Recent ONS statistics have signalled a clear recovery in the labour market with the employment rate and the number of UK employees on the payroll increasing. 

The jobs market is showing strong signs of recovery with many areas recovering to pre-pandemic levels.

According to the data, the number of payrolled employees has increased for the sixth consecutive month, up by 197,000 in May 2021 to 28.5 million.

Although there has been a clear rise, these figures are still half a million below levels seen before the pandemic – indicating more time may still be needed to see a full recovery.

Since February 2020, the largest falls in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and people living in London.

More recently, these groups have also seen the largest monthly increases in payrolled employees although these also remain significantly lower compared to pre-pandemic levels.

This quarter also showed strong recovery in terms of vacancies.

The number of job vacancies in March to May 2021 was 758,000, only 27,000 below the level before the coronavirus (COVID-19) pandemic in January to March 2020. By May, the vacancies data suggested that these had actually surpassed pre-pandemic figures.

Redundancies also decreased on the quarter, falling by 7.1 per thousand, and have returned to levels seen in early 2020.

The gradual re-opening of the economy and lifting of restrictions was reflected in the hours worked which saw an increase on the quarter, reaching 975.2 million actual weekly hours worked.

Neil Carberry, Chief Executive of the Recruitment & Employment Confederation, reflected on the improvements in the labour market but stressed that staff shortages could be holding certain sectors back:

The number of job vacancies surged by 24 per cent from the previous quarter as employers rushed to hire ahead of re-opening.

But with labour shortages across the economy, any delays in hiring could have serious consequences for the recovery. Now that there is a delay to the final stage of unlocking, employers need digital Right to Work checks to remain in place to help them place staff quickly and in line with public health guidance.

Government must also extend the targeted support measures that have been in place alongside the restrictions.

This sentiment was shared by Paul Farrer, founder of recruitment agency Aspire, who expressed this will intensify the war for talent:

The rapid – and in some cases – record increase in demand for workers creates its own challenges for hiring businesses. Demand for talent in the digital, tech, media and marketing communications sector is massively outstripping supply, which is a result of many businesses growing in the pandemic and others now staffing back up.

But the talent is available and firms should focus on hiring from a diverse pool. Many younger and older workers are available, while it’s no secret that the unemployment rate among disabled and ethnic minority workers is higher than the rest of the population.

Alongside this, employers must work harder to stand out from the crowd, consider cross-training and transferable skills to win the war for talent and hire the people they need to capitalise on the recovery.


*This data was obtained from the ONS’ ‘Labour Market Overview, UK: June 2021’.