More than FIVE unemployed people for every job posting in some areas, despite record vacancies

Analysis by @Adzuna and the Institute for Employment Studies (@EmploymtStudies) finds more than FIVE unemployed people for every job posting opening in a quarter of local areas – with ex-industrial, inner city and ‘Red Wall’ areas faring worst

New analysis by Adzuna, the online job search engine, and the Institute for Employment Studies has found despite a rebound in hiring, even larger rises in ‘claimant’ unemployment mean that the number of jobseekers chasing every vacancy has nearly doubled – rising from 1.2 claimants per job in March 2020 to 2.2 claimants per job this month (June 2021).

• Overall, 2.2 jobseekers per vacancy in June 2021, up from 1.2 in March 2020, despite record hiring
• 43 local authority areas have more than eight unemployed claimants chasing every vacancy
• Report calls for more action to help unemployed into work, and to avoid a ‘timebomb’ of labour shortages, inflationary pressure and higher long-term unemployment

The research, published on Wednesday, will show that vacancies this month have almost certainly hit their highest levels since records began, with more than a million jobs now open.  Over three hundred thousand new job adverts were placed in the last week alone. This hiring spree is being driven by a combination of ‘pandemic’ jobs – like in warehousing, logistics, IT and public services; alongside strong bouncebacks in hospitality, sales, construction and manufacturing.

However while the recovery appears to be broad based across industries and regions, the analysis shows that sharp rises in local unemployment – combined with inequalities that pre-date the crisis – means that there are wide disparities between places.  In thirty local areas, the research shows that there are more than ten unemployed claimants chasing every vacancy; while in nearly a hundred places – a quarter of all areas – there are more than five claimant unemployed chasing each job.

The areas with the highest numbers of claimants per vacancy are often those areas that were most disadvantaged before the crisis began – dominated by ex-industrial areas in the north of England, Welsh Valleys and central belt of Scotland; coastal areas particularly across eastern England; inner city areas in the Midlands, North and especially London; and Northern Ireland.  So-called ‘Red Wall’ areas also continue to fare worse – with 3.4 unemployed people per vacancy, compared with 2.1 in the rest of the country.

Andrew Hunter, co-founder of job search engine Adzuna, comments:

“The last three months have been transformative for the UK jobs market. Employers are gaining in confidence as the economy reopens and more than a million jobs are on offer, with sectors like Tech, Trade & Construction and Logistics & Warehousing leading the way.

“But there is still work to do. On the one hand, vacancy levels are back at a pre-pandemic peak. But on the other hand, there are still significantly more claimants chasing every job than before the pandemic, with more than eight jobseekers per job in over 40 local authorities. This brings an underlying concern for the UK jobs market into sharp focus – many of the people currently out of work aren’t matching up to the jobs on offer, despite an acute talent shortage. This means many jobs are lying unfilled and accumulating, inflating overall hiring volumes. Some pockets of the UK including London, Northern Ireland, and other ex-industrial, coastal and inner city areas are still struggling against high local unemployment levels.

“Looking ahead, we may see another spike in jobseekers when furlough wraps up in September as some employers won’t be able to afford to keep existing staff on. Upskilling and retraining will be crucial to ensure this talent flows where it’s needed. Wider moves to help people into jobs, including better childcare support and regular, flexible hours will play a part. Finally, with strong demand for workers and less access to cheaper overseas labour, sectors like Hospitality may see a wage correction which could free up more workers to come back to the jobs market.”

Tony Wilson, Director of the Institute for Employment Studies, said:

“Since the turn of the year we’ve gone from talking about an unemployment crisis to a recruitment crisis.  But the reality is that we’re facing a bit of both – with many firms struggling to fill jobs at the same time that more than two million people are struggling to find work.  These problems are particularly acute in many of those areas that were faring worse before the crisis began and that are most in need of support as we come out of it.

“Government deserves credit for helping to avoid a jobs catastrophe last year.  But if we don’t act quickly now to help employers to fill jobs and the unemployed to take them up then we could be setting a timebomb for next year of labour shortages, higher inflation and long-term unemployment.” 

The report calls for more action from government to help employers to fill their vacancies and the unemployed to take them up – including by getting Jobcentre Plus back up and running, and by co-funding re-training support in shortage sectors.  It also calls on employers not to overlook the unemployed – and to look at how they design their jobs, advertise and recruit.

Methodology: The analysis published today (30 Jun) uses data aggregated by Adzuna, one of the largest online job search engines in the UK, from thousands of sources which are then cleaned, de-duplicated and standardised to provide a robust picture of employer demand covering at least 90 per cent of all vacancy activity. This is the same data source as is used by the Office for National Statistics in their fortnightly Economic activity and social change in the UK bulletins.

This data was then analysed by the Institute for Employment Studies, using postcode matching to allocate vacancies to local authorities on a ‘best fit’ basis and then compare this with ‘claimant count’ data.  The claimant count measures all of those that are claiming social security benefits (usually Universal Credit) and are treated as unemployed – meaning that they are required to be actively seeking and available for work.  This measure has doubled during the crisis, from 1.24 million (in February 2020) to 2.50 million (May 2021).  The claimant count is an imperfect measure of unemployment, but it provides granular data to local areas levels and the very large majority of people (90%) are out of work and all are required to be seeking and available for work.