The UK has more job vacancies than unemployed people for the first time

For the first time since records began there are “fewer unemployed people than job vacancies,” the Office for National Statistics (ONS) has announced.

Job vacancies rose to a record of 1.3 million in February to April, as unemployment continued to drop to 3.7 per cent – the lowest level seen since 1974.

The number of payrolled employees grew by 121,000 between March and April to 29.5 million, ONS statistics showed, as more people chose salaried employment over self-employment in the face of an unpredictable cost of living crisis.  

These labour shortages, driven by post-Covid climate and Brexit, risk driving inflation even higher, warned Tony Wilson, director of the Institute for Employment Studies.

While it is promising that long-term unemployment is falling, with long-term youth unemployment now at its lowest ever, Wilson cautioned that these “green shoots” are “barely making a dent on the huge falls in labour force participation since Covid.” IES now estimates that there would be 1.15 million more people in the labour force had pre-Covid trends continued uninterrupted.

“We need more people in work, not fewer,” he continued, calling for “any new package on cost of living (to) include help for those out of work to prepare for and find new/ better work”.

Employment minister Mims Davies said the labour market was “recovering well” after Covid, as shown by payroll numbers increasing.

“We do however, fully recognise the impact global inflationary pressures are having on the cost of living for families which is why we’re taking action to help the lowest earners,” she said.

The government’s Way to Work campaign, which aims to get half a million more people into work, has helped over 280,000 into jobs in the first three months of the scheme, Davies added.

Older people are continuing to drop out of the labour market, choosing to leave the world of work without intention to return, contributing to tens of thousands of unfilled vacancies. 

Over one in four (27 per cent) people aged 50 to 64 are neither in work nor looking for work – up from 25.4 per cent two years ago.

Experts are urging employers to adopt more flexible working policies and remove age-bias from their recruitment processes to attract older workers to fill surging vacancies. 

“The UK workforce participation crisis is continuing – driven by older workers leaving the labour market,” said Emily Andrews, deputy director at the Centre for Ageing Better.

With 246,000 fewer people aged 50 to 64 participating in the workforce, “companies are missing out on the positive impact older workers can bring,” she continued.  

“Last week’s Queen’s Speech was a lost opportunity to tempt those lost workers back into the workplace, with long-promised legislation on Carer’s leave and flexible work nowhere to be seen.

“But faced with high vacancies and skills shortages, savvy employers will be doing whatever they can to make the most of the older workforce.”