As experts warn of persistent labor shortages, employment rises to near pre-pandemic levels
According to the latest ONS data, part-time occupations and under-25s are driving job growth.
The newest official numbers reveal that a rise in part-time workers has fueled a further decline in unemployment, while experts warn of persistent labor shortages.
According to the most recent figures from the Office for National Statistics (ONS), the UK employment rate was 75.5 percent between August and October of this year, up 0.2 percentage points from the previous quarter and just 1.1 percentage points below than pre-pandemic levels.
There were 29.4 million paid employees in November, up 257,000 from October and 424,000 more than February 2020, when the first coronavirus limitations took effect.
In the three months leading up to November, the number of job openings reached a new high of 1,219,000, up 434,500 from pre-coronavirus levels.
According to the ONS, the recovery in employment was mostly driven by a surge in part-time workers and young people aged 15 to 24, both of whom had lost jobs during the epidemic but were now regaining them.
While the ONS noted that layoffs made after the furlough scheme finished in September might not yet be reflected in the numbers, it stated that interactions with businesses indicated that redundancies made up a small fraction of individuals still on the scheme when it ended.
According to Jonathan Boys, a CIPD labor market economist, the labor market now resembled that of the pre-pandemic period, implying that it was once again tight. He said that this was feeding into wage increases, adding that the average pay rise was 4.3 percent. “According to CIPD research, the most common response by companies to difficult-to-fill openings is to raise salaries,” he said.
However, according to Boys, not all businesses have the ability to raise wages, therefore many are feeling the pinch of recruiting and retention issues. “Against this backdrop of a job-seeker-friendly labor market,” he said, “more employers must take steps to advertise jobs as flexible so that they can attract older workers, people with caring responsibilities, and people with long-term health conditions who are willing and able to work.”
The “specter” of the Omicron variant hung over the boys as well. “We have seen an unmistakable recovery in recent months,” he said, “but that could slow or even reverse if restrictions and behavior change place limits on economic activity,” he added, noting that this would be especially concerning for consumer-facing sectors such as hospitality, which is currently experiencing a record number of vacancies.
The chairman of Reed, James Reed, was more optimistic about the labor market’s reaction to the new variation. “There has been a lot of rhetoric from doomsayers that the Omicron variation will plunge us back into economic sorrow,” he added. “However, the outlook presently appears to be considerably more optimistic than it was during the first Covid wave in March 2020.”
Tania Bowers, global public policy director at the Association of Professional Staffing Companies (APSCo), commented on the findings, saying that while the increase in employment was excellent, it added to the already existent talent shortages.
“In a post-Brexit, Covid-hit world, the country is facing a huge talent shortage – and the current make-up of the immigration system does not allow for the establishment of a dynamic and flexible workforce to the extent that is required,” she said.
“For highly competent independent freelancers, there is currently no viable visa route into the UK.” Without this, the United Kingdom will continue to confront substantial staff shortages, which might stymie economic growth.”