Wed 30 Nov 22
A record-breaking gap has opened between the high number of vacancies and low level of jobseekers available to fill them in the UK, according to new research.
Economists from the University of Essex and University of Edinburgh have found increasing levels of people choosing to leave work, coupled with a drop in the number of workers reskilling and moving sectors, has led to a large number of unfilled job vacancies.
It means the gap between vacancies and people available to fill them is at the highest level since records began in 2002.
The researchers found job vacancies are up 60% compared to pre-pandemic levels, while the number of people in work in that same period has dropped by 500,000.
The team, who have been examining figures from the UK Labour Force Survey (LFS), found workers are also searching for jobs less than before the pandemic, especially employed and inactive workers.
There has been a dramatic rise of around 380,000 inactive workers – unemployed people not looking for a job – since the pandemic began. Industries such as manufacturing and retail and wholesale have been hit hardest by the mismatch between vacancies and jobseekers, according to the data.
Both industries have lost more than 200,000 workers since COVID, with their ageing workforce and inability to attract newer workers behind the decline.
Professor Carlos Carrillo-Tudela, head of the Department of Economics at Essex, said: “The data shows a lot of older people who are in low paid and low skilled jobs are really fed up and choosing to become inactive.
“It’s also clear people are less willing to change jobs and learn new skills.
“That’s understandable with older workers but young people are now tending to invest in training and skills early on in their career.
“The investment of time, and sometimes money, means they too are unlikely to want to change profession because they want a return on all the effort they’ve put into learning their skills.
“This has led to a change in the structure of the economy, with young workers typically choosing sectors like healthcare and education, over others like manufacturing, retail and wholesale, and food and accommodation.”
Only three sectors have grown significantly in employment since the pandemic; Health; Public Administration; and high-skilled services in industries like IT.
Every quarter, researchers from Essex and Edinburgh analyse the latest figures to build a Labour Market Snapshot and present a summary online together with explainers on economic terms.
As well as the usual data such as total employment or the unemployment rate, the analysis focuses on inactivity, vacancies, labour market flows, and mobility and reallocation across industries and occupations.
Alex Clymo, from the department of Economics at Essex, added: “The data shows us that there’s never been a better time to be a jobseeker who is willing to work and transfer to industries like hospitality and manufacturing that are desperate to fill vacancies.
“This could potentially see jobseekers earn higher wages, with employers trying to offer incentives to get workers through the door.
“You could also argue it’s a good time to be a young person because opportunities to climb the ladder quickly are also available in some sectors, with older and more experienced workers leaving.”
The research has been supported by a grant from the Economic and Social Research Council and focuses on the impact of COVID on unemployment and earnings inequality.
To view the data, visit Covid Jobs Research: UK