This month’s labour market statistics show positive signs of recovery in the labour market, with the number of payroll employees increasing over August by 241,000 to pre-pandemic (February 2020) levels. With unemployment continuing to decrease slowly, this shows people coming out of furlough are largely going back to their jobs, but with the scheme due to end later this month, those still on furlough face an uncertain future.

What job opportunities are available?

While on the surface, today’s data suggests good news for people who are out of work or looking for a new opportunity, in reality it isn’t so straightforward. Vacancies are at an all-time high of 1.03 million, an increase of more than 35% on the previous three months. Not surprisingly, this is in part driven by hospitality, where vacancies increased by more than 76% on the quarter as we emerged from the last lockdown to 134,000.

Figure 1: Number of job vacancies, Dec-Feb 2020 – Jun-Aug 2021



Source: Work Foundation calculations using ONS Dataset A01: Vacancies by industry (seasonally adjusted). 14^th September 2021.

It is important to note that not all of these vacancies will necessarily translate into jobs, or indeed into secure and well-paid opportunities.

Due to a combination of the pandemic, Brexit and other factors, the hospitality sector is facing rising worker shortages. Many in the sector highlight long, unsociable hours, physical work and low pay as contributing factors to this, and with recent research finding that 65% of hospitality workers are unhappy in their current job, and 60% would consider changing jobs this year, it is clear that more needs to be done to improve job quality and security in the sector.

The situation is even more acute in transport and logistics, with the Road Haulage Association estimating that there is now a shortage of more than 100,000 HGV drivers in the UK, up from pre-pandemic shortage of 60,000. This has led to Morrisons supermarket warning that the driver shortage would push up prices and BP temporarily closing a number of its UK sites due to not being able to get petrol and diesel to them. With experts forecasting that it will take at least 18 months to train enough HGV drivers to tackle the current shortage, coupled with long-standing concerns about job quality and pay for drivers, vacancies in this sector are not a quick fix, and indeed not a viable option for many people who are currently seeking employment.

Moreover, this quarter has seen a 3% rise in people in temporary work (+63,000). While the proportion of people in temporary work because they couldn’t find permanent work is down slightly on the quarter in line with increasing vacancies, with nearly a third (32.1%) of all temporary workers involuntarily in this form of employment, it is clear that many recently filled vacancies are not providing security for workers, which is particularly concerning after such an uncertain period.

Addressing labour shortages and supporting people into secure work

Now is not time to be complacent, as at the end of July there were still 820,000 fully furloughed jobs.Sectors such as the arts and accommodation remain more reliant on the furlough scheme, due to ongoing travel restrictions and a succession of live event being postponed into 2022. Younger workers and those employed by smaller businesses were also more likely to still be on furlough.

Moreover, with the Prime Minister set to announce plans today for some public health restrictions to return if required as we head into winter, the Government should step back from axing furlough in its entirety, and instead target support at those sectors which remain most affected by the pandemic, with a larger employer contribution to ensure the roles supported are truly viable for the future.

Government and employers also need to develop meaningful plans to address the labour shortages that we are seeing in certain sectors, as it is already evident that the labour market needs more intervention in matching workers with the right vacancies. Furloughed workers should have access to employment support, careers advice and guidance, training and education opportunities.

Indeed, with the number of new Covid cases remaining high and the future trajectory of the pandemic uncertain, Government must look at strengthening social security, starting by retaining the £20 uplift in Universal Credit payments introduced at the start of the pandemic. Despite the Work and Pensions Secretary, Therese Coffey, saying yesterday that a £20 reduction was only 2 hours of extra work, the UC taper rate and tax deductions mean that an extra £20 in take-home pay would require more than £50 worth of hours worked.

Additionally, with the furlough scheme coming to an end, the upcoming Comprehensive Spending Review and much anticipated Employment Bill provide Government with vital opportunities to level-up through limiting insecurity.

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