During the pandemic the unemployment rate peaked at 5.3% as many organisations were forced to reduce their wage bill due to mounting financial pressures (ONS, 2021). Whilst damning forecasts predicted that this trend would continue throughout 2021, and into 2022, new research has shown that job vacancies have hit a record high as the UK's labour market continues to 'rebound robustly'.
In a report published by The Office For National Statistics (ONS), three key figures jumped out to readers regarding vacancies, the unemployment rate, and growth in pay, all of which showed much promise for the remainder of this financial year.
What would have first grabbed reader's attention is that the number of vacancies hit 953,000 in the three months leading to July. ONS deputy statistician Jonathan Athow stated that further to this, early survey figures show that the number of job vacancies passed one million for the first time ever in July, as the 'world of work continues to rebound robustly' from the pandemic. The BBC's Economic Editor, Faisal Islam, stated that 'These figures show a job market in recovery as the economy reopens and the furlough scheme starts to be phased out, which has resulted in employment being up on all measures, and unemployment down'. Much of this can be attributed to art, leisure and food service firms, who were among those making a big contribution to the surge in job openings, having recorded a record number of unfilled roles after the economy accelerated with the relaxation of Covid-related restrictions.
As these roles begin to be filled the unemployment rate has gradually diminished, with a decline from the the high of 5.3% down to 4.7% in the three months up to June. This is contrary to forecasts from analysts, who warned that the unemployment figures would rise as the furlough scheme continued to be phased out. However, Ruth Gregory, senior UK economist at Capital Economics, said the jobs data should calm fears that the ending of government support measures could send unemployment higher. She stated that 'the figures add weight to our view that there won't be a big shake-out in employment once the furlough scheme expires at the end of September. We've been encouraged that PAYE employment in July rose by 182,000 month-on-month, whilst the claimant count fell by 7,800 month-on-month'. These figures show a marked improvement, particular within payroll jobs recorded on the HMRC system, which has risen by 576,000 over the past year, taking it back to its pre-pandemic level.
Whilst this growth varies considerably between regions, with holiday areas such as Cornwall and west Wales showing annual rates of growth of around 5%, far above the rates in major cities, one thing that is consistent across the UK is the annual growth in average pay by 7.4%. However, the ONS urged caution in reading too much into the rise in wages, with Mr Athow stating 'this time last year we had millions of people on furlough many getting 80% of their wages, other people having their hours cut, and that pushed wages down. So when we look at wages this year, when people have come back from furlough, it's really been boosted by the fact that last year wages were quite low. Some of this group was just wages returning to the level before the pandemic.'
As these figures give hope for the future of employment across the UK, at MiGrowth we have also witnessed a surge in the proportion of roles we have available. In the passing months we have begun to recruit for a wealth of differing positions both across the UK, and Europe, as our partners now look to invest in human capital, and expand their workforce, much as we have done ourselves. Since last year we have tripled in size, with aspirations to recruit further before the end of the year. This is thanks to a significant increase in revenue generated, which like most firms was diminished during the pandemic, after organisations chose to consolidate, rather than expand. However with the rollout of our MiAssessment software, which has already received glowing reports from our patrons, we too feel confident in the future, and can't wait to see what it brings.