Sector failing to cope with 'surge in demand'

At the Economic Affairs Committee meeting at the House of Lords in London on Thursday 13 October, Shoesmith explained the UK had half a million more people “economically inactive” vs pre pandemic, creating a “perfect storm” of high consumer demand and low employment.

She said: “In the 25 years we have been doing Report on Jobs, which is a monthly tracking survey of recruitment, we have never seen candidate shortages as bad as they have been.

Perfect storm 

“[During the pandemic] we were all cooped up, we didn't have the opportunity to do things like travelling or spending on hospitality and, if you look at vacancies, they're actually highest in these industries, where people weren't allowed to spend their money during the pandemic.

“Undoubtedly, there was a huge surge in demand and as well there was this decrease in labour supply, so that means there were fewer workers to fill the jobs and there were more jobs for them to fill.

“This is just a perfect storm, high demand low supply, and that led to this record rise in vacancies.”

Shoesmith attributed this in part to the pandemic having encouraged younger people to remain in education longer and saw EU workers leave the country and not return. 

Furthermore, Shoesmith added an increasing number of people had been economically inactive post-pandemic due to long-term illness, something that was also revealed in figures released earlier this week by the Office for National Statistics (ONS).

The data from ONS showed the UK’s employment rate between June and August 2022 was 75.5% (0.3 percentage points) lower than the previous quarter (March to May 2022).

Stifling growth 

However, the data ​also showed from July to September 2022, the estimated number of vacancies had fallen by 46,000 on the quarter to 1,246,000. 

Though despite this, trade body UKHospitality​ chief executive Kate Nicholls stated unemployment levels had continued to stifle the industry's "ability to drive growth”.

She said: “Hospitality businesses have taken significant steps to attract new employees with higher wages, attractive training and development opportunities and flexible working practices, and this drop in vacancy numbers shows this work is beginning to pay off.

“Despite this decrease, there are still significant vacancies, stifling our ability to drive growth. There is still work to do and we continue to hear from businesses about how recruitment challenges are putting the brakes on recovery.”