Surge in hiring as hospitality reopens adds to pressure on labour market


The reopening of indoor hospitality on Monday has driven a surge in UK hiring, with employers struggling to fill vacancies as the pool of furloughed workers dwindles and Brexit curbs recruitment from the EU.

Online job adverts for catering and hospitality roles are running above pre-pandemic levels for the first time since the start of the crisis, having almost trebled since the stay at home order lifted at the end of March, according to data from Adzuna, the job search engine.

The total number of vacancies had risen 18 per cent in the same period, and was “approaching the milestone of 1m”, Adzuna said, with hotel staff, gym and events managers and wedding photographers also in demand as restrictions on travel, leisure and events start to lift.

But the rush to hire goes well beyond the sectors that are reopening. A monthly survey by the Chartered Institute of Personnel and Development and Adecco, the recruitment group, shows optimism about staffing at an eight-year high, with two-thirds of employers aiming to recruit in the next three months, and just one in 10 cutting jobs.

Amazon said last week it would hire 10,000 permanent staff in the UK as it opens new centres to service the boom in online shopping. Meanwhile Office for National Statistics figures suggest the number of employees on furlough had fallen from around 5m at the end of March to less than 3m by late April — even before the next stage of reopening.

After a year in which policymakers have battled to avert mass unemployment, many recruiters said they are now struggling to fill posts — echoing the situation in the US, where many businesses are complaining of labour shortages, and McDonalds is raising wages to tempt staff.

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“Everyone was talking about a glut of candidates, that clients would be in a position to pick and choose — it’s not like that,” said Kate Allen, an Oxfordshire-based recruiter for office support roles in finance, marketing, HR and admin. Job ads were drawing far fewer responses than normal, she added, and employers were engaging in bidding wars for candidates — who might easily be offered a £10,000 raise to stay in their existing job.

The issue is most acute in hospitality — partly because of the sheer scale of hiring in a short space of time, but also because Brexit has cut off the supply of low-paid workers from the EU, and will prevent some who left the UK during the pandemic from returning.

“There are clearly a lot of staff that won’t come back because they are no longer in the country. There is likely to be a tightening of the labour market, partly because of Europeans going away and partly because of furlough,” said Clive Watson, executive chair of City Pub Group.

However, there is little evidence of labour shortages fuelling inflationary wage growth to a point that would worry Bank of England rate setters.

Indeed, a job-search site, said that advertised hourly pay for food preparation and service jobs has risen modestly in recent weeks, but remains flat for other in-demand roles, such as driving, cleaning and loading. 

“Claims that the economy is running out of workers are far-fetched when millions of people are still on furlough and youth unemployment remains high,” said Jack Kennedy, economist at Indeed.

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The CIPD/Adecco survey found that basic pay award expectations had increased from 1.5 per cent to 2 per cent, close to the pre-pandemic norm.

Gerwyn Davies, a CIPD analyst, said it was “inevitable” that the surge in hiring linked to reopening would level off later in the year, adding that it remained to be seen whether pay awards would keep pace with inflation.



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