Redundancies fall and jobs and vacancies rise, but we’re not out of the woods just yet

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The number of employees was up 207,000 to a record 29.2 million in September, back above pre-pandemic levels.

The redundancy rate fell to 3.6 per thousand in June-August, down 0.2 per thousand, which is similar to pre-pandemic levels.

The employment rate June-August was 75.3%, down 1.3 percentage points from pre-pandemic levels, but up 0.5 percentage points from the previous quarter. The bulk of the growth came from part-time workers.

The unemployment rate was 4.5%, up 0.5 percentage points since pre-pandemic levels, but down 0.4 percentage points from the previous quarter.

1.3 million people remained on furlough at the end of August.

The ONS has released employment and wage data for the three months June-August: UK labour market: October 2021 – Office for National Statistics (ons.gov.uk)

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “On the face of it. August’s figures seem to show that anyone who has been worried about their job during the crisis is home and dry, with redundancies down, unemployment falling, employment rising and wages up. But we’re not out of the woods just yet.

“The August figures contained plenty of good news for job seekers, and while the furlough scheme was still supporting 1.3 million jobs, elsewhere there are early indications that its withdrawal at the end of September may not have sparked a rash of redundancies either. The Insolvency Service found that just 200 companies planned to make more than 20 people redundant September-November, which would put just 13,836 jobs at risk.

“But while it seems like we’re in the clear, we’re still not out of the woods just yet. We don’t yet know how many firms plan to lay off fewer than 20 people Given that businesses with fewer than 50 staff employ almost half of UK workers, that’s a massive unknown. It‘s also still relatively early days for companies bringing people back from furlough.

“The ONS Business Insights survey from mid-September found that while only 2% of businesses plan to make people redundant in the next three months (28% of them blaming the end of the furlough scheme), another one in five have no idea whether they’ll need to let people go or not. Life has been so uncertain since the onset of the pandemic, that they can’t be sure who they’ll be employing by the time we get to Christmas.

“Meanwhile the same survey in the summer found that it’s not just the end of the furlough scheme we have to worry about. This was only the third biggest reason for letting staff go, after the need to cut costs as prices increase and the fact that changes to businesses during the pandemic means employers need different kinds of staff. This is particularly striking among shops, which are selling more online so need fewer shop floor staff and more in the warehouse.

“And it’s not just job hunters who have reasons for concern, the August figures are worrying news for businesses, who continue to struggle with a shortage of staff. Another vacancies record means they can’t find the skilled employees they need, so are struggling to deliver business as usual. This isn’t just causing gaps on the shelves, and waiting lists for everything from cars to carpenters, it’s also stopping businesses getting fully back on their feet, and getting in the way of growth.”

Other figures from the release:

  • Over the quarter there was a record increase in the employment rate and fall in the unemployment and inactivity rates of young people (16-24).
  • Vacancies hit another record high, of 1,102,000 – up 318,000 from its pre-pandemic level. The single month estimate for September was 1.2 million.
  • However, the rate of growth has slowed.
  • Vacancies were up in all sectors since the onset of the crisis, and in accommodation and food services was up 59%.
  • Growth in total pay (including bonuses) was 7.2% and regular pay (excluding them) was 6%, due in part to a fall in low paying jobs.
  • Stripping out the impact of lower figures this time last year and the fall in lower paying jobs, the estimated underlying regular wage growth is 4.1%-5.6%.