Furlough scheme’s end unlikely to dent record worker shortage, recruitment sector warns

The recruitment industry has warned that the end of the furlough scheme this month is unlikely to put much of a dent in the UK’s record number of job vacancies, in the short term at least.

The latest jobs recovery tracker from the Recruitment and Employment Confederation (REC) showed there were 1.66 million jobs on offer last week – an increase of 193,000 over the past seven days alone.

The growing vacancy mountain builds on official figures released two weeks ago, showing that job openings had topped one million for the first time on record during July.

The surging number reflects shortages of both low and high-skilled labour in the wake of Brexit, alongside the recovery for the economy from the depths of the COVID-19 pandemic.

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While employment has since largely recovered, the furlough scheme was supporting the wages of more than 11 million workers at its peak.

That lifeline for businesses and their staff, which is on course to cost the taxpayer almost £70bn, is set to be fully withdrawn on 30 September.

It could still leave more than one million workers at the mercy of their employer’s plans.

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The REC told Sky News that those who lost their jobs were unlikely to struggle to find work, given the high volumes of vacancies available, but warned they may have to change career to take advantage of the situation.

Its report showed the jobs most in demand last week included dispensing opticians, driving instructors, and vehicle body builders and repairers.

Sky News has reported this week how the shortage of lorry drivers, estimated at 100,000, has been forcing hauliers and other logistics specialists to award sign-on bonuses and numerous pay rises to boost retention.

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The boss of Iceland Foods told Sky News on Thursday that the government should be allowing EU drivers to fill the backlog in the short term while UK workers are trained up.

The government has, to date, refused the request and demanded domestic recruitment fill the void.

The looming demise of the Job Retention Scheme could, some economists believe, force hundreds of thousands into the labour market, though estimates vary wildly.

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REC chief executive Neil Carberry said: “It’s likely that people coming off furlough will find many opportunities when they look for a new role, with record levels of vacancies in the market.

“Huge numbers of people have found new roles over the past few months.

“The main challenge that people may face is that available roles may be in different sectors to where they worked before. “Recruiters are ideally placed to advise candidates on these transitions.

“That difference will also limit the extent to which the end of furlough will bring an immediate relief to labour shortages – though it will help to ease the situation over the longer term.”

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Job vacancies top one million

He used the report’s findings to suggest that employers worked with the government to help boost skills and secure immigration changes to assist the transition to a post-COVID economy.

Gary Smith, general secretary of the GMB union, said that should include a better deal for the UK’s workforce as a whole.

“It’s time to end the UK’s race to the bottom on pay and conditions – that’s why GMB will be organising and campaigning for significant pay increases across our membership in our drive to make work better,” he responded.

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