Reopening leads to record hiring and vacancies

Employment continued to rise in July, with payrolled employment levels now up 182,000 on the month, and with hiring at a record level – a welcome sign that the labour market recovery is continuing, the Resolution Foundation said today (Tuesday) in response to the latest HMRC data.

Record vacancies were met with record hiring, with vacancies still being filled faster than before the crisis – reflecting the unique reopening of previously shutdown parts of the economy.

Encouragingly, today’s figures also show that there has been no marked slowing in the rise in employees, with the employment level increasing by nearly 200,000 in each of the last 3 months.

Furthermore, the latest Adzuna data shows that vacancies are continuing to rise across all sectors, indicating a welcome recovery for sectors such as hospitality and tourism, which were hardest hit by the Covid-19 economic crisis – although employment in these sectors is not yet where it was pre-crisis.

However, while the official data also shows good news for the North East, North West and for Northern Ireland, where employment has now surpassed where it was pre-crisis, it spells less good news for London, where employment is still 3 per cent below pre-crisis levels.

Furthermore, while the record hiring is a positive development, there remains a ‘Covid employment gap’ of around 1.9 million (an indication of the fall in employment since the start of the crisis, and employees still on full or partial furlough). Reflecting this, total hours worked in June were still 4 per cent down on where they were pre-crisis.

With the possibility that redundancies will rise again when the furlough scheme finally ends at the end of the next month, it is vital that employers keep hiring and posting vacancies to absorb these workers, along with those who are already unemployed.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“Today’s new labour market data provides a clear and encouraging sign that the UK’s economic recovery is continuing, with high numbers of people returning to work, hiring at record levels – and employment levels getting closer to where they were before the crisis began.

“However, while this is cause for optimism, policymakers must not become complacent about the recovery. With the furlough scheme ending at the end of next month, the UK jobs market is not yet in the clear.

“Back-to-work schemes targeting workers of all ages must remain a priority for the Government – as should the provision of adequate income support for those who will find themselves struggling financially this Autumn and beyond.”