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Latest ONS Labour Market Data

Today (14/09/21) the Office of National Statistics has issued their latest data on the UK’s labour market.  It’s broadly good news as the UK post-pandemic recovery appears to be continuing.

The number of job vacancies in June to August 2021 rose by 35% to 1,034,000, which is the first time vacancies have risen over 1 million since records began.  Alongside the increase in vacancies, the employment rate increased by 0.5 percentage points, to 75.2%, and the unemployment rate decreased 0.3 percentage points, to 4.6%.

Jobs market

The figures show what many recruiters already know – there are vacancies to fill but not many candidates available to fill them.  Staff shortages have been widely reported and are particularly rife in some sectors including transport and logistics, hospitality and construction.

There have been calls on the government to ease post-Brexit immigration rules so that European workers might return to the UK, however the government stands firm that businesses must nurture the domestic workforce to fill the vacancies.  We are seeing some significant financial incentives from businesses seeking to attract people to work for them, however this might not be sustainable and certainly is not something that all businesses can offer.

Numbers on payroll

The figures also confirm another consecutive increase in the number of people on payroll, up by 241,000 in August and now at pre-pandemic (February 2020) levels.  The data does not show how many of those people should actually be on payroll and it’s possible that some of the increase is due to businesses wrongly categorising their independent workers as inside IR35.

Temporary workers

The number of temporary workers  increased by 10.1% from May 2021 through July 2021, and as a percentage of total employment was 5.9%, up from 5.4% when compared to a year ago.

Of the 1.63 million temporary employees during the period ended July 2021:

  • 526,123 were temporary because they could not find a permanent job;
  • 392,532 did not want a permanent job;
  • 119,804 had a contract with a period of training;
  • 598,031 cited other reasons.

Of the 1.63 million temporary employees during the period, approximately 743,875 were men while 892,615 were women.

The increase in temporary workers once again shows the critical importance of the UK’s army of independent workers.  The current jobs market means that businesses are having difficulty finding candidates to fill their vacancies so are increasingly reliant on temporary and contract workers to get them through.  However even the availability of temporary workers is going to run out at some point in the future, so businesses may need to consider other options.

View from the Government

Long-term unemployment appears to be levelling off.  Rishi Sunak, the chancellor, said the statistics “show that our plan for jobs is working”, with the unemployment rate having fallen for seven months in a row and fewer potential redundancies notified in August than at any point since the start of last year.

However, this view needs to be taken with a pinch of salt as there are clear signs that the labour market is under strain, and many businesses are also under strain due to staff shortages.


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