A mix of Covid-19 and Brexit has resulted in a record number of job vacancies across the UK
In fact, employment levels are still below pre-Covid levels, while the unemployment rate is at its lowest percentage of the labor force in almost 50 years.
So why do companies have trouble recruiting new employees?
What are the employment and unemployment rates in the UK?
Using the Labor Force Survey of 40,000 households, the ONS is able to gain detailed insights into the world of work across the country.
According to the latest official data, the UK employment rate for the period February to April 2022 was 75.6% (over 32.7 million employed).
That was 0.2% more than in the previous quarter, but still 0.9% (366,000 employees) fewer than in the run-up to the Covid pandemic.
Half a million people have “completely disengaged” from the UK labor market since Covid, according to ONS.
Overall, job vacancies reached a record high of 1.3 million in May 2022.
Meanwhile, the unemployment rate for those aged 16 and over was just 3.8% between February and April 2022.
This was the lowest rate since late 1974 – 48 years ago – and means there is a small labor pool from which employers can recruit new employees.
Which industries are struggling with recruitment?
Most industries are grappling with a recruitment crisis of one kind or another.
According to the ONS, the hardest-hit industry is hospitality, with around 174,000 vacancies.
The organizations estimated the situation had cost the industry £21billion in lost revenue and £5billion less in taxes paid to the Treasury.
The survey found that both front-of-house workers and chefs were the most in demand.
Tourism is another sector struggling – the evidence of this has been seen and felt at airports across the UK since Easter.
Flights have been canceled and huge queues have formed through terminals as airports and airlines struggle to fill vacancies.
Meanwhile, the NHS and social care have also been affected.
A survey of more than 20,000 nurses by the Royal College of Nursing found that only a quarter of shifts had the planned number of registered nurses on duty – down from 42% in 2020.
According to the RCN, about 25,000 nurses left the profession in 2021 because they were demoralized.
Other industries currently struggling include construction, food and freight.
Staff shortages in the latter branch led to a fuel crisis and empty shelves in autumn 2021.
Why are the vacancies so high?
There are several reasons why there are so many positions.
Most industry bodies attribute the situation to two main factors: the Covid pandemic and Brexit.
The war in Ukraine is also proving to be a factor for some British companies.
As the UK went into its various national lockdowns, several industries were essentially forced to shut down.
These included the hospitality and aviation businesses.
That meant they had to either furlough or fire their employees.
According to the ONS, layoffs hit a record high in 2020 at 14.4 per 1,000 workers, with the current rate being below two people per thousand.
Some of the people who lost their jobs switched to other industries — like digital retail, which was booming during the pandemic — some left the country (see below), while others chose to retire.
The situation meant businesses struggled to hire new staff as Covid restrictions eased and economic activity picked up again.
According to KPMG and the Recruitment and Employment Confederation (REC), this has resulted in a labor market where there is “intense” competition for workers, which has resulted in a “steep” increase in wages on offer.
A report by the two companies, based on a survey of 400 recruitment agencies, found that salaries for new permanent employees rose at the second-fastest rate in more than 24 years in February 2022, while temp salaries have also risen sharply.
Another consequence of the pandemic has been a dramatic change in the way we work.
For example, many of us have switched to home or hybrid working.
This is believed to be one of the reasons hospitality businesses struggle to compete with other industries for workers.
However, from a peak in 2015, when 177,000 EU citizens immigrated to the UK to work (71% of all migrant workers), the figure fell to 76,000 workers (45% of all migrant workers) in 2019 – the final year of the analysis.
The report offered several explanations as to why this might have happened, including a fall in the value of the pound (which reduced the value of UK wages), the political climate; and the fact that pre-referendum EU migration was unusually high.
Covid appears to have reduced the number of non-British workers living in the UK even further, with the Economic Statistics Center of Excellence estimating a population drop of 1.3 million people in 2020.
All of this suggests that there are fewer migrant workers in the UK.
Due to post-Brexit immigration regulations, recruiters have struggled to replenish this pool of workers.
The points-based immigration system, introduced when the UK officially left the EU in January 2021, was designed to allow people with certain qualifications and skills to enter the country – but makes it more difficult for workers deemed “unskilled” to enter the country .
The government has repeatedly resisted calls to relax these policies, but companies have warned that staff shortages are slowing economic growth.
For example, when airport and airline bosses called for a temporary relaxation of visa requirements in June to solve their staffing crisis, Transport Secretary Grant Shapps insisted the Brexit vote had been about hiring “cheap labor from elsewhere”.
There have been few instances where the government has been forced to relax its immigration policy.
For example, 800 temporary visas have been issued to allow foreign butchers to enter the UK to help eliminate a backlog of pigs in slaughterhouses.
But it seems that no major changes are on the horizon under the current government.
The Russia-Ukraine ratio has affected the number of workers available for some industries.
For example, in 2021 between 60% and 70% of workers who came to the UK to work temporarily on farms – the only sector to have its own dedicated immigration route – came from Ukraine, with Russians being the next largest group of workers formed.
The war meant fewer of these workers made it to Britain and created labor shortages.
These deficits have forced some fruit and vegetable growers not to pick some of their crops.
https://www.nationalworld.com/news/uk/why-employment-below-pre-covid-levels-uk-businesses-struggling-employ-staff-3747334 UK employment ‘still below pre-Covid levels’ – here’s why