Job vacancies are at a record high – which sectors are most desperate for staff?

The number of job vacancies in the UK hit a record high in the three months to September – a sign that the labour market is yet to fully recover following the worst of the COVID-19 pandemic.

Latest figures from the Office for National Statistics (ONS) show the number of vacancies increased by 318,000, with all industry sectors above or equal to the levels seen in the three months before the UK’s first lockdown.

The UK’s employment rate was up 0.5 percentage points to 75.3%, while the unemployment rate was down 0.4 percentage points to 4.5%.

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What is being seen at a regional level?

In the three months ending August this year, the highest employment rate estimate in the UK was in the east of England (79.1%) and the lowest was in Northern Ireland (71.1%).

The highest unemployment rate in the same period was in London (5.8%), with the lowest in the South West (3.4%). The North East saw the largest unemployment rate fall – 1.3 percentage points.

The highest rate of economic inactivity was in Northern Ireland (25.8%) while the lowest was in the East of England (17.9%) – a record low for that region.

In September this year, London and Scotland were the only places that had fewer payrolled employees than they did before the beginning of the COVID-19 pandemic. While London saw the biggest increase between August and September, it is still the furthest behind pre-pandemic levels.

Which sectors are most desperate for staff?

The ONS compares industry sectors using a measure of vacancies per 100 employee jobs – so for every 100 people employed, how many vacancies are there?

Some of the biggest growth has been seen in sectors that were hardest-hit during the early months of the pandemic.

For example, many pubs and restaurants closed for months due to government rules. When they were reopened, many were still under restrictions. Likewise, the accommodation sector was hit by travel restrictions.

Figures showed that there were 1.5 vacancies per 100 employees in the accommodation and food services sector between July and September 2020, but this rose to 5.9 between July and September this year.

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Other notable increases include:

Information and communications (from 1.7 to 4.9)

Financial and insurance (1.8 to 4.0)

Mining and quarrying (0.8 to 2.6)

Manufacturing (1.5 to 3.4)

Professional scientific and technical work (1.8 to 4.0)

Administrative and support services (1.4 to 3.3)

Human health and social work (2.8 to 4.2)

Arts, entertainment, recreation (0.8 to 4.5)

Overall, the number of vacancies per 100 employees in the services sector increased from 1.7 in the July-September period last year to 3.7 in the same period this year. For retail, the increase was from 1.4 to 3.1.

Is this just a pandemic thing?

Looking at the categories above, the vacancy rate might not be entirely due to events of the past year-or-so.

If we look at the July-September period in 2019:

• Accommodation and food saw a rate of 4.1 in 2019, 4.0 in 2018, and 4.1 in 2017

• Information and communications was at 3.3 in 2019, 3.8 in 2018, and 3.3 in 2017

• Manufacturing was 2.1 in 2019, 2.5 in 2018, and 2.1 in 2017

To find the comparative period before the Brexit vote, we have to go back to July-September 2015, when the figures weren’t all that different: accommodation and food – 4.0, information and communications – 3.2, manufacturing 2.1.

What do the experts say?

Chief executive of the Recruitment and Employment Confederation, Neil Carberry, says competition for workers is “fierce”, with recruiters placing more people into work than ever and temporary workers also in demand.

“The current shortage crises are driving a sugar rush in the labour market, but this cannot last forever,” he says.

Kitty Ussher, chief economist at the Institute of Directors, says: “We are starting to see a vacancy paradox in the jobs market: record-high job adverts but still more people unemployed than there were before the pandemic. The answer appears to be that those people seeking work do not have the skills or availability that employers need.”

British Chambers of Commerce director of policy, James Martin, said: “With Brexit and the pandemic driving a more deep-seated decline in labour supply, businesses throughout the UK tell us they cannot access the skills they need even as their costs balloon.

“These recruitment difficulties are likely to dampen the recovery by limiting firms’ abilities to fulfil orders and meet customer demand. Business investment will then suffer, curbing any chance of a prolonged recovery.”

What should the government be doing?

Ms Ussher says business want the government to “prioritise lifelong skills and retraining to help them find the teams they need to expand and grow”.

Mr Carberry wants government to “work with business to put policies in place that help deliver sustainable growth and drive up UK’s productivity and prosperity levels”.

“That means investing in skills, especially at lower levels, supporting younger people into work, and helping firms to compete internationally,” he says.

Mr Martin added: “Expanding the Shortage Occupation List will help businesses access the skills they need when they can’t recruit locally in the shorter term, supporting them to create a truly high-wage and high-productivity economy in the longer-term.”

Where can I check the vacancy situation in other sectors?

The figures are from the ONS, and they can be found here.