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Labour market remains tight despite slight drop in number of vacancies

Quarterly job vacancies fell for the first time since 2020 between May and July, dropping by 19,800 to 1.274 million, according to the latest figures from the Office for National Statistics (ONS).

However, while vacancies fell to an all-time low between April to June 2020 in the beginning months of the COVID pandemic, they have since increased by 945,000.

Overall, the ONS said the unemployment rate held at 3.8%, while the employment rate for people aged 16 to 64 decreased slightly to 75.5%,

British Chambers of Commerce Head of People Policy, Jane Gratton, said: “The labour market remains incredibly tight adding to the growing list of concerns businesses are facing. This is a ticking timebomb for firms up and down the country.

“Today’s figures show little improvement for employers over the last quarter. Despite the small increase in employment levels, the number of job vacancies in the economy remains around the highest on record. Competition for skills and labour continues to drive up wage costs.

“Skills and labour shortages have reached crisis point for many firms. The impact is being felt on their ability to meet customer demand and forcing some to turn away new business, because they simply do not have the human resource. This is restricting growth and business confidence. It’s a serious and urgent problem.

“On top of all of this, firms are now grappling with the highest inflation in almost 40 years; the largest spike in interest rates in three decades; ongoing supply chain disruption; and eye watering energy bills. There is a limit to how much additional cost business can absorb.

“The Government can help ease the growing pressure in the labour market at no extra cost to the Exchequer.  We need an immediate review and reform of the Shortage Occupations List (SOL) to include more jobs at all skill levels.  This will give firms breathing space to train and upskill their workforce. We have over a million more job vacancies than people available to work, so the sooner we start the SOL review, the better.

“We also need to encourage economically inactive people back into the UK labour market through access to publicly funded rapid retraining opportunities.  Businesses must be part of the solution too by creating the right workplace conditions, for example by providing flexible working practises, training opportunities and a focus on workplace healthcare and support.

“We cannot see another month of the same old news, it’s time for action and we’re offering the solution. It’s time for the Government to listen.”

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