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Job vacancies rise as businesses start hiring again

18 May 2021

The latest government employment statistics show that the number of job vacancies has increased by 8% compared to the last quarter.

The latest employment data from the Office for National Statistics (ONS) shows that the UK jobless rate was at 4.8% from January to March, down from 5.1% in the previous quarter. And job vacancies in February to April 2021 were an estimated 657,000, representing a growth of 8% (48,400) compared with the previous quarter.

However, the findings also reveal that the UK's smallest companies, employing one to nine employees, had 8.9% fewer vacancies in February to April 2021 compared with the previous quarter.

Commenting on the figures, Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: "The rise in the number of job vacancies points to an encouraging upturn in demand for labour amid the gradual reopening of the economy and the strong vaccine rollout.

"UK unemployment remains on track to peak at a much lower level than in recent recessions. However, the squeeze on business cashflow from any marked delay to the planned full reopening of the economy may trigger renewed job losses, particularly when furlough becomes less generous over the summer."

Tej Parikh, chief economist at the Institute of Directors (IoD), said: "The UK jobs market is standing firm. The unemployment rate continues to be held down by the Job Retention Scheme, which has helped many businesses weather the pandemic. As government support begins to unwind later this year job losses are still likely to tick-up, but firms are now also increasingly looking to recruit."

Parikh warned that filling vacancies could become a problem for some businesses. "As businesses attempt to re-scale during the recovery we are likely to see the number of vacancies mounting further," he said. "With an anticipated surge in consumer demand over the coming months, some firms may even be unable to find and onboard staff as quickly as they need to."

Echoing these fears, Gerwyn Davies, senior labour market adviser for the Chartered Institute of Personnel and Development (CIPD), said: "The data suggests that a new threat is emerging in the shape of recruitment difficulties, due in part to the fall in the supply of EU workers."

The latest CIPD/Adecco Labour Market Outlook report, published this week, has found that UK employers are more optimistic about jobs than they have been for eight years. Strong employer optimism is evident in all major sectors, including the private sector, voluntary sector and the public sector. The poll of more than 1,000 UK employers also suggests that basic pay expectations are set to increase from 1% to 2% in the next 12 months.

"More jobs and improved pay prospects should give us all reason to cheer, but a solid jobs recovery must be focused on better jobs, not just more jobs," said Gerwyn Davies. "To offset the emerging threat of recruitment difficulties, employers should be reviewing not just their recruitment practices, but also the quality of work they offer - such as employment conditions, the possibility of promotion, training opportunities and the right balance of flexibility and security. There's more to good work than raising wages."

Written by Rachel Miller.

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