Labour market in rude health as job vacancies hit record high, but Omicron could challenge future recovery

The latest monthly labour market statistics show recruitment difficulties persist as vacancies rocket to record highs. Unemployment remains low, meaning employers are having to fight harder for every candidate.  

Most of today’s new data looks backwards to the end of October, before the new COVID-19 Omicron variant was discovered, and long before any change in consumer behaviour might have been registered. 

Responding to today’s ONS figures, Jonathan Boys, labour market economist for the CIPD, the professional body for HR and people development comments:  

"`The labour market looks much like it did pre-pandemic era, that is tight. This is feeding into wage growth - average regular pay growth is strong at 4.3%. We can be more confident about this figure than in previous months when pandemic effects skewed the annual changes. CIPD research shows raising wages is employers’ top response to hard-to-fill vacancies. Not all employers have scope to raise pay and so recruitment and retention challenges are biting.

"There are plenty of tactics beside pay rises that employers can use to attract and retain people. Against this backdrop of a job seeker friendly labour market, it is important that more employers take steps to advertise jobs as flexible so they can attract older workers, people with caring responsibilities or those with long-term health conditions who are willing and able to work."

Boys continues: “The spectre of omicron looms over any statement we make about these stats, reminding us that the pandemic is not over. In recent months we have seen unambiguous recovery, but that could slow down or even reverse if restrictions and behaviour change place limits on economic activity. This is a particular worry for consumer-facing sectors like hospitality. Today the sector is registering a record number of vacancies, but the busy and much anticipated Christmas period will likely take a hit this year.” 

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