The number of job vacancies in the UK has fallen to its lowest level in five years, new figures show, as businesses pull back on hiring in the face of rising costs and political uncertainty.
The Office for National Statistics (ONS) reported that vacancies in the March to May period dropped to 707,000 – the lowest since February to April 2021. The decline was steepest in professional services, but retail and hospitality also saw significant falls. Liz McKeown, the ONS’s director of economic statistics, said the further drop suggested that “firms are becoming more cautious about taking on new staff”.
“UK job vacancies fell to 707,000, the lowest in five years, as firms become cautious on hiring.”
Data from HMRC showed that the number of new recruits in April was just under 540,000 – the lowest monthly figure since March 2021 and a five-year low for new hires. McKeown noted “some signs of workers moving into self employment” against the backdrop of falling vacancies.
Despite the softening, the unemployment rate fell slightly to 4.9% in the three months to April, down from 5% in the three months to March. Regular pay – excluding bonuses – grew at an annual rate of 3.4%, unchanged from the previous month and still slightly ahead of inflation. However, McKeown said regular wage growth in the private sector was rising at its lowest rate in five and a half years.
Jamie Younger, who opened The Victory pub in south London last month, said rises to the minimum wage and national insurance contributions had “made life very difficult”. He told the BBC that many pubs and restaurants were now only hiring people with several years’ experience, “rather than trying to support a younger generation and get them into their first job”. Cutting VAT, a measure called for by hospitality groups, would help ease the pressure and “give us the opportunity to train young people”, he added.
“There is a benefit of employing someone in their first job because you get to train them… and mould that person,” he said. “But with the financial restrictions it’s becoming harder and harder every day.”
Sasha Swann, a student working in the pub’s kitchen over the summer, said she had been thrown in “at the deep end… but it’s made me learn so much”. Still, she said she was “extremely fearful” about entering the world of work after university. “It’s all up in the air whether we are going to get those jobs.”
Shazia Ejaz, the Recruitment and Employment Confederation’s (REC) director of campaigns, said: “Global pressures and domestic political uncertainty are making employers hesitant to commit to hiring.”