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17 May 2022

Office clearout leaves Britain with more jobs than workers to fill them

So many people have left work or changed industry since the pandemic that for the first time demand for staff cannot be satisfied.

By Giacomo Boscaini-Gilroy

The jobs market is going through unexpected upheaval. Some people came out of lockdown needing a change, while others — especially older workers — have left work altogether. This has meant that people available to work are in short supply, and they can afford to ask more of their employers, while many businesses paused hiring during the uncertainty of the pandemic, leading to pent-up demand for workers.

There are now over 50 per cent more job vacancies than the average in the years immediately preceding the pandemic, and for the first time the Office for National Statistics (ONS) has found that there are fewer people available to work than jobs for them to fill.

Plentiful jobs and all-time low unemployment does not mean an economic boom, however. Instead, there are growing labour shortages because the economy lacks people to fill posts. For years, the labour force -- those in employment plus those unemployed -- has grown at a constant rate, but since the pandemic it has started to shrink.

The group classed as economically inactive has been growing. More people than ever are reporting that they do not want a job, and the fastest-growing portion of these people is those who are long-term sick.

A year ago a large chunk of economic inactivity was due to young people putting their lives on hold, pausing the start of their studies or their entry into employment. Since then most of them have returned to the labour force. Instead, it is the economically-inactive over-50s who are on the rise.

According to ONS analysis those in their fifties often cited stress and mental ill health, the desire to change their lifestyle, and a need to feel valued as reasons for dropping out of work. Once people reached 60 they were more likely to say they were retiring.

One of the main industries that could be affected by the loss of workers in their 50s is health and social care. A little more than a million people aged 55 or over worked in healthcare in 2019, making up almost a quarter of all workers in the sector. There are now 55 per cent more vacancies in health and social care than before the pandemic, and far more of its older workers than usual are leaving for some type of economic inactivity.

The ONS analysis found that older people in lower-paid service jobs such as caring were twice as likely as managers to leave work due to illness or disability. They were also more likely to do so because they did not feel valued in their job.

It’s not just people dropping out of the workforce who are creating vacancies, but people switching sectors. Tony Wilson, director of the Institute for Employment Studies, said that people who would work in social care were taking higher-paid jobs in other industries. “Health has really significant burnout through the pandemic," he said. "It’s been overworked because of staff shortages and is now struggling with retention and recruitment.”

Companies in some sectors, especially in hospitality and white-collar work, have reacted to labour shortages by increasing salaries but pay is less flexible in the NHS. Even when pay can be increased that is not always enough and “employers are rediscovering why good employment practice matters”, according to Wilson.

“The employment offer has been run down in the last two decades. It’s often relatively insecure, you don’t have enormous control over your hours, it’s not particularly well-managed, you don’t have much support at work,” he added. “So, if you don’t enjoy your work, then you will go somewhere that pays 20p an hour more. If you do enjoy your work, maybe you wouldn’t.”

It turns out that people are generally looking for greater flexibility in their job, and more satisfaction. Older managers and professionals leaving work are much more likely to give reasons such as “needing a lifestyle change”.

Perhaps one of the few positives we can take from the pandemic is that workers have gained the bargaining power to demand greater flexibility and job satisfaction. In March this year a quarter of people were still working from home at least some of the week, enjoying freedom many people had not even thought of as a possibility before the pandemic. Now, workers in many industries have more power to choose.

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