The biggest risk the labour market is now facing is not enough workers rather than not enough jobs
Strong recovery disguises largest fall in size of jobs market since early 1990s
UK businesses and universities are today voicing serious concerns that we are facing a skills mismatch which is standing in the way of the nation’s recovery. This comes as new Office for National Statistics (ONS) statistics released this morning show the number of vacancies has risen above one million for the first time ever.
“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.”
IES Director Tony Wilson said:
“Today’s figures confirm that the jobs recovery is continuing to gain speed. However they also show that we’ve seen the biggest fall in the size of the labour market since the early 90s recession.
“Officially, there are still more than half a million fewer people either in work or looking for work than before the pandemic began, although furlough will be pushing the actual figure closer to a million. With vacancies setting new records, the biggest risk that we’re now facing is not enough workers rather than not enough jobs.
“At the same time, there are more than six million people outside the labour market because of ill health, caring or studies. So we need to be doing far more – government and employers – to help more of these people to get into work.”
Minister for Employment Mims Davies MP said:
“As we continue to push ahead with our recovery, it’s great to see another significant fall in unemployment and the number of people on payrolls rising by 241,000 in August – the biggest monthly increase on record – showing our Plan for Jobs is working.
“We’re helping employers recruit for the record number of vacancies out there, particularly in growing sectors, and supporting people of all ages and backgrounds to overcome barriers, land their next role, and progress in work.”
Chancellor of the Exchequer, Rishi Sunak said:
“Today’s statistics show that our Plan for Jobs is working – the unemployment rate has fallen for 7 months in a row, the number of employees on payrolls is back above pre-pandemic levels and there were fewer potential redundancies notified in August than at any point since the start of last year.
“As we continue to recover from the pandemic, our focus remains on creating opportunities and supporting people’s jobs.”
Learning and Work Institute’s chief executive, Stephen Evans, said:
“We’ve reached a milestone moment, with payroll employment back at pre-pandemic levels and more than one million vacancies. This is undoubtedly positive but scratch below the surface and you see months if not years of recovery still ahead. Employment is still more than 700,000 down on the wider survey measure and long-term unemployment is up 45%. With more than a million people still furloughed ahead of the scheme’s closure at the end of this month, we need to ramp up support for people to find work. This is particularly true of both young people, who were more likely to lose their jobs during the pandemic, and older people, who are now more likely to still be furloughed.”
Walid Koudmani, Market Analyst at financial brokerage XTB:
“Today’s UK labour market figures showed another increase in employment with figures up 241,000 to 29.1 million and finally returning to pre-pandemic levels. Unemployment figures also continued to show signs of recovery thanks to the strong increase of young people joining the workforce. On the other hand, one thing to keep an eye on remains the high number of job vacancies, which remains above 1 million and could continue to be an issue for the near future.”
Estimates of employment, unemployment, inactivity, average weekly earnings, vacancies and other labour market related statistics for the UK. This release also includes latest estimates of workforce jobs.
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