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UK jobs market turns a corner as economy reopens

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The UK looks set to avoid the mass unemployment predicted at the outset of the pandemic if the latest Office for National Statistics (ONS) figures are anything to go by.

While employment had generally been falling and unemployment rising since the onset of the crisis, the situation was reversed in the first quarter of this year, with the ONS describing the jobs market as showing “some early signs of recovery”.

The employment rate was up on the previous quarter, rising to 75.2%, while the unemployment rate fell over the same period to 4.8%.

HMRC figures were also indicative of a recovery under way, with the number of payrolled employees rising by 97,000 in April, marking the fifth consecutive monthly rise. However, it’s worth noting that this total is still 772,000 lower than the pre-Covid-19 level.

In response to the figures, Neil Carberry, Chief Executive of the Recruitment and Employment Confederation (REC), said: “Today’s figures show the labour market remained very resilient during the latest lockdown, and even show the beginnings of the recovery in hiring that business surveys are suggesting.

“The fact that the number of payrolled employees increased during January-March alongside the headline employment rate is also a positive sign. With the announcement of lockdown easing in February and restrictions starting to lift in March, business confidence has grown, and we can see that in the growing number of job vacancies – especially in sectors like hospitality.”

Employer optimism at eight-year high

This positive sentiment was backed up by the CIPD/Adecco Labour Market Outlook for spring 2021.

This survey of 1,000 employers found that optimism about hiring among employers had risen to the highest level for eight years.

The report also noted that employers across all three major sectors – private, voluntary and public – were all planning to add more jobs than they cut, and that the buoyancy even extended to hard-hit sectors such as hospitality and retail.

Only 12% of employers were planning redundancies in the next three months, taking this measure below the pre-pandemic level of 16% for the first time since the crisis began.

There was also good news for employees on pay, with basic pay expectations set to increase from 1% to 2% in the next 12 months.

However, Gerwyn Davies, Senior Labour Market Adviser at the CIPD, said employers needed to consider more than just pay when hiring.

“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,” he said. “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.”

Recruitment difficulties ahead?

This idea that employers will need to work hard to attract workers was something Pertemps chairperson Carmen Watson also picked up on as the company released the CBI/Pertemps Labour Market Update.

“There is still a reluctance from employees to seek new roles as they remain concerned over job security. Recruitment firms will play a key role in engaging and securing key talent for organisations,” she said.

Tania Bowers, Legal Counsel and Head of Public Policy at the Association of Professional Staffing Companies (APSCo), added that the government also had a role to play in helping the jobs market recover: “In order to continue on this positive trajectory, working practices and employment law need to be fit for the modern world. How businesses are run and how recruitment is managed is different in a remote working environment and it’s critical that the relevant authorities are providing the necessary support that organisations currently need.

“The recent delay to a return to in-person Right to Work checks is one move that APSCo has welcomed – though we are urging the Home Office to prioritise the adoption of technology to switch to digital checks.”

Photo courtesy of Canva.com

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