Over one third of businesses say they are struggling to fill vacant jobs, according to the Office for National Statistics.
Right now there are 1.3m job vacancies in the UK – the highest number since comparable figures began being recorded in 2001. That is a 62 per cent increase in job vacancies since the pandemic.
There are now the same number of job vacancies in the UK as there are unemployed people, only the second time in history that this has ever happened.
As a result, the UK is set for the slowest growth out of the G7 world’s richest nations, according to the IMF, expected to be just 0.5 per cent in 2023 compared with the 2.3 per cent previously forecast only in April.
Which sectors are struggling to fill jobs?
- Accommodation & food +107%
- Financial & insurance +90%
- Information & communication +84%
- Professional, scientific & technical +79%
- Public administration & defence +77%
Why are businesses having trouble filling jobs?
Hospitality, the worst-hit sector when it comes to job vacancies, relies on young people to be bar staff and waiters. The Institute for Employment Studies says there are fewer young people in the labour force due to a shrinking population and also a rise in the number of students entering full-time education post pandemic.
Some older workers have simply withdrawn from the labour market since the pandemic and not coming back.
It may also be that NHS waiting lists mean long-term health conditions are not being treated, so older workers are unable to get back into work.
Plus Brexit has put regulatory barriers between businesses such as hospitality and a big pool of EU labour.
Over 8 million people are called “economically unviable” out of a population of 67 million.
What can business owners do?
According to a survey by the Chartered Institute of Personnel and Development, 44 per cent of employers are having to increase the pay they offer.
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However, some observers are dry-eyed at the thought of small business owner-managers having to pay staff more. Many of these vacancies are in hospitality and retail, as well as seasonal farm work, all of which have been dubbed “McJobs” and are not seen as a fulfilling career. Small business owners have been getting away with it for years, they say, paying the minimum they can afford and relying on cheap foreign labour.
Laurence Turner, head of policy and research for union GMB, told the BBC’s Newsnight: “There’s been a long period of stagnant wage growth … employers cannot afford not to put up wages … this is just a nettle that the government and employers are going to have to grasp.”
Thirty-nine per cent of employers are retraining staff they already have to take on new roles they need to fill.
And 38 per cent of businesses are making jobs on offer more flexible.
What’s not clear is how long this job vacancies crisis will last. If some of the gloomy economic forecasts become true it may be that many of these vacancies simply disappears as businesses go under.
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