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1m vacancies, 1.5m on furlough….

15/09/2021 – 1m vacancies, 1.5m on furlough….

The Office for National Statistics (ONS) has reported that August vacancies in the UK topped 1m, the highest on record. The Institute of Directors survey of their members found 44% reporting labour shortages, and wage inflation is reported to be climbing towards 8%, with employees in shortage occupations enjoying bumper pay rises as their employers desperately try to retain them – lorry drivers are now typically earning more than £50K, some more than £60K.

This is all grim reading for UK employers trying to staff their businesses in the context of the 1 – 1.5m still on publicly funded furlough leave. Adding into the mix Brexit’s impact & those isolating in response to the prevailing delta variant of the virus and we can see why the labour market is in turmoil. Combining all of these factors has inevitably constricted GDP to produce paltry growth as consumers struggle to find items to spend their money on, or where stock exists, there aren’t the staff available to operate the tills.

Furlough ends September

By the end of this month the furlough scheme will have ended and many of those currently furloughed will return to the jobs market, providing some relief. Further relief will have to wait until the UK is on top of its vaccine programme – once leading most of the world, we’ve now slipped to 19th according to reports over the weekend. We’ve lived with potentially lethal flu in the UK for decades without having to test ourselves and isolate, and it is only when covid is regarded in the same way, that the labour market will return to something more like normal.

Until then it’s a job seeker’s market and employers in shortage sectors will have to continue offering higher wages and innovative bonuses and benefits to tempt scarce applicants, and at the same time find ways to provide the same amount of service with less staff. There is no magic bullet for this particular problem, as it stems from multiple causes, but it seems there’s no quick end in sight either. One hopes the UK doesn’t return to the boom and bust cycle of decades past, driven by high inflationary pressures and often signposted by the kind of spiralling wage inflation and increases in general inflation that we’re seeing now.

Retaining staff and attracting applicants

Do we have any HR tips for employers in this situation?  Not easy ones I’m afraid but here are some of our suggestions for retaining existing and attracting new staff:

  • Remember that wage rises last for ever, bonuses can be used to cover shorter term objectives (like retention).
  • For those employees who want more responsibility, now is a more compelling time to promote early. There are risks of course, but if the alternative is losing someone with potential, promoting early and providing extra support and development makes perfect sense.
  • Consider a long term incentive plan….the promise of a future cash windfall simply for sticking around might be tempting for some – but needs to be carefully written up in an agreement.
  • Can you link pay to productivity? If an employee is twice as productive, you won’t mind paying them more…we’ve worked with schemes in the manufacturing sector that have done precisely that, though it’s more difficult to quantify in professional services environments, for example.
  • Can you implement technical solutions that reduce the need for so much labour, or eliminates certain time-consuming tasks? Many restaurants have switched to table ordering and payment via QR codes for example.
  • Consider offering joining and referral bonuses – but write these up carefully to avoid abuse or disappointment.

HR support from myHRdept

If you need help recruiting staff or developing staff incentives, myHRdept can help. Included within all of our HR outsourced support packages is a bank of support hours to help with a range of HR issues. We’ve written numerous bonus schemes as a part of our HR support packages for employers, and our in-house recruitment services have helped our clients find crucial staff.

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at to discuss your requirements, or contact us via our website and we’ll call you back.


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