UK job vacancies higher than number of unemployed for first time in 50 years

For the first time since records began, the number of unemployed people in the UK is lower than the amount of job vacancies, with the unemployment rate falling to just 3.7% between January and March of this year.

Between March and April of this year, 29.5 million workers were registered as employed (on the payroll), with only 1.3 million new job vacancies.

According to the Office for National Statistics (ONS), not only were there more job vacancies than unemployed people, but the number of people moving between jobs (driven by resignation rather than dismissal) also hit a record high.

Wages (excluding bonuses) have struggled to keep pace with the rapidly increasing cost of living in the UK, despite rising by 4.2% in the first quarter of 2022. When wages are adjusted to take into account the impact of the current cost of living, they actually fell by 1.2%, which is the most since 2013. The cost of living crisis is a problem expected to intensify over the coming months due to soaring prices of food and fuel, and is also having an impact on employment.

PwC surveyed more than 2,000 UK workers across various industries in March of this year, finding that an increase in pay was the main driving force for changing jobs, owing to 72% of those surveyed. Those aged 24 and under (generation Z) and those aged 25 to 40 years old (millennials) were most likely to be thinking about changing jobs, asking for pay rises, or aiming for promotion—particularly those in non-management roles.

"Despite employment continuing to rise, today's figures underline the challenges facing workers who are seeing inflation eat away at their living standards." - Ben Harrison, director of the Work Foundation think tank at Lancaster University

Whilst total employment is up on the first quarter of 2022, it still remains below the pre-pandemic level overall. A combination of post-Brexit worker rules, retirement of older workers during the pandemic and rises in long-term sickness has fed into an overall reduction in the size of the UK workforce:

"Since the start of the pandemic, around half a million more people have completely disengaged from the labour market”

Darren Morgan, director of economic statistics at the ONS

A reduced overall UK workforce, in combination with lower numbers of job seekers and a high number of workers moving be-tween jobs for better pay or more favourable working conditions, means that businesses are still struggling to recruit and retain their staff in the wake of the pandemic.

PwC boss Kevin Ellis believes that skilled workers are still “voting with their feet” if their expectations of pay, flexibility and oppor-tunity are not being met.