.”
On the skills shortage Martin added: “Today’s figures show a second month with a record number of vacancies, now at more than a third above their pre-pandemic levels. With Brexit and the pandemic driving a more deep-seated decline in labour supply, businesses throughout the UK tell us they cannot access the skills they need even as their costs balloon.
“These recruitment difficulties are likely to dampen the recovery by limiting firms’ abilities to fulfil orders and meet customer demand. Business investment will then suffer, curbing any chance of a prolonged recovery.
“Expanding the Shortage Occupation List will help businesses access the skills they need when they can’t recruit locally in the shorter term, supporting them to create a truly high-wage and high-productivity economy in the longer-term.”
Martin warned the figures did not cover the impact of the end of the government’s jobs protection scheme.
“Furlough ended in September, and the impact of that decision may not be fully picked up in the latest data,” he added. “Skills mismatches are very likely to limit how many of those seeking jobs after furlough can move into available roles.”