'Easier visas' call as UK vacancies hit record

Business leaders call for a relaxation of post-Brexit immigration system, as demand for employees outstrips available workers. Find out what the UK businesses are asking for - and how the government has responded.

Male and female IT engineers checking servers in server room with help of tablet.

David Sapsted

12 October 2021

Job vacancies in the UK have hit a another record high despite the fact the number of employees working in the economy by the end of September had exceeded pre-pandemic levels, official data showed on Tuesday.Figures from the Office for National Statistics (ONS) showed that vacancies topped 1.1 million across the third quarter of the year - the highest since records began 20 years ago.

Calls for relaxation of the post-Brexit immigration system

The news prompted renewed calls from British business leaders for a relaxation of the post-Brexit immigration system, by making it easier for more skills to be added to the Shortage Occupation List, which would make it simpler for much-needed foreign workers to obtain visas.With the number of employees on payrolls increasing to a record 29.2 million in September, Darren Morgan, director of economic statistics at the ONS, said, "The jobs market has continued to recover from the effects of the coronavirus, with the number of employees on payroll in September now well exceeding pre-pandemic levels."Vacancies also reached a new one-month record in September, at nearly 1.2 million, with our latest estimates suggesting that all industries have at least as many jobs on offer now as before the onset of Covid-19."

UK skills and labour gaps causing "very real difficulties"

Chancellor of the Exchequer Rishi Sunak welcomed the figures, saying they represented an "encouraging" sign the government's jobs strategy was working.But James Martin, director of policy at the British Chambers of Commerce (BCC), said that while the labour market appeared to be recovering, there were "very real difficulties" because of labour and skill gaps, rising cost pressures and an increasing tax burden."With Brexit and the pandemic driving a more deep-seated decline in labour supply, businesses throughout the UK tell us they cannot access the skills they need even as their costs balloon," Mr Martin said.“Expanding the Shortage Occupation List will help businesses access the skills they need when they can’t recruit locally in the shorter term, supporting them to create a truly high-wage and high-productivity economy in the longer-term.”

Labour shortages could hamper post-covid economic recovery in the UK

Yael Selfin, chief UK economist at KPMG, agreed that labour market shortages could hamper the post-pandemic economic recovery. "The recovery is testing the capacity of the economy to adjust to a new post-pandemic environment, a task made more difficult by the reduced availability of overseas workers," she said."Acute skill shortages have pushed vacancies to record levels for a second month in a row in September, as employers struggled to find skilled staff."Matthew Percival, director for skills and inclusion at the Confederation of British Industry (CBI), said the ONS data merely reflected the hiring difficulties that companies were experiencing.“It's welcome that government has set up a new taskforce, chaired by Sir David Lewis, to advise on the impact of supply chain disruption and labour shortages on the recovery," he said."Business and government working together is the best way to create the high-wage, high-skill, high-investment, high-productivity economy we all want to see.”

Fewer candidates is leading to substantial increases in starting pay

The ONS data came on the heels of the latest jobs report from the Recruitment and Employment Confederation (REC) and KPMG, which showed hiring activity increased even further last month.However, said the report, the availability of candidates fell rapidly, leading to substantial increases in starting pay.Neil Carberry, Chief Executive of the REC, said, “Demand for workers continued to grow last month, while staff availability fell at a near record pace. Competition for staff has led to the fastest growth in starting salaries since this survey began (24 years ago), not just in logistics and food processing, but in white collar professions as well.“It is essential that government works in partnership with business to deliver sustainable growth and rising wages, rather than a crisis-driven sugar rush. That includes working on policies that encourage business investment, an international outlook and skills development."A separate report from specialist recruiter Robert Half showed increasing demand for skilled staff in banking and related financial services, particularly in the tech sector.Henry Morse, associate director at Robert Half, said, “There has been an explosion of demand for digitally skilled candidates in the financial services sector as companies fight to be stronger, better and faster."Demand has already outstripped available talent in the sector, with more than half (of companies surveyed) expecting it to be more challenging to find qualified candidates over the next 12 months."With the right talent in short supply, salaries have increased across a variety of roles – particularly in finance, compliance, risk and banking operations."