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The pros and cons of record job vacancies

The pros and cons of record job vacancies
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You may have seen news headlines saying there are currently record job vacancies. At first glance, this looks like a great thing for those in the job market. But, could there be negatives about record job vacancies too? Read on to find out.

How many job vacancies are there?

The number of job vacancies for June to August 2021 was 1,034,000, according to the Office for National Statistics. The figure is now 249,000 above the pre-coronavirus pandemic figures for January to March 2020.

Between June and August 2021, vacancies grew by 269,300 (35.2%), and the number of vacancies increased in all industry sectors. The largest increase was seen in accommodation and food services, which rose by 57,600 (75.4%).

The total number of workforce jobs in the UK in June 2021 was an estimated 34.8 million, down by 856,000 from December 2019.

There are now 34.8 million jobs in the UK, which is the highest level since June last year. But this is down 856,000 from December 2019.

What are the positives of record job vacancies?

The record number of job vacancies is good news for some job seekers.

For those with the desired skills, it is certainly a worker’s market. In the most in-demand industries – like accommodation or transport – job seekers can almost name their price.

It is also good news for those looking to change careers. Severe job shortages in many sectors mean companies may be more willing to offer training or take a chance on people with less experience.

In addition, it’s good news for young people, many of whom have been on furlough for at least some of the pandemic. They may now find it easier to get a job.

Wages are also increasing. Average earnings in the three months to June 2021 June grew by a record 8.8% from a year earlier.

This is in part due to people coming off furlough, so some people won’t be earning more than they were before the pandemic. But, in many sectors, this is also due to the number of job vacancies pushing up demand for quality employees.

What about the negatives?

The headline figure may look good, but there are still fewer jobs available in the UK than before the pandemic broke out. Rather than a sharp increase in jobs, it appears there is a shortage of people available to do the jobs.

The problem is that job seekers’ skills aren’t matching up with those required for the vacancies.

The industry with the most new vacancies was the accommodation and food services sector, and vacancies in transport and storage were also up 76.3% to 20,300.

The skills needed for these jobs do not match up with the skills needed in industries that still have people on furlough. Those with the highest furlough rates are air travel (51%), travel and tour operators (46%), photography (35%) and creative arts and entertainment (28%).

It remains to be seen how many of these people want to – or have the skills to – move into accommodation and food services or logistics.

A record number of job vacancies is also bad for businesses. Many are struggling to operate with staff shortages.

Transport firms are having to boost wages dramatically to get drivers into the business, and there are still gaps on the shelves in supermarkets.

Health and care companies are struggling to fill shifts, meaning key services for vulnerable people might not operate.

Increasing wages is good for the staff but could also drive up prices. This will be felt by consumers and may swallow up any pay increases they receive.

Staff shortages played a large role in the recent disappointing GDP figures. If this trend stays – and potentially grows – it could be further bad news for the economy.

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