The UK’s post-lockdown boom has led to the biggest rise in hiring confidence in more than 20 years; but while this is good news for job hunters, employers are struggling to fill roles.
The latest Employment Outlook Survey compiled by recruitment firm ManpowerGroup found a 13% increase in UK employers hiring intentions in the third quarter of 2021 compared to the second quarter. Even though employers are ranking up their recruitment efforts, the aftermath of Covid and the roll-out of Brexit is leaving many businesses short of workers just as customer demand soars following the easing of lockdown restrictions.
Strongest growth in Europe
According to the survey, UK growth is the strongest in Europe, aside from Ireland, with increases in hiring intentions in business services, finance, hospitality, and retail reaching double figures. The number of employers looking to hire is up +8%, the highest in six years and the sharpest quarter-on-quarter increase since 2002. Ireland showed a 15%-point increase.
Hiring intentions within the finance and business service sectors rose by 13% to +8% after falling to -17% in mid-2020. Manufacturing has increased from -4% in the second quarter of this year to +5% in this quarter. Hospitality is also experiencing a boost as hiring intentions rise +8%, up from -7% in the second quarter of this year; which is a considerable leap from the low -13% reported in the first quarter of 2021. Restaurants and hotels are also enjoying an upswing from -18% to +26%; which is the highest growth the survey has recorded since the outbreak of the Coronavirus pandemic.
Small and medium-sized businesses also revealed an increase in hiring confidence. The hiring intentions of small businesses have risen by 15%, and it has risen by 19% for medium sized businesses.
Rise in customer demand
After the weakest year for the UK job market outlook in decades, which included hiring freezes and redundancies, employers are eager to get back to business as usual. It seems customers feel the same. Consumer spending rose by 7.6% during May compared to the same month in 2019, according to Barclaycard. In addition, spending on both essential and non-essential items increased as, lockdown was eased and people were allowed to socialise again with friends and family.
Businesses are eager to take advantage of this surge in customer demand and have ramped up their recruitment campaigns in order to cope. However, as many as three-quarters of employers are struggling to fill key roles. Staff shortage is particularly hitting the hospitality sector. Many employers say they are struggling to cope as they cannot hire trained chefs, retail workers, and waiting staff, which has been made worse by a post-Brexit skills shortage in many of these job roles. As a result, some restaurants and pubs have had to scale back their operations despite the surge in customer demand.
Skills shortage impacting pay
The nationwide skills shortage is also impacting pay; for example, Brexit has caused many drivers not to return to the logistics sector, and it’s feared the closing for applications to the EU Settlement Scheme on 30 June will mean the situation will only get worse. As a result, employers are struggling under the weight of thousands of driver vacancies, as well as the increase in drivers’ wages by 20% in a desperate bid to attract and retain workers.
The number of employers struggling to fill skilled roles has more than doubled in the past two years; it has increased from 35% in 2019 to 77% in 2021. As a result, the UK has the highest level of skills shortage in Europe and one of the highest worldwide.
Recruitment and retention will likely continue to be a huge concern for the remainder of the year. Most employers had already braced themselves for post-Brexit staff shortages, but the pandemic has multiplied the problem causing many businesses to face a staff crisis at the worst time imaginable.
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