Further to our previous article, a new report from the Office for National Statistics (ONS) has highlighted that the number of job vacancies has reached new record levels, with labour shortages within the economy continuing to worsen.
Labour Shortages
New statistics from the ONS, as well as other data, has revealed that labour shorgages within the economy have continued to worsen.
The data released by the ONS shows that during the period August to October 2021, there were a record 1,172,000 job vacancies in the economy. That is 138,000 more than for the period June to August 2021, and 388,000 more than the pre-pandemic level (January to March 2020).
The ONS statistics also highlight that 15 of 18 sectors of the economy now have record job vacancies / labour shortages.
Data from other sources also illustrate that the problem with labour shortages is continuing to deteriorate. Adzuna's online job adverts, for instance, recorded a record number of vacancies in October 2021. Moreover, analyses of job adverts by the Recruitment & Employment Confederation (REC) found that there are currently 2.68 million adverts, a new record, with 221,000 new adverts placed during the first week of November 2021 alone.
The REC state that there is "no signs of slowing down in the build up to Christmas" in terms job vacancies and labour shortages.
The Economic Implications Of The Labour Shortages
In light of the new data on job vacancies and labour shortages, the chief executive of the REC, Neil Carberry, advises that: "It’s vital that, as the recovery continues, government put measures in place that will help companies invest with confidence, thereby increasing productivity and helping the economy to grow. That includes a revolution in the skills system, especially focused on helping those furthest from the labour market into work."
Nevertheless, Jonathan Boys, the labour market economist from the Chartered Institute of Personnel and Development (CIPD), cautions that: "[A] record numbers of vacancies does not mean there are a record number of jobs....Worryingly, there’s a trend of people leaving the labour market completely, transitioning from employment to a state of inactivity." Boys adds that: "Most of the increase in inactivity is by people who do not want a job."
Neil Carberry adds: "The other big trend that we're seeing is maybe people deciding in later career that now is the time to step away and retire...So we're seeing quite a few people in their late 50s and 60s say now's the time to do something different. And that generational change is quite a big theme in what we're seeing from employers at the moment."
The Need To Invest Long Term In Skills Training
One of the principal themes that has come out of the latest data on labour shortages is that employers simply cannot find enough workers with the right skill set."
Nevertheless, since Brexit, the Government has repeatedly emphasised the need for employers to train up those looking for work within the UK to fill vacancies, as opposed to recruiting workers from abroad. Indeed, commenting upon the crises involving the lack of HGV drivers and the queues at petrol stations a few months ago, the Department for Transport stated that allowiing 5000 HGV drivers from abroad to work in the UK for 3 months to ease the crises “will not be the long-term solution“. Instead, the aim and the long term solution they assert is to train up HGV drivers within the UK as part of an overall economic strategy of creating a “high-wage, high-skill economy“.
Given that this is the Government's philosophy and approach, that means that the only long terms solution to the problem with labour shortages is to invest in skills and training.
This country’s problem with skills shortages is a long standing one that has been caused by the chronic underfunding and lack of investment in skills and training. The ready availability of workers from the EU to fill the skills gaps this has caused has only served to compound the problem, as it has simply given employers the excuse they needed not to invest. Now that free movement has ended, the problems created by the lack of investment has now returned to haunt employers with avengence.
Nevertheless, the Government has recently launched a new £2.5 billion National Skills Fund in order to address this country’s long term problems with skills shortages. It has also launched a consultation into “the current offers funded through the National Skills Fund [and]…..on meeting critical skills needs.” Whilst this represents a starting point in addressing the chronic lack of investment in skills and training, far more needs to be done by employers themselves as well. They themselves need to start investing in their own futures by investing in the skills and training requirements of their own workforces, and should not be just relying upon the taxpayer to do it for them.
